Describing the Customer’s Costs


Intermediary customers are those commonly termed "channel" customers. Intermediary customers include wholesalers, retailers and occasionally, brokers. These Intermediary types of customers see that the product is sold and delivered to a Final customer.

Intermediary customers take four major steps with the product:
Obtain, Sell, Guarantee and
Return. Each of these steps cause an Intermediary customer to incur additional steps and costs in connection with the product. Some of these additional Sell costs include:

Sell Steps: Sell steps include the activities Intermediary customers take in selling and delivering the product to their customers. These activities include their own customer recruitment and product delivery.

  1. Create awareness of channel supplier: The customer must let Final customers know of his existence and ability to satisfy the Final customers needs.

  2. Differentiate the product: The customer must differentiate his product offerings from those of competing companies offering similar products.

  3. Differentiate the channel from other channel suppliers: The customer must differentiate his services from the services of other similar types of channel companies.

  4. Price product: The customer must establish and maintain an appropriate price for the product.

  5. Display product: The customer must present the product in some manner to the Final customer.

  6. Educate Final user: The customer must teach the Final user how to use the product appropriately.

  7. Deliver product: The customer must deliver the product to his Final customer.

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