Question

Marketing Final

Suppose the president manufacturing firm has asked you to look into the possibility of bypassing the firm’s wholesalers (who sell to carpet, department, and furniture stores) and selling direct to these stores. What caution would you voice on this matter?    List 4 questions you would ask the manufacturer. (40 points)

Answer 1

Suppose the president manufacturing firm has asked you to look into the possibility of bypassing the firm’s wholesalers (who sell to carpet, department, and furniture stores) and selling direct to these stores. What caution would you voice on this matter?

Removing the wholesalers from the distribution channel must only be done by the carpet manufacturing company if its customers are not scattered in a wide geographical area. Distributing the carpets to the stores separated by a large area would be time consuming and costly if the company does not use a wholesaler. The company must collect information about the transportation facility available in its market before making this decision. This information is crucial as the transportation facility is the backbone of every distribution system in the world.

- Consider functions the distributors perform. - compare the cost of the distributer and the cost if you distribute it yourself. - Also, functions performed by distributors, such as maintaining sensitive relationships with customers, are difcult to put a monetary value on. - qualitative factors must enter into the decision as well. Is it worth it to take out the middle man.