20: Suppliers & Dealers Relations
B A (JMC) (3-YDC),
SEMESTER SYSTEM
SEMESTER –IV
SEC III: PUBLIC
RELATIONS AND EVENT MANAGEMENT
Unit -1: PUBLIC RELATIONS
LESSON - 20: Suppliers & Dealers Relations
Objectives:
1. Learn about the role of suppliers and dealers in Business.
2. Examine various components in a market mix and supply
chain.
3. Understand market, marketing and marketing
communication.
4. Know about the importance of communicating with
Suppliers & Dealers.
5. Learn about the role of public relations for a Business.
Introduction:
Suppliers and Dealers play important roles in the
supply chain, which connects manufacturers to consumers. Suppliers are
typically at the top of the chain, providing raw materials, semi-finished
goods, finished goods, or services to other businesses. Suppliers are like Partners
in the business, not just Vendors and Dealers are intermediaries who purchase
products and sell them directly to consumers. The relationship between a Manufacturer
and its Dealers is the backbone of an industry. Others involved in the market
chain include stockists, distributors, wholesalers, and retailers.
In this lesson we discuss about Suppliers and Dealers,
Intermediaries in the Marketing, about Market and Marketing, importance of Marketing
Communication and the role of Public Relations in maintaining relations with
all the segments in a marketing chain, in other words distribution channels.
Meaning
of Supplier
· Supplier
is a person or business that provides a product or service to another entity. Supplier
is a person, company, or organization that sells or supplies something such as
goods or equipment to customers including manufacturers of goods.
· Supplier
can lease services or products to another business or a person.
· The
primary duty of a supplier is to provide products of acceptable quality to a
manufacturer, retailer or distributor for process or resale.
· Supplier
may source products directly from the manufacturer, acting as a go-between for
the distributor.
· Supplier
ensures they convey information about the quality of these products from the
distributor to the manufacturer for improvements.
· Acting
as intermediary, supplier bridges the gap between manufacturers and retailers
by offering the raw materials, products, or services that businesses require
for their operations.
Meaning of Dealer
· Dealer
is someone who purchases and maintains an inventory of goods to be sold.
· Dealer
is a person or an organisation who buys a product for their business, stocks it
up and then sells them off the rack.
· Dealer
acts as a middle man between the distributor and the customer and act as
authorized seller of those commodities in a particular area.
·
Dealer
attracts customers from other dealers, and a competitive competition is formed
in the market.
· Dealer
sells goods from different brands at an increased price than what had paid,
making a profit margin.
· In
simple, a dealer is someone who is engaged in dealing with a particular
product, buys it and then sells it off.
What
is a supplier?
As already seen, a supplier is a person or business
that provides a product or service to another entity. The relationship between
a business and its suppliers is symbiotic. Businesses rely on suppliers for the
necessary inputs for their products or services, and suppliers depend on
businesses to purchase their offerings. This interdependence forms the basis of
the supplier-customer relationship in the business world.
Types
of suppliers
Suppliers come in various forms, each serving a unique
role within the supply chain. Here are some common types of suppliers:
1. Manufacturers:
These are the entities that produce goods from raw materials. They are often
the first link in the supply chain, supplying products to wholesalers or
retailers.
2. Wholesalers:
Wholesalers buy goods in large quantities from manufacturers and then resell
them in smaller batches to retailers. Selling wholesale is crucial in the
supply chain as it facilitates the distribution of goods from manufacturers to
various retailers.
3. Distributors:
Like wholesalers, distributors buy products from manufacturers. However, they
often offer additional services such as marketing and after-sales support. They
play a significant role in reaching out to the market and promoting the
products.
4. Independent
craftspeople: These are individuals who produce and supply their own goods.
They might sell directly to consumers, to retailers, or through a distributor.
Understanding the different types of suppliers helps
businesses choose the right ones based on their specific needs and operational
requirements.
Importance
of suppliers:
Suppliers play a vital role at every stage of product
development, from conception to distribution, so to say in the product life
cycle. Their influence extends beyond the provision of raw materials or
services and impacts the quality, cost, and delivery of the final product. Here's
a look at how suppliers contribute at each stage:
1.
Sourcing
raw materials: Suppliers provide the essential raw materials needed to create a
product.
2.
Ensuring
quality control: Suppliers are often responsible for the initial stages of
quality control.
3. Facilitating
production process: By delivering materials or components on time, suppliers
enable smooth production processes.
4. Assisting
in distribution logistics: Some suppliers, particularly distributors, play a role
in getting the product to the market.
Through their significant contribution to the product
lifecycle, suppliers have a direct impact on a product's success in the market.
Therefore, maintaining a good relationship with suppliers is crucial for any
business.
Supplier
relationship management
Like Customer relationship management (CRM), Supplier
relationship management (SRM) is a systematic approach for developing and
managing partnerships with suppliers to achieve a competitive advantage. It
involves creating closer, more collaborative relationships with key suppliers
in order to uncover and realize new values and reduce risk.
SRM is crucial in business as it helps in managing
supplier interactions effectively, ensuring a steady supply of goods or
services, and fostering strong, mutually beneficial relationships. It is a key
component of supply chain management and a determinant of its success.
Benefits
of SRM
1. Cost
savings: Effective SRM can lead to significant cost reductions through improved
process efficiency and reduced waste.
2.
Improved
quality: By fostering closer relationships with suppliers, businesses can work
collaboratively to improve product quality.
3. Better
supplier performance: SRM allows businesses to monitor supplier performance,
identify issues early, and work together to implement improvements.
4. Risk
mitigation: Through SRM, businesses can identify potential supply chain risks
and work with suppliers to develop mitigation strategies.
Best
practices for SRM
Implementing SRM effectively requires a strategic
approach that focuses on building and nurturing relationships with suppliers.
Here are some best practices that can guide businesses in their SRM efforts:
1. Regular
communication to maintain open lines of communication with suppliers to address
issues promptly and foster mutual understanding.
2. Performance
evaluation to assess supplier performance against agreed-upon metrics to ensure
they meet expectations.
3. Long-term
relationship building to focus on building relationships with suppliers, rather
than short-term, transactional interactions.
4. Work
collaboratively with suppliers to identify and implement improvements, rather
than imposing demands.
Through effective SRM, businesses can optimize their
supply chain, improve product quality, and achieve better business outcomes.
What is a Dealer?
There are two types of dealers - direct and indirect.
Direct or authorized dealers will source the products from the manufacturers
and sell them directly to end consumers. Indirect and Independent dealers
deliver them to retailers, who finally sell them to end consumers. Also there
are two classes of dealers. They are Wholesalers and Retailers. Whatever is the
type or classification, a Dealer is the one who deals with the goods for sale.
Let us deal with the Independent Dealers here.
These Independent Dealers save consumer durable goods
manufacturers from appearing as remote, while selling their products in person.
Furthermore, they facilitate superior product support by supplying end users
with more readily available repair services, spare parts, and product
information. Their role in the consumer durable goods industry is to be the
friendly face customers go to when they need help picking out, getting the most
out of, or fixing products.
Another advantage that independent dealers provide to manufacturers
is that they generally draw customers with a wider range of interest than the
customers a single-brand retailer would draw. Independent dealers who also
offer repair services in addition to being points of sale, add value to the product
being sold, since it is generally faster and easier for end users to have their
products repaired by an independent dealer rather than by the manufacturer
themselves. Independent dealers can further add value to the product by
providing manufacturers with customer and usage data, which is otherwise
difficult for them to obtain and is useful for them to implement during new
product development.
Adding independent dealers to their distribution
networks allows manufacturers to acquire knowledge of local areas and provide
speedy after sale services to their end users, at a fraction of the cost of
building their own stores. Furthermore, it grants them better visibility into
who their end users are and how they use their products.
Having learnt the meaning of Supplier and Dealer, let
us proceed to discuss in detail certain other things that are related to them
in the World of business.
Difference
between Supplier and Distributor: While the terms 'supplier' and 'distributor' are often used
interchangeably in the business world, they represent different stages in the
supply chain and perform distinct roles. A supplier is a person or business
that provides a product or service to another entity, often a distributor.
Suppliers can be manufacturers who provide raw materials or finished goods, or
they can be businesses that supply services. They are typically responsible for
ensuring the quality of the products and delivering them to the next link in
the supply chain.
On the other hand, a distributor is an entity that
buys products from suppliers and sells them to the retailer or the end
customer. Distributors often provide added services such as product promotion,
market research, and after-sales services. They play a crucial role in getting
the product from the supplier to the market.
While both suppliers and distributors play critical
roles in the supply chain, the focus of suppliers is more on the production and
provision of goods or services, whereas distributors are concerned with getting
these goods or services to the market.
Role
of Distributor: In a typical
scenario, the supplier delivers materials to the manufacturer. The manufacturer
uses these materials to build products, which it then ships to the distributor.
The distributor delivers the products to the retailer, which then sells them to
the customer. Of course, supply chains are usually much more complex and might
require supply chain management. Multiple suppliers can provide material for
multiple manufacturers, a distributor can buy products from multiple
manufacturers, and a retailer can sell products to multiple customers. A
distributor might even sell products directly to customers.
Difference
between Supplier, Distributor and Wholesaler: The supplier provides the products from the
manufacturer, and sometimes the manufacturer and the supplier are one and the
same. A supplier works with distributors and wholesalers to get them the goods
that they need. Suppliers are at the top of the chain and give them products to
distributors. Distributors take products from suppliers and sell them to
wholesalers and retailers.
Difference
Between Dealer and Distributor: Dealers are individuals or suppliers that sell products directly to
end consumers. These businesses purchase their inventory from distributors,
manufacturers or both and display them in a retail setting for customers to
browse and purchase. Dealers are often the recognizable brand to the end
consumers. In the world of business, dealers play a crucial role as
intermediaries between manufacturers and consumers.
Similarities
between Dealer and Distributor:
1. Supply
Chain Role: Both dealers and distributors play crucial roles in the supply
chain, connecting manufacturers with end customers.
2. Product
Distribution: Both dealers and distributors facilitate the distribution of
products from manufacturers to the market.
At the core of entrepreneurial ecosystem, the two
terms i.e. Market and Marketing continually emerge, often causing a confusion.
On several occasions, it is interchangeably used, resulting in a significant
blur of meanings and implications. Let us examine them.
Market:
Understanding the difference between market and
marketing starts with decoding each term individually. A 'market' is
traditionally defined as a physical or virtual space or pllace where buyers and
sellers meet and interact to exchange goods and services. This interaction is
typically governed by the laws of supply and demand. The market is classified
based on factors like:
1.
Geographic
Size: Local, regional, national, or international markets.
2.
Type
of Customers: Consumer market, industrial market, or reseller market.
3.
Type
of Goods: Commodities market, financial market, or real estate market.
Understanding the nature and dynamics of market is a
crucial step in creating an effective business strategy and to establish
channels of communication.
Marketing
Marketing, on the other hand, is an integral business
function that involves identifying customer needs, developing and delivering
products or services to satisfy those needs. It is a broad and dynamic concept,
encompassing at least 4 important P’s of Marketing:
1.
Product:
Creating a product or service that meets customer needs.
2.
Price:
Setting a price that customers are willing to pay, and that offers a good
return on investment.
3. Place:
Choosing the best channels to sell the product or service that includes physical
or virtual space where buyers and sellers meet and transact.
4. Promotion:
Communicating with potential customers about the product or service. This
includes Public Relations, Publicity, Advertising etc
Marketing, therefore, in simple, is the mechanism that
connects a business to its market.
Key
Differences:
It is necessary here to tell about the key differences
between Market and Marketing for a better understanding of the two terms.
A.
Nature:
While a market is an environment for the transaction of goods and services,
marketing is the set of activities aimed at facilitating these transactions.
B. Purpose:
The market exists to facilitate exchange, whereas marketing exists to identify
and meet customer needs.
C. Orientation:
The market is customer oriented, being the platform where customers make
purchase decisions. Marketing, on the other hand, is business oriented, as it
involves strategies to influence customer behavior.
D. Scope:
The market refers to a specific place or area where trading happens. Marketing
is a wider concept that includes market research, product development,
distribution, sales, and customer service.
E. Dependency:
The existence of a market is a precondition for marketing. A company can only
sell its products or services if there is a market for them.
F. Value
Creation: The market is where value is realized through the exchange of goods
and services for money. Marketing is where value is created through the
development and promotion of products or services that meet customer needs.
G. Communication:
The market is a platform for communication between buyers and sellers.
Marketing involves strategic communication to influence buying behavior.
H. Management:
The market is governed by the laws of supply and demand and is usually not
controlled by any single entity. Marketing, on the other hand, is a managed
function that a company can control and adapt to achieve its objectives.
I. Change:
The market changes with consumer preferences, competitive forces, and external
factors like economic conditions. Marketing, however, changes based on a
company's strategies and business goals.
J. Role
in Business Strategy: Understanding the market is crucial for setting a
business strategy. Marketing is a tool for executing the business strategy.
Marketing
Communications
Marketing communications, also called MarCom, are the
combinations of promotional tools, marketing channels, messages, and media that
marketers use to communicate with their target customers. A business or brand
typically develops its marketing communications strategy around what is known
as the marketing mix of 7Ps. They are Product, Price, Place, Promotion, People,
Process & Packaging. Earlier, this marketing mix was confined only to the
basic 4Ps i.e. Product, Price, Place & Promotion.
All of these are the factors that marketing
professionals consider when developing a marketing communications plan, and
should be carefully and thoughtfully blended together in what is known as
integrated marketing communications (IMC). This enables marketing managers and
professionals to create effective marketing communications, promotions, and
successfully drive business.
Role
of marketing communications
Marketing communications is tasked with a number of
important roles:
1.
Building
brand awareness: Marketing communications is responsible for making sure people
know that the organisation or business exists, and what it offers.
2. Maintaining
customer loyalty: Customer loyalty takes time to build. Consumers need to have
trust in the brand, its products and services, and its intentions and it is one
of marketing communications’ jobs to ensure that this positive bond develops.
3. Creating
demand for products and services: It is not enough to have a great new product
or service. People need to know it exists in order to buy it. MarCom
professionals work to make sure that their products and services are seen by
the people who may need them.
4.
Shortening
the sales cycle: This can be achieved by better understanding the customer needs – as well as customers’ buying
motivations, influences, and processes – and conducting market research.
5. Highlighting
a competitive edge: The 21st century marketplace is a crowded one, which is why
marketing communications professionals ensure that any points of
differentiation are shared with the public.
6. Understanding
and reaching the right people: A key job for marketing communications teams is
knowing who their audiences are, and how best to communicate with them, in
order to create a strong market share.
In order to achieve these objectives, marketers will
leverage a number of different types of communication formats and marketing
communications areas.
Areas
of marketing communication
Advertising is one of the most commonly seen areas of
the marketing communication mix. Adverts are used by businesses and
organisations to promote their products and services through different mass
media communication channels, such as Television, Radio, Newspapers, Magazines,
Billboards, Websites, Blogs, Social Media Apps, Text Messages. These are in
addition to various kinds of corporate publications brought out by the business
establishments.
Maintenance
of relations:
Maintaining good relationships with suppliers and
dealers can be crucial for a long-term success. Strong relationships can lead
to better product quality, reduced costs, and increased reliability. The
benefits are (a) better service for consumers, (b) reduced delays, (c) resolve quality
issues, and (d) handling availability problems while the strategies are (a) Treating
suppliers like partners, (b) being respectful and trustworthy, (c) communicating
consistently, and (d) addressing any issues promptly.
Role
of Public Relations
Public relations means ‘building good relations with
the company’s various publics that includes Suppliers, Dealers, Customers and
every class and category of public connected to it, by obtaining favorable
publicity, building up a good corporate image, and handling or heading off
unfavorable rumors, stories and events’.
Not only must the company relate constructively to
consumers, suppliers and dealers, but it must also relate to a large number of
interested public. The business world of today is extremely competitive.
Companies need to have an edge that makes them stand out from the crowd,
something that makes them more appealing and interesting to both the public and
the media.
The public is the buyers of the product and the
management is responsible for selling it. A public is any group that has an
actual or potential interest in or impact on a company’s ability to achieve its
objectives. Public relations involve a variety of programs designed to promote
or protect a company’s image or its individual products.
The main goal of a public relations department is to
enhance a company’s reputation along with promotion of product or the service
of the company. As skilled publicists, PR people are able to present a company
or individual to the World in the best light.
Public relations provide a service for the company by
helping to give the public and the media a better understanding of how the
company works. Within a company, public relations can also come under the title
of public information or customer relations. These departments assist managements
pursue the objectives.
Public relations has two types of functions:
1. Marketing
functions: According to Thomas L. Harris, ‘marketing public relations function
is the PR activities which are designed to support marketing objectives’. Some
of the marketing objectives that may be aided by PR activities includes raising
awareness, informing and educating, gaining understanding, building trust,
giving consumers a reason to buy and motivating consumer acceptance.
2. Non-marketing
PR functions: As a non-marketing function, the primary responsibility of a PR
is to maintain mutually beneficial relationship between the organization and
the public, employees, community, investors, government, customers, and other
interest groups. At the other end of the continuum, PR is primarily considered
to have marketing communication functions. In this, all non-customer
relationships are perceived as necessary only in a marketing context.
Summary:
Suppliers are typically at the top of the chain,
providing raw materials, finished goods, or services to other businesses.
Dealers are those who purchase products and sell them directly to consumers. The
other intermediaries involved in the market chain include stockists, distributors,
wholesalers, and retailers. Suppliers and Dealers play important roles in the
supply chain, which connects manufacturers to consumers. There is a need for
the people in Corporate Communications and Public Relations wing of an
Organisation to know various forces involved in marketing mix vis a vis supply
chain to devise marketing communication plans. Maintaining good relationships
with suppliers and dealers can be crucial for the long-term success of a
business. Strong relationships can lead to better product quality, reduced
costs, and increased reliability.
FAQs
1.
What
do you understand by Supplier & Dealer relations?
2.
Enumerate
the types of suppliers?
3.
What
is your understanding about the Dealer?
4.
Explain
‘marketing communication’ briefly.
5.
What
is the role of PR in Supplier & Dealer relations?
Model Answers
1.
Supplier and Dealer relations
means establishing and maintaining meaningful and useful relations by an
Organisation with the suppliers of raw materials, semi-finished and finished
products and also with the dealers who deal with the products on behalf of the
Organisation. Suppliers are typically at the top of the chain, providing raw
materials, finished goods, or services to other businesses. Dealers are those
who purchase products and sell them directly to consumers. The other
intermediaries involved in the market chain include stockists, distributors,
wholesalers, and retailers. Suppliers and Dealers play important roles in the
supply chain, which connects manufacturers to consumers. There is a need for
the people in Corporate Communications and Public Relations wing of an
Organisation to know various forces involved in marketing mix vis a vis supply
chain to devise marketing communication plans. Maintaining good relationships
with suppliers and dealers can be crucial for a long-term success of any
business. Strong relationships can lead to better product quality, reduced
costs, and increased reliability.
2.
Suppliers as manufacturers are the
entities that produce goods from raw materials. They are often the first link
in the supply chain, supplying products to wholesalers or retailers. As wholesalers,
the suppliers buy goods in large quantities from manufacturers and then resell
them in smaller batches to retailers. Selling wholesale is crucial in the
supply chain as it facilitates the distribution of goods from manufacturers to
various retailers. Suppliers play the role of distributors. Like wholesalers, they
buy products from manufacturers. However, they often offer additional services
such as marketing and after-sales support. They play a significant role in
reaching out to the market and promoting the products. Independent craftspeople
who produce and supply their own goods. They might sell directly to consumers,
to retailers, or through a distributor. Importers and exporters are also
suppliers. They operate on an international scale, importing goods from
manufacturers in one country and exporting them to retailers in another. They
play a critical role in global trade and the international supply chain.
4. Marketing communications, also called MarCom, are the combinations of promotional tools, marketing channels, messages, and media that marketers use to communicate with their target customers. A business or brand typically develops its marketing communications strategy around what is known as the marketing of 7Ps. They are Product, Price, Place, Promotion, People, Process & Packaging. Earlier, this marketing mix was only basic 4Ps i.e. Product, Price, Place & Promotion. All of these are the factors that marketing professionals consider when developing a marketing communications plan, and should be carefully and thoughtfully blended together in what is known as integrated marketing communications (IMC). This enables marketing managers and communication professionals to create effective marketing communication promotions, and successfully drive business.
5. The main goal of a public relations department is to enhance a company’s reputation along with promotion of product or the service of the company. As skilled publicists, they are able to present a company or individual to the world in the best light. Public relations provide a service for the company by helping to give the public and the media a better understanding of how the company works. Within a company, public relations can also come under the title of public information or customer relations. These departments assist managements pursue the objectives. Public relations means ‘building good relations with the company’s various publics that includes Suppliers, Dealers, Customers and every class and category of public connected to it, by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories and events.
Multiple
Choice Questions
1.
SRM
stands for ______ _______ _________.
a.
Supply
Regulation Manager
b.
Sender
Receiver Management
c.
Supplier
Relationship Management
d.
Sustainable
Relationships Management
2.
__________ is not an intermediary in the
supply chain.
a.
Dealer
b.
Customer
c.
Distributor
d.
Stockist
3.
The
basic Four P’s of Marketing Mix are -
a.
Product,
Price, Place & Promotion
b.
Product,
Publicity, Price & People
c.
Product,
Price, Promotion & Process
d.
Product,
Place, Price & Packaging
4.
__________ is not a mass media channel.
a.
Newspaper
b.
Radio
c.
Television
d.
Corporate
publications
5.
The
market is not classified based on _________.
a.
Government
b.
Goods
c.
Customers
d.
Geography
Glossary:
Market: A physical or virtual space or place where goods or services are
bought and sold.
Marketing: The process of promoting and selling products, services or ideas to potential customers and various other aspects right from the concept of creating something till customer satisfaction.
Manufacturer: A business or organisation that produces goods or products on a large scale using raw materials, components and labor.
Supplier: An individual or an entity that provides goods or services to another individual or entity often in a business to business context.
Dealer: An individual or business that buys and sells goods or services, often acting as an intermediary between manufacturers and customers.
Distributor: A business or individual that purchases products from a manufacturer or supplier and resells them to retailers, wholesalers or other intermediaries.
Wholesaler: A business or individual that purchases large quantities of products from manufacturers or distributors and resells them to retailers, other wholesalers or other intermediaries.
Retailer: A business or individual that sells products directly to consumers, often through a physical store, online platform or catalogue.
Stockist: A person or business that stocks products or goods on behalf of another company and sells them to retailers rather than consumers.
Marketing communication: Also known as MarCom is a process of planning, creating and delivering messages to target audiences to promote products, services or ideas.
Key words: Supplier, Dealer, Distributor, Wholesaler, Retailer, Stockist, Market, Marketing, MarCom, Marketing Mix
Y. BABJI
Academic Counsellor, Public Relations (since 1989)
AP Open University/Dr BR Ambedkar Open University
Editor, Public Relations Voice
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