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Chapter 10 Product, Price, and Place
either the buyer or seller of a home. Realtors never take possession
of the home, though. They bring together the person selling a house
and the person who wants to buy it. The goal of an agent is to create
a favorable exchange for both buyer and seller. Agents can be used
anywhere in the distribution channel. They are especially useful in
facilitating international trade.
Channel of Distribution
The channel of distribution is the path that goods take through
the supply chain. Think about the pencil you are using right now. How
did it get from its original manufacturer to you? It may have been
manufactured, sold to a wholesaler, sold to a retailer, and then purchased
Intermediaries
Type Characteristics
Wholesaler • Breaks down bulk packages into smaller quantities for
resale
• Buys from manufacturers or producers and resells to
retailers
• Takes ownership of the products
• Provides storage facilities
• Often takes on some marketing responsibilities (i.e.,
provide marketing support in the form of shelf signs, flyers,
or advertising)
• Extends credit to retailers
• Provides sales information and training
Retailer • Has personal relationships with end users
• Takes on most of the marketing responsibilities
• Often extends consumer credit
• Sets the final selling price to end users
Agent (broker) • Does not take ownership of products
• Connects buyers and sellers
• Takes a commission, which is a percentage of the sale of
the product
• Is useful for international trade and for services
Internet • Helps niche products reach a large audience
• Is convenient for making purchases
• Uses e-commerce technology for payments
• May eliminate some other intermediaries because
producers can use it to reach end users directly and
inexpensively
© Goodheart-Willcox Publisher
Figure 10-5. Each type
of intermediary meets a
different set of needs.