The document discusses marketing channels and intermediaries. It defines marketing channels as the chain through which agricultural commodities move from producers to consumers. Intermediaries provide important functions like price stability, information sharing, financing, and matching supply and demand. Effective marketing channels require pooled resources among members, shared goals, and flexibility to connect producers with consumers. Common types of channels include direct selling, using intermediaries, and dual distribution. The document also outlines the key flows and members involved in moving products through channels.

3. Producer
Intermediaries
Consumer

4. Definition
 The agricultural commodities move from the farmers to consumers
over time and space through various market intermediaries.
 The chain of intermediaries through which the various farm
commodities pass between producers and consumer.
 An array of exchange relationships that create customer value in the
acquisition, consumption, and disposition of products and services.

5. Importance
 Information Provider
 Middlemen provide information about the market
to the manufacturer.
Entry of a new competitor or a new brand and
changes in customer preferences

6. Price Stability
 Another function a middleman
 Absorb an increase in the price of the products and
continue to charge the customer the same old price.
 Because of the intra-middlemen competition. The
middleman also maintains price stability by keeping
his overheads low.
Stability
Price
Price

7. Bitcoin
 Digital currency
 Transaction between peer to peer
 Takes place between producer and customer.

8. Promotion
 Promoting the products in his territory is another function that
middlemen perform.
Title for Goods
 Most middlemen take the title to the goods, services and trade in
their own name. This helps in diffusing the risks between the
manufacturer and middlemen.

9. Financing
 Middlemen finance manufacturers’ operation by providing the
necessary working capital in the form of advance payments for
goods and services.

10. Help in Production Function
 The producer can concentrate on the production function leaving
the marketing problem to middlemen who specialize in the
profession.
 Their services can best utilized for selling the product.
 The finance, can profitably be used in production where the rate of
return would be greater.

11. Matching Demand and Supply
 The chief function of intermediaries is to assemble the goods from
many surplus producers in such a manner demand and supply can
balanced.
Demand
Supply

12. Pricing
 Suggestions from the middlemen who are very close to the ultimate
users and know what they can pay for the product.
 Different for different markets depending upon the channel of
distribution.

13. Standardizing Transactions
 Consumers do not need to negotiate with the sellers on any aspect,
whether it is price, quantity, method of payment or location of the
product.
Matching Buyers and Sellers
 Normally, most sellers do not know where they can reach potential
buyers and similarly, buyers do not know where they can reach
potential sellers.

14. Functions
 Bridge the gap between production and consumption.
 A close study of the market is extremely essential. A sound marketing plan depends upon
thorough market study.
 Promoting the product and awareness regarding products and other offers to the
consumers.
 Creating contacts.
 Understanding the customer's needs and adjusting the offer accordingly.
 Negotiate price and other offers related to the product as per the customer demand.
 Storage and distribution of goods

15. Elements
 Marketing channels to succeed in a competitive
marketplace, independent marketing organisations
must pool individual resources to achieve collective
goals through a connected system.
Pooled Resources
A marketing channel operates as a team, sharing
resources and risks to move products and resources from
their point of origin to their point of final consumption.
Product
Resource
Resource
Resource

16. Collective Goals
 A sense of shared purpose helps unite organisations within marketing channels.
 particularly when the organisations sense a chance to win a critical competition
for market share.
 The purpose shared by members of an organisation is reflected in the
organisation’s mission statement.

17. Mission statement
 an organisation’s goals,
 the procedures to be employed in pursuit of those goals, and
 how the organisation intends to satisfy the needs of its internal and external
customers.

18. Connected System
 Organizations cannot exist without markets. All business competition emerges within
marketing channels, and the success or failure is decided over there.
 Channel members regulate the flows of goods and services in the marketplace. The degree
to which product flows has never been more significant.

19. Flexibility
 Marketing channels must be flexible systems in order to be successful.
 The organisations and persons involved in channel flows must be ‘sufficiently connected
to permit the system to operate as a whole, but the bond they share must be loose enough
to allow for components to be replaced or added’.

20. Types of marketing channels
Direct Selling
 Selling of products directly to consumers away from a fixed retail location.
 Direct selling is different from direct marketing in that it is about individual
sales agents reaching and dealing directly with clients.
 Direct marketing is about business organizations seeking a relationship with
their customers without going through an agent.

21. Selling Through Intermediaries

22. Dual Distribution
More than one channel simultaneously to reach the end user.

23. Reverse Channels
The backward flow or process by which used goods, that will be used in the recycling
and repurposing of those goods as raw materials, come from the consumer.

24. Levels of marketing channel
Each layer of distribution intermediaries that
performs some work in bringing the product to its
final consumer is a channel level.

25. Zero Level Channel
 A zero level channel, commonly known as direct marketing channel has no intermediary
levels. In this channel framework manufacturer sells merchandise directly to customers.
One Level Channel
 one selling intermediary.
 In consumer markets, this is usually a retailer. The consumer electrical goods market in
the United Kingdom is typical of this arrangement whereby producers such as Sony,
Panasonic, Canon etc.
Two Level Channel:
 Two intermediary levels – a wholesaler and a retailer.
Three Level Channel:
 A third level channel, as the name implies, encompasses three intermediary levels – a
wholesaler, a retailer and a jobber.

26. Flows in Marketing Channels

27. Product flow
 Physical movement of the product from point of production to final consumers.
Negotiation flow
 The interplay of the buying and selling functions associated with the transfer of
title (right of ownership) to products.
Ownership flow
 The movement of the title to the product as it is passed along from the
manufacturer to final consumers.
Information flow
 the flow of information from the manufacturer to consumers are two-directional.
Promotion flow
 The promotion flow refers to the flow of persuasive communication in the form
of advertising, personal selling, sales promotion, and publicity.

28. Marketing channel members
Resellers
 Generally purchase or take ownership of products from the marketing company with the
intention of selling to others.
 Retailers – Organizations that sell products directly to final consumers.
 Wholesalers –purchase products from suppliers, and in turn sell these to other
resellers, such as retailers or other wholesalers.
 Industrial Distributors –selling products obtained from industrial suppliers.

29. Specialty Service Firms
 Provide additional services to help with the exchange of products but generally
do not purchase the product (i.e., do not take ownership of the product):
 Agents and Brokers – bring suppliers and buyers together in exchange for a fee.
 Distribution Service Firms – transportation, storage, and order processing.
 Others – insurance companies and firms offering transportation routing assistance.

30. Benefits offered by channel members
 Cost Savings in Specialization – Members of the distribution channel are specialists in
what they do and can often perform tasks better and at lower cost than companies who do
not have distribution experience.
 Reduce Exchange Time - faster product delivery being experienced in what they
do.
 Provide Information –provide information that can help improve the product,
how products are selling.

31. Issues in marketing channels

32. Product Issues
 The nature of the product requires special handling such as flowers.
Promotion Issues
 Promotional activities needed to sell the product to customers. For products
needing extensive salesperson-to-customer contact (e.g., automobile purchases)

33. Pricing Issues
 The desired price at which a marketer seeks to sell their product can impact how they
choose to distribute.
 If too many channel members are involved the eventual selling price may be too high to
meet sales targets in which case the marketer may explore other distribution options.
Target Market Issues
 A distribution system is only effective if customers can obtain the product.
Setting up a approach that reaches customers in the most effective way possible.

34. Marketing channel for banana
Processor
Hawker

35.  There are 4 things that you can’t recover
 The stone after shot
 The word after pronounced
 The occasion after lost
 The time after gone