The Roles Of Middlemen In The Channels Of Distribution (A Case Study Of Tropical Venture, Enugu)
Abstract of The Roles Of Middlemen In The Channels Of Distribution
This project work titled the “Role of middlemen in channel of distribution” an important element in the marketing mix of any form, is the system of marketing channels through which products and services are distributed to the final consumers or ultimate users. A marketing channel is a loosely connected system comprising of a manufacturer, middlemen and the ultimate users. Wholesalers and retailers are the functional middlemen for manufacturers.
The writer described the problem under study and the relative importance of the study. There is also the destination of channels of distribution and that of middlemen who are involved in the distribution of goods and service to their place of use. It is seen here that channel of decisions is very vital to a form and to some extent determines the success of a product in its life time.
The functions of middlemen was also discussed below, their importance in Nigerian economy and also the problems associated with them.
Importance fund were signed not to enable conclusions and recommendation to be drawn. With light of finding, recommendations were made, that is instead of the middlemen being eliminated from the channels of distribution, their functions should be improved. However it is the research hope that if the recommendation made property implemental, the user will have a smile on their face.
Chapter one of The Roles Of Middlemen In The Channels Of Distribution
1.0 INTRODUCTION
1.1 GENERAL BACKGROUND TO THE SUBJECT MATTER
A product may be in the world, but it will be of little use to the consumers, that is when these products cannot be seen where it is want. This is concerned with the place where the end users can acquire these good for use when the need arises.
Distribution simply means the flows of good from the producer to the end users through the channels of distribution, which is made up of middlemen,
Distribution of good and services has been an essential aspect of marketing in our lives. Though it was not recognized.
Distribution in 90’s is the most important link for acquiring good and services from the producers to the final consumers. Even with a soaring inflationary period which may break all records in the short history of Nigeria, distribution still is vital to the continued existence of business.
Producers, at their on set engage in distribution of their products. But when the demand for these products increased, they found that there was no enough time, energy and the expertise needed for effective distribution “Philip Kotler 1985 Pg.40” there came the need for expertise or middlemen in which tropical ventures engaged themselves in this come about due to the fact that producers are fully engaged in the production of goods to meet the increasing demand of goods and services.
As the economy continues to advance, retailer began to specialize. Since the retailers were unable to handle the distribution effectively, there come the wholesalers who now draw from a large number of producers. This was how middlemen came into the scene as link between producers and final consumers. As time goes on there come the need for agents distributors, brokers etc. springing into the chain of distribution
1.2 PROBLEMS ASSOCIATED WITH THE SUBJECT MATTERS
Before the researcher says he went to research on this topic there are problems militating against the activities of middlemen. These problems are discussed below in the sub heading which are the problems.
1.2.0 NUMEROUS MIDDLEMEN: – In the chain of distribution, there are a lot of middle. These constitutes to the high prices charged on goods and services. These middlemen can neither be classified under the wholesaler nor the retailers.
1.2.1 UN-IDENTIFIED CHANNELS OF DISTRIBUTION: – Channel of distributions are too numerous to be identified when this is identified the unnecessary middlemen can be removed in between the identified channel.
1.2.2 PRICE INCREASE:- Buckman, & Czepriel S. marketing strategy Chicago American associated 1963 pg. 70 says that as soon as a wholesaler purchases a product from a producer, definitely he/she will add his/her own margin so also the retailers. When this addition of margin continues prices of goods and services can be increasing.
1.2.3 WRONG CHOICE OF CHANNEL: – Middlemen sometimes choose a wrong channel of distribution. This happens because they fail to firstly look at the nature of the product. Here, the nature of a product should be looked into before determining the channel to be used. For instance, perishable goods, this type of product may require direct distribution from the producer to the end users to recent them getting spoiled.
1.2.4 UN-NECESSARY CRITICISM: – Middlemen face a lot of criticisms. This should not be the case, the role they play should firstly be known any criticism should be mounted on them.
1.2.5 LACK OF SKILL: – Due to the un-necessary middlemen in the chain of distribution, hardly one could detect those who has the skill or not. This lack of skill has made some middlemen to feel that the purpose of their being there is for profit maximization.
1.3 PROBLEMS THAT THE STUDY WILL BE CONCERNED WITH
This is to determine whether to remove the middlemen or to retain them in the chain of distribution. The marketers and the producers maintained that middlemen should be retained but the consumers maintained that middlemen increase the cost of products. Philip Kotler marketing management new Jersey Practice hall Inc. anglemool Coliff 1980 Pg.60.
For the fact that marketing intermediaries performs some function irrespective of the valuable functions. It has been suggested that they should be removed as links between producer and the users.
At the end of this project work we shall know whether to live the middlemen to continue their work or to remove them totally.
1.4 THE IMPORTANCE OF STUDYING THE AREA
This project work is very much related the business organizations. No organization is formed to run at a loss. The use of goods and services in organization partially determines the success of the organization especially when the work is left in their hands without constant monitoring or checking.
The project will enable the researcher get in-depth touch with the problems hindering the smooth function of middlemen. It would therefore enable us to offer useful suggestion and contribution in solving these problems.
The researcher should be able to know if the criticisms, that middlemen should be eliminated, since the merely increase prices of goods and services.
The findings of the research can be also be relevant to the government in the sense that they will be able to intervene in the flow of goods and services.
Students also can benefits from this project work, this is only those wishing to carry out a detailed work on the project and Nigeria in general wants to be acquitted with the function and importance of middlemen.
1.5 DEFINITION FO IMPORTANT TERMS
1.5.1 PRODUCERS: – These are those engaged in the transformation of raw materials into finished goods.
1.5.2 PRODUCT: – This is the output of their producers production.
1.5.3 CONSUMERS: – These are those engaged in the consumption of the produced goods and services.
1.5.4 DISTRIBUTION: – This is simply the spreading of the product to the final consumers.
1.5.5 MIDDLEMEN:-These are those engaged in the distribution of goods and services.
1.5.6 CHANNEL/CHAIN:- This is the way through which goods and services are distributed to the users.
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