Q11 - Q1. It is often said that middlemen are unnecessary...

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Q1. It is often said that middlemen are unnecessary they cause price inflation. Do you agree with this statement? Explain with suitable examples. Ans: Middlemen or the channels of distribution bring the manufacturer and the user together in an economic manner and provide distribution efficiency to the manufacture. The middlemen perform the following important functions: 1. Minimise the number of contacts needed for reaching consumers In most cases, it is impractical for a manufacturing firm to sell its entire production directly to the consumers. Resource constraint is the first hurdle in this regard. Even assuming that the required resources can be found, the question arises whether it will be advantageous for the firm to sell its products directly and all by itself, totally avoiding external marketing channels. Analysis shows that in most cases, using external marketing channels/intermediaries is more advantageous to the firm than performing the distribution function all by itself. When these channels are dispensed with, the number of contacts a manufacture will have to establish, to reach out to the consumers are far too many. The channels of distribution help minimise the number of contacts. 2. Break the bulk and cater to tiny requirements Channels break the bulk and meet the small-size needs of individual consumers. 3. Supply products in suitable assortments Channels also combine products and components manufactured by different firms and offer them in assortments that are convenient to users. The users normally need an assortment of items. They will shop at only those outlets, which supply such assortments. A manufacturer cannot meet the need for such assortments, since it will not be feasible for him to take up distribution of other products required by the customers. Thus the channels render the vital service of assembling the products of different manufacturers and offering them to customers in suitable assortments. In other words, the channels help in matching segments of supply with the segments of demand. 4. Provide Salesmanship
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Marketing channels also provide salesmanship. In particular, they help in introducing and establishing new products in the market. In many cases, buyers go by the recommendation of the dealers. The dealers establish the products in the market through their persuasive selling and person-to-person communication. They also provide pre-sale and after-sale service to the buyers.
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This note was uploaded on 01/19/2012 for the course COMPUTER S 255 taught by Professor Sahani during the Spring '11 term at Amity University.

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Q11 - Q1. It is often said that middlemen are unnecessary...

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