Text B. Marketing Channels.

Read and translate the following text with the help of a dictionary. Find in the text words and word combinations on marketing and paraphrase them in English, that is, give them in an explanatory way. Pattern:

1. middleman - trader who passes goods from the producer to the consumer;

2. commerce - trade, exchange and distribution of goods;

3. wholesale trade - selling goods in large quantities for resale to the public;

4. domestic - which belongs to one's own country, native, local, national, home;

5. charge - ask as a price for smth.;

6. brisk steps - busy, energetic, active and quick measures;

7. scarcity - small supply compared to demand;

8. sell - to give in exchange for money

Marketing Channels

Many thousands of different products are produced to meet the demands of the millions of customers. In order that the consumers may be able to purchase these products at the time, at the place, and in the quantity they wish, many businesses perform services in getting the products from the producers to the consumers. Each producer must decide just what method he should use in getting his product to the consumers.

Distributing goods from producers to consumers

How do goods move from the producer to the consumer? Sometimes the producer markets them directly to the consumer without the use of middlemen. This is known as direct marketing. Some producers sell their products to retailers; others distribute their goods to wholesalers or to other middlemen. Distribution through middlemen is known as indirect marketing.

Trade Channels

The various routes taken by goods in getting from the producer to the consumer are known as trade channels.

Producer Directly to Consumer.The shortest trade channel is that in which the goods move directly from the producer to the consumer. The manufacturer of airplanes sells his products directly to airlines. The farmer may sell his produce directly to consumers through his roadside market, by house-to-house canvassing,

or by taking his produce to a farmers' market in a city, where he may sell it from his truck. A bakery may have trucks which make direct house-to-house deliveries of its baked goods or may operate a retail store in the front part of the building in which the baking is done.

There are three methods by which the producer may sell directly to the consumer: by mail, by having salesmen go to the customers, or by having the customers come to the producer.

Selling by Mail. Selling by mail requires a large amount of advertising and correspondence. In the past this method has been used most successfully in selling to people in rural areas where the consumer found it difficult to get to city retail stores. With the extensive building of good roads and the wide popularity of the automobile,

however, the total of mail-order sales has decreased greatly although a large number of products of almost every variety and description are still being sold by mail.

Selling Through Salesmen. Products that people can do without, but that mean convenience and comfort, are often purchased only when the consumer is urged to buy them. In such cases the producer often sends his salesmen to call directly on consumers in an attempt to intensify the want that is present but inactive. Encyclopedias, household goods (including cosmetics), magazines, books, and some items of clothing are often marketed in this manner. For example, the Fuller Brush Company has approximately 7,000 salesmen calling on housewives and making annual sales of some $100 million. Usually the products are those that do not require servicing.

Consumers Come to Producer. In some cases the producer has the consumer come to him to get the product. This plan is sometimes followed because the producer does not wish to devote the additional time to marketing or in order that the customer will feel he is getting a fresher product. In some cases it would be impractical to carry to the consumer a wide variety of products from which the consumer could make his selection. Trees and shrubbery and the produce of farmers are examples of such products.

Producer to Consumer Through One Middleman.Using only one middleman is next to the shortest trade channel. The middleman is usually spoken of as a retailer (the one who sells to the consumer). Automobiles ordinarily are distributed by this method; the local dealer, or agent, buys from the manufacturer and sells to the consumer. Milk often follows this trade channel in reaching consumers in cities; the dairy purchases the milk from the dairy farmer and then pasteurizes, bottles, and sells it to the housewife. Some farmers choose to haul certain products to town and market them directly to the consumer.

Producer to Consumer Through Two Middlemen.The use of two middlemen is frequently thought to be the most typical of the trade channels used in distributing merchandise in many developed countries.

Staples, such as groceries, drugs, and hardware, are frequently marketed through a wholesaler and a retailer. Wholesaler is a term given to the merchant who usually supplies the retailers and others who buy in large quantities, such as industrial

users and institutions. Large department and chain stores usually eliminate the wholesaler by purchasing from the manufacturers.

Manufacturers of farm machinery and large meat packers are examples of producers who often have their own branch houses that sell to the retailer. In some cases the branch house is owned entirely by the producer; in other cases it is controlled by the producer, who owns a controlling interest in the capital stock of the branch house. This method is likely to be used when other distribution facilities, in the form of suitable wholesalers and brokers, are inadequate; or a manufacturer may feel that if his goods were distributed through wholesalers and brokers, who handle a large variety of goods, his goods might not be promoted as much as they are by his own branch house. Branch houses are usually found only in metropolitan areas.

Producer to Consumer Through Three or More Middlemen.Sometimes when the producer has a small business, such as a small canning factory or a textile mill producing only a few kinds of cloth, he may turn the marketing of the goods over to brokers in order to eliminate the need for maintaining a sales and related departments. From the brokers or agents the goods pass to the wholesaler and then to the retailer. Likewise, wholesalers who handle a very large variety of articles, such as wholesale hardware dealers who carry a great number of products made by many manufacturers, find it desirable to get their goods through buying agents. who can keep in close touch with the different manufacturers and the daily price changes.

Buying agents receive their compensation from the wholesaler who employs them. Sales agents, on the other hand, are employed by the producer. In recent years there seems to be little difference between a jobber and a wholesaler. Formerly the jobber bought "job" or odd lots of merchandise and sold them wherever he could sell them advantageously.

Questions:

1. What is the difference between direct and indirect marketing?

2. What is the shortest trade channel?

3. What are three methods by which the producer may sell directly to the consumer?

4. Do you see a difference between the terms "salesman" and "middleman", "retailer" and "wholesaler"?

5. Can you explain the following business terms: "branch house", "buying agent", "sales agent", "broker"?

6. In what cases is it more preferable to use the trade channel through: a. one middleman; b. two middlemen; c. three or more middlemen?

GRAMMARRemember the Personal and the Possessive Pronouns:

Personal Pronouns	Possessive Pronouns
Persons	The Nominative Case	The Objective Case	Conjoint Form	Absolute Form

Singular
	I	me	my	mine
	You	you	your	yours
	He She it	him her it	his her its	his hers its
Plural
	we	us	our	ours
	you	you	your	yours
	they	them	their	theirs