In this tutorial, we examine retailers as resellers of a marketer’s products. In terms of sales volume and number of employees, retailing is one of the largest sectors of most economies.
We will see that retailing is quite diverse and marketers, who want to distribute through retailers, must be familiar with the differences that exist among different retail options.
The importance of resellers in general, and retailers in particular, has much to do with the control marketers have or do not have when selling to their target market. In an ideal business world, most marketers would prefer to handle all their distribution activities by way of the corporate channel arrangement we discussed in the Distribution Decisions tutorial. Such an arrangement provides the marketer with two important benefits. First, being responsible for all distribution means the marketing organization need only worry about making decisions concerning their product. When others, such as resellers, are involved in distribution attention is not given to a single supplier but is stretched across all products the reseller carries. Second, having control on all distribution means the marketer is always in direct contact with buyers of their products, which can make it easier to build strong, long-term relationships with customers.
Unfortunately, for many marketing organizations, a corporate channel arrangement is not feasible. Whether due to high cost or lack of experience needed to run a channel efficiently, the majority of marketing organizations rely on third parties to get their products into the hands of customers. And how a product is distributed, including where it is located (e.g., reputation of resellers from whom they purchase) and customer experience with the purchasing process (e.g., how long to receive, condition when received), will impact a customer’s feelings about the product which in turn affects how a customer positions the product in their mind.
Consequently, it is vital for marketers to fullly understand how retailers and other resellers operate.