Disintermediation is a big term with a clear message and important consequences– the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries.  Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones.

Disintermediation is a reduction in the flow of funds into the banking system that causes the amount of financial intermediation to decline.

Disintermediation is the process of eliminating traditional intermediaries. Eliminating intermediaries has the potential to reduce costs since each intermediary must add to the price of the product in order to make a living.

Share it:  Cite

More from this Section

  • Joint ownership
    Joint ownership ventures consist of one company joining forces with foreign investors ...
  • Buzz marketing
    Buzz marketing is a personal communication channel that involves cultivating opinion leaders ...
  • Profitable customer
    Profitable customer is person, household, or company that over time yields a revenue stream ...
  • Break-even pricing
    Setting price to break even on the costs of making and marketing a product or setting ...
  • Markup
    Markup is the difference between company’s selling price for a product and its costs ...