The term arranger is used to describe a type of specialized firm that provides facilitation services. In many situations, the service is unique to a few specialized users. In other situations, the service may be specific to an industry. Three typical examples of the broad variety of potential arrangers are: (1) specialized agents and brokers, (2) liquidators, and (3) diverters.
Merchant agents and brokers are presented as a specialized type of wholesaler that engages in selling or buying goods for others. Agents and brokers do not typically take either ownership or physical possession of the products for which they arrange transaction. Beyond the more typical brokers that deal in merchandise transactions, there are numerous very specialized agents and brokers who function the service industries. Among the most visible are agents who represent sports entertainment celebrities. Examples are Peter Johnson who represents quarterback Montana, and Michael Ovitz, chairman of Creative Artists Agency, Inc ., who packaged promotional arrangements for such clients as Earvin (Magic) Johnson, Dust Hoffman, and Tom Cruise. Specialized agents are also common in the travel industry, real estate, stock market, investment banking, trucking, international custom facilitation and speaking tour engagements for current and former public figures. Because the services performed by these specialized agents and brokers range so widely from situation to situation, it is difficult to offer a profile of a typical agent. While closely related to their counterparts in the merchandise wholesale structure, agents and brokers who specialize in arranging are active participants in service marketing channels.
A liquidator is a special type of channel participant who arranges disposition of over stocked or close out merchandise. For example, when Johnson & Johnson decided to discontinue manufacturing and marketing infant disposable diapers in the United States, they arranged for a liquidator to dispose of their existing inventory in central and South America. One unique liquidation arrangement is promoted by its sponsor as marketing insurance. The liquidator arranges disposition of merchandise overstocks in exchange for advertising media time and space. This exchange permits firms to divert planned expenditure for promotional media time to offset the cost of inventory mark downs. The nature of the liquidator’s makes its activities very user specific. Liquidators are common in the general merchandise, paper, heavy machinery, farm implements, and transportation equipment industries. While many liquidators specialize in facilitating bankruptcies, others regularly operate to help balance channel inventory.
The diverter is a long standing type of arranger that has recently become a very active participant in the consumer food, health and beauty aids, and general-merchandise marketing channels. The diverter flourishes in a marketing environment characterized by very active promotional dealing. To stimulate volume, many firms resort to promotions during which they offer products at very attractive process. The typical promotion runs for an announced period of time during which involved customers can purchase at deal prices. Because the typical promotion price is significantly lower than the regular price, customers are tempted to forward buy merchandise. The diverter stands ready to arrange resale of the forward buy merchandise if the retail or wholesale firms get overcommitted. Forward buy is a practice by which firms purchase a larger quantity than their normal needs in order to take advantage of a specially priced deal. Since most promotions are regional in nature, potential buyer can typically be found that does to currently qualify for the promotion. In fact, many diverters will seek out customers who need a specific product and then locate a firm that is eligible to buy at the promotional price. They will then arrange for the eligible manufacturer to purchase products for resale to the diverter’s customers. The impact of a diverter on an industry can be significant. In effect, diverters serve to neutralize the impact of price promotional deals. Whereas they take some of the risk out of forward buy for retailers, they cause manufacturers promotional strategies to become distorted.