How disintermediation is changing the rules of marketing, sales and distribution
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How disintermediation is changing the rules of marketing, sales and distribution Christopher Ryan Received (in revised form): 27 October 1999
Abstract
Keywords: Disintermediation, infomediary, Internet, e-commerce, distributors, middleman
Disinter — to unearth, to displace; and mediate — to act as middleman. Combined, they mean to displace the middleman. Disintermediation signifies major shifts in how we market, sell and deliver products. In many industries, distributors are disappearing and being replaced by electronic media. As a result, direct sales forces are shrinking and their role is changing. On the other hand, marketing is being forced to become a revenue-producing part of the organisation. This paper discusses how field sales is waning in power, marketing is gaining ground, and the biggest beneficiary is the customer. As a result, there is a new class of middlemen called infomediaries, By comparing old and new business-to-business sales and marketing models, we discover both the beneficiaries and the potential casualties of disintermediation. This paper discusses these major trends and recommends what companies must do to thrive in the emerging marketing landscape.
Introduction
Christopher Ryan, President, Saligent Software, Inc., Colorado Springs, Colorado, USA Tel: 719 590 4044 Fax: 719 590 1634 E-mail: [email protected]
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Disintermediation is not just a long word it signifies major shifts in how we market, sell and deliver our products. In many industries, distributors are disappearing and being replaced by electronic media. Direct sales forces are shrinking and marketing is forced to become a revenue-producing part of the organisation. This paper discusses these major trends and what companies must do to thrive in the emerging marketing landscape. The dictionary shows no definition for the word disintermediation. However, if you break up the word into two parts, the meaning becomes clear. Disinter is defined as to unearth, to displace, and mediate is defined as to act as middleman. Put the two definitions together and you have to displace the middleman. This is precisely what disintermediation does in todays economy it displaces the middleman. But it is also creating a whole new class of middlemen called information infomediaries. Because of the massive changes in the amount of data available, and the easy access to these data by anyone with a Web browser, sales and marketing departments have to take a fresh look at how they conduct their operations. In many organisations, field sales will no longer be
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How disintermediation is changing the rules of marketing, sales and distribution
Disintermediation — To displace the middleman
king of the hill and, in fact, many field reps will lose their jobs or be moved to other positions. As field sales wanes in power, marketing will gain in power. However, marketing m
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