The Marketing Intermediary as an Information Seller: A New Approach

The rationale for the emergence of intermediary institutions in marketing channels has been the focus of research for many marketing scholars. A review of the work done in this area reveals two broad approaches to this issue. One group of scholars has focused on the ability of such intermediary institutions to reduce costs of the physical flows of goods and services from producers to users. Alderson and Martin (1965) in their ;sortment and assortment model suggested that marketing intermediaries can streamline physical flows and rearrange them in more economic setups. Stigler (1951) introduced the notion of vertical specialization, whereby he proposed that marketing functions are shifted to specialized agencies to achieve greater efficiencies. Mallen's (1973) notion of vertical spin-off followed basically the same rationale. Another approach adopted by several researchers has been to focus on the role of a marketing intermediary in facilitating the transmission of information within the marketing channel between producers and users. Therefore, these researchers developed analytic frameworks purporting to explain the emergence of marketing intermediaries due to their ability to collect, disseminate, and use information efficiently (Balderston 1958; Bucklin 1965; Baligh and Richartz 1967).