Gray Market: Opportunities for Producers and Distributors

Abstract

There are 2 type of marketing channel for producers. The first one is marketing channel thru authorized agent and marketing channel thru unauthorized retailer which producers can sell a lot of their products through unauthorized retailer. Producers can sell their inventories (in-stock products), nearly expired products, defective products, do-not-pass quality standard products, unattractive color products, unpopular products, unattractive color package products, sample and on-line products, thru gray market. But it effect authorized agency’s satisfaction so they will sell other producer’s products because the product’s price in gray market is cheaper but no-after-sell service or limited-after-sell service that effect brand equity.