Question

name the various kinds of middlemen and dicuss the functions, advantages, and disadvantages of them. give examples of portugal to support the topic.

Answer 1

Middlemen are the ones which helps to deliver goods from the manufacturer to tha ultimate buyers. The main fuction of middlemen is to supply goods to consumers when and where they want. To achieve this objective they buy the products from manufacturer,store them and then transfer them to ultimate buyers. In this process they assume risk such as perishability,theft,etc. Middlemen promote goods on behalf of manufacuturer to consumer. Middlemen include wholesellers,retailers,agents and brokers.

Functions

• Middlemen act as link between the product's manufacturer and the ultimate buyer.
• They make sure that consumers get the product when and where they require.
• They assure that consumers get the product according to their taste and preferences.
• They as marketing agent of the manufacturer. They market the product on behalf of manufacturer to the consumer
• They also provide fianacial help to the manufacturer.
• In this process,middlemen charges some cost such as commission,brokerage,etc

Advantages

• Reduced cost : It becomes difficult as well as costly and time consuming for a manufacturer to produce a product as well as do marketing of the same , identify potential buyer and sell the product. Also stocking of the product increases cost and risk
• Focus on core competency: It would be difficult for a manufacturer to market the product and identify potential buyers. this task is taken care by the middlemen,they market the product,identify the needs of the customers,sell the product to the one who needs. this helps the manufacturer focus on their core competency
• More efficient marketing : As the retailers are more aware about the market and know the needs of the customers of the area ,it is possible to market the product of the manufacturer easily and efficiently
• Wider customer reach : As the middlemen are the one who are in direct contact with the customer ,it is possible to make our prodcut reach more and more customers
• Easy feedback : As the middlemen such as retailers are in direct contact with the customers ,it is possible to get feedback on the product of customers easily and speedily

Disadvantages

• Less profit margin : Each member in the distribution channel add their profit in the price of the product,manfacturer has to keep low profit margin so as the customer gets the product at reasonable price
• High product prices : As each member adds their profit in the price of the product,consumers get the product at high prices compared to the one they get directly from the manufacturer.
• Less passionate in selling the product : retailers has many products to sell hence he is less passionate to sell the product of the manufacturer as compared to manufacturer himself
• Retailer pay less attention to the message convyed by the manufacturer to the consumer.
• Retailer has multiple products to sell which also includes competitor's product.