Product Distribution Is Changing the Much-Predicted Demise Essay

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Product Distribution Is Changing

The much-predicted demise of the middlemen, including the fundamental re-ordering of entire distribution networks including the onslaught of the direct selling model, has failed to materialize. The revolution and rapid ascent of disintermediation is being replaced with a much more potentially disruptive force in many industries, and that is a fundamental change in how customers choose to learn and buy products (Shunk, Carter, Hovis, Talwar, 2007). Ironically the disintermediation that was to occur in computer hardware and technologies has given way to a re-intermediation of the value-added reseller (VAR) where knowledge and insight into meeting customer needs is replacing what had been purely theoretical frameworks showing how disintermediation would create more efficient value chains (Mills, Camek, 2004).

Analysis of Disintermediation In The Age of Knowledge-Based Competition

The traditional role of the middlemen, specifically focusing on streamlining the transaction from a manufacturer or service provider to the customer was not dis-intermediated by price, it was changed by two significant factors. The first is the factor of how quickly customers are changing their preferences for how they learn about, purchase, stay loyal to, and seek service from brands they have purchased in the past (Rosenbloom, 2007).

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The second has been the flattening of many industry value chains where the customer is now the co-creator of value (Mills, Camek, 2004). These two trends have forces the middlemen, or value-added resellers in many industries to differentiate not just on managing a part of the transaction, but on delivering valuable intelligence and knowledge to help the end customer attain the goals they want, or solve the problems they are buying the product to address. Paradoxically disintermediation has given way to a re-integration of resellers and channel partners who have the most knowledge and insight to share in serving the end customers. The only disintermediation occurring today is for resellers who fail to stay in step with the needs of the customer and also stay current on the latest information, intelligence and knowledge needed to stay relevant to customers. Only by being a knowledge re-intermediator can any reseller hope to continually earn….....

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