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Basics of Marketing - Kotler Philip

Intermediate sellers market

Who acts in the market of intermediate sellers?

The second type of enterprise market is the intermediary market, which we define as follows:

The market of intermediate sellers is a set of individuals and organizations that purchase goods for resale or lease them to other consumers for their own benefit.

The market of intermediate sellers includes more than 383 thousand wholesale companies with a total staff of 3775 thousand people and 1567 thousand retail companies, employing 15 898 thousand people. Now we will focus only on some characteristics of wholesale and retail companies. More details about these organizations will be told in Ch. 12 and 13.

Intermediate sellers purchase both goods for resale, as well as goods and services necessary for the smooth functioning of their own enterprises. Procurement for themselves is carried out by intermediate sellers in their role as producers. In this case, we will limit ourselves to considering only purchases of goods for resale.

Intermediate sellers deal with a huge variety of goods for resale, with the exception of a few varieties sold by producers directly to end-users. Among the goods that do not fall into the hands of intermediate sellers, products of heavy engineering, sophisticated equipment, products made for individual orders, as well as goods sold through direct mail or peddling. Apart from such exceptions, most of the goods are first sold to intermediate sellers, and those already organize their sale to end-users.

What decisions about purchases are accepted by intermediate sellers?

Like other organizations, the intermediate seller must choose which suppliers, at what prices and on what terms, to purchase the goods. In addition, he has to decide on what kind of product range he will be engaged in. This is the most important decision, because it determines the position of the intermediate seller in the market.

The intermediate seller can deal with a closed assortment, i.e. with the goods of only one manufacturer. He can sell a rich assortment, i.e. A lot of similar products of many manufacturers, or a wide range, ie. Several kinds of related goods. And finally, he can engage in a mixed assortment, ie, trade in a variety of unrelated goods. Thus, the camera store can offer only Kodak cameras (closed assortment), cameras of different brands (a rich assortment), cameras, tape recorders, radios and stereo equipment (wide assortment) or all this, plus kitchen stoves and refrigerators (mixed assortment ). From the range of goods chosen by the intermediate seller, will depend on the composition of its clientele, and the structure of the marketing mix, and the range of suppliers.

Who participates in making decisions about the purchase of goods for resale?

Who purchases on behalf of wholesale and retail organizations? In small family firms, the owner himself usually deals with the selection and purchase of goods. In large firms, procurement is a function performed by special workers who are full time on it. Department stores, supermarkets, wholesalers of medicines and other institutions make purchases in different ways. The difference in the procurement procedure can be found even in institutions of the same profile. We take supermarkets. At the headquarters of the supermarket chain, purchasing specialists develop an assortment of branded goods and evaluate the presentations of salespeople presenting new brand products to their attention. However, the manager of a particular store within the network can reject one of the goods chosen by them and refuse to sell it. Instead, the manager can decide to offer his customers some other novelties of his choice.

How do intermediate sellers make purchasing decisions?

Intermediate sellers are influenced by the same factors as shown in Fig. 41: the environment, the characteristics of the organization, interpersonal relations and individual characteristics of the individual. With regard to new products, intermediate sellers generally adhere to the same procurement process as purchasers of industrial goods. As for standard products, as the stock is depleted, they simply issue another order again. Orders are issued to the same suppliers, as long as the intermediate seller is satisfied by their terms, goods and services.