Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

13. Retailers, Wholesalers
    and Their Strategy
    Planning

Text © The McGraw−Hill

Companies, 2002

Retailers, Wholesalers, and Their Strategy Planning 383

because the agent can do the job at low cost. Small producers often use agents every-

where because their sales volume is too small to justify their own sales force.

Agents can be especially useful for introducing new products. For this service,

they may earn 10 to 15 percent commission. (In contrast, their commission on large-

volume established products may be quite low—perhaps only 2 percent.) A 10 to

15 percent commission rate may seem small for a new product with low sales. Once

a product sells well, however, a producer may think the rate is high and begin using

its own sales reps. Agents are well aware of this possibility. That’s why most try to

work for many producers and avoid being dependent on only one line.

Manufacturers’ agents may cover a very narrow geographic area, such as a city or

state. However, they are also very important in international marketing, and an

agent may take on responsibility for a whole country. Export or import agentsare

basically manufacturers’ agents who specialize in international trade. These agent

middlemen operate in every country and help international firms adjust to unfa-

miliar market conditions in foreign markets.

Manufacturers’ reps will continue to play an important role in businesses that

need an agent to perform order-getting tasks. But manufacturers’ reps everywhere

are feeling pressure when it comes to routine business contacts. More producers are

turning to telephone selling, websites, e-mail, teleconferencing, and faxes to con-

tact customers directly. This hits these agents where it hurts.^34

Brokersbring buyers and sellers together. Brokers usually have a temporaryrela-

tionship with the buyer and seller while a particular deal is negotiated. They are

especially useful when buyers and sellers don’t come into the market very often. The

broker’s product is information about what buyers need and what supplies are avail-

able. They may also aid in buyer-seller negotiation. If the transaction is completed,

they earn a commission from whichever party hired them. Export and import

brokersoperate like other brokers, but they specialize in bringing together buyers

and sellers from different countries. Smart brokers quickly saw new opportunities to

Brokers provide

information

Innovative wholesalers are using

multilingual bar codes to reduce

costs and errors in overseas

markets.