1.a) Explain the meaning of ‘interorganizational’ in relation to marketing channel.
Management of the marketing channel involves the use of interorganizational management (managing more than one firm) rather than intraorganizational management (managing one firm). They are seen as sets of interdependent organizations which, by an exchange of outputs, are involved in the process of making a product or service available for consumption.
Interorganizational, that is a marketing channel is not just one firm doing its best in the market whether that firm is a manufacturer, wholesaler or retailer. Rather, many entities are typically involved in the business of channel marketing. Each channel member depends on the others to do their jobs.
The…show more content… Also, they make arrangements for the transportation of goods from their warehouses to the retailers' shops. Some wholesalers have their own transportation for delivery service but some need to rent from the 3rd party.
Retailer, who is in need of financial assistance, is granted by the wholesaler a fairly generous term of credit. Manufacturer too generally wishes to avoid getting his capital locked-up in finished goods, book debts etc. Wholesaler takes delivery of goods and asks for a relatively short period of credit from the manufacturers. Further, a great deal of financial burden of holding stocks is carried by the wholesaler, who stores finished goods of manufacturers in his own warehouse. Thus, manufacturer is relived of the financial burden of carrying stock.
Risk is involved whenever goods are owned. The wholesaler assumes the risk of loss likely to arise from the fall in the price of goods. The risks of damage, deterioration in quality, spoilage, pilferage, theft or loss by fire of goods kept in the warehouse are also borne by the wholesaler.
GRADING, PACKING AND PACKAGING
Wholesalers sort out products of different grades according to the quality, size, shape, moisture contents etc. They also break open the packed cases, break them into smaller lots and repack them for delivery to retailers.
DISPERSING AND SELLING
The goods assembled by the wholesalers are kept by them in stock only to be distributed