We have all heard advertisements that claim "we cut out the middleman and pass the savings...

We have all heard advertisements that claim "we cut out the middleman and pass the savings along to you".

Now that you are familiar with distribution, explain why retailers such as Wal-Mart and Target remain successful in spite of being "middlemen".

Expert Solution

Retailers such as Walmart and Target have very good marketing strategy and planning and are one of the biggest retailers in the world. Specially Walmart is famous for everyday low prices, and just as in famous in maintaining those low prices by negotiating tough deals with suppliers. It has very good market share in the world and because of that it sold product keeping low margin with low prices. Despite that low prices it earn very huge profit due to huge turnover. Walmart are involved in direct purchase from manufacturers and that is resulted for low cost raw material. It has biggest retail store in the world and has huge demand of its product that results in very handsome profit. Due to Walmart strategy the prices of many product are very low compared to same quality product in some other direct stores of manufacturing companies. These all are reasons why retailers like Walmart and Target remain successful in spite of being “middlemen”.

ekkarill92 answered 2 years ago

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