Participants in the Marketing Process

 

Many firms are involved in the marketing process. This section focuses on who is involved. There are a variety of middlemen and organizations who specialize in performing various marketing functions. There are no limits as to how they are organized. There are several types of middlemen:

 

Wholesalers

Wholesalers sell to retailers, other wholesalers and industrial users, but do not sell in significant amounts to ultimate consumers. There are two main kinds of wholesalers.

 

Agent wholesalers

Agent wholesalers can act as representatives of their clients. They also can provide access to market territories that would be available only if the producer expended additional time and cost. This activity requires a great deal of specialization, and they charge fees for these services. For this fee, however, they can help locate alternative buyers, locations, prices, products, and various retail market outlets. In addition, some may specialize in a certain kind of product, in different market locations, or in a large number of different products.

 

Merchant wholesalers

Merchant wholesalers buy and sell for their own gain based on their knowledge of the market situation. For example, they buy directly from processors and sell products to retailers, other wholesalers, and industrial users.

They usually specialize in similar types of products in which they have storage and transportation investments.

 

Brokers

Brokers act only as representatives for their clients. Brokers’ incomes are from fees and commissions and are payments for their knowledge of market outlets and contacts. Brokers do not assume physical control of the products. They follow directions of each principal and have less discretionary power in price negotiation.

 

Commission people

Commission people usually control the physical handling of the product, moving it from one location to another. They arrange for the terms of sale and collect money from the buyer for the sale of the products. They deduct predetermined fees and send the balance to the processor.

 

Speculative middlemen

Speculative middlemen take title to the products. They buy products based on their knowledge of the possibility of selling at a higher price. Their goal is to make a profit from price differences in various locations.

 

Retailers

Retailers buy from many processors and wholesalers to develop a product mix that will attract consumers to their stores. They rely on consistent quality and availability of products. They buy and sell for their own gain. Managers need to decide what kind of a market territory they want to serve and how they can use any or all of the participants in the marketing process. Their selection will depend on different population concentrations, income levels, number of competitive products and number of market outlets. All these should be used to develop the type of market organization that will best serve consumers and sell the product. If these data are too difficult to personally collect, they can be purchased from various marketing consultants and middlemen.