Why Are Marketing Intermediaries Used?

Why producers do provides some of the selling job to intermediaries? Finally, doing so means giving up little control over how and to whom the products are sold. The use of mediators results from their higher efficiency in making goods available to target markets. Throughout their experience, contacts, specialization, and scale of operation, intermediaries typically offer the firm more than it may achieve on its own.

Given figure shows how using intermediaries may provide economies. Figure A indicates three producers, each using direct marketing to attain three customers. This system needs nine different contacts. Figure B indicate the three manufacturers working through one distributor, who contacts to the three customers. This system needs just six contacts. In this way, intermediaries reduce the amount of work that has to be done by producers and consumers both.

The role of marketing intermediaries is to transform the assortments of products made by producers into the assortments desired by consumers from the economic system's point of view. Producers make narrow assortments of products in high quantities, but consumer's desire broad assortments of products in little quantities. In the distribution channels, intermediaries buy high quantities from various producers and break them down into the smaller quantities and broader assortments needed by consumers. therefore,  intermediaries  play  an  significant  role  in  matching  demand and supply.

The concept of distribution channels is not restricted to the distribution of tangible products. Manufacture of ideas and services also face the problem of making their output available to target markets. In the private sector, hotels, banks, retail stores and other service providers take huge care to make their services conveniently available to target customers. In the public sector, agencies and service organizations develop "health care delivery systems" and "educational distribution systems" for reaching sometimes widely dispersed populations. Hospitals have to be located to serve many patient populations, and schools have to be located close to the children who require to be taught. Communities have to locate their fire stations to provide fast response to polling and fires stations must be placed where people may vote conveniently.