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Problem

For many years, critics have charged that intermediaries contribute strongly to the rising prices of goods in the American economy. Would business marketers improve the level of efficiency and effectiveness in the channel by reducing as far as possible the number of intermediate links in the channel? Support your position.

Step-by-step solution

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Step 1/2

Intermediary is a third party or a middleman which or who make it possible to provide the product from manufacturer to end user. Basically intermediary facilitates the contact between buying and selling party.

Step 2/2

Intermediary’s selection is an ongoing process some intermediaries leave the channel for their own reasons while some are terminated by business marketers. Performance of the each and every individual intermediary is evaluated continuously and on the basis of this evaluation business marketers replace poor performers with potentially better ones.

Except replacing poor performers business marketers re-evaluate the list of potential intermediaries with the help of salespersons of the organization and customers which result a reduce list of intermediaries.

When the number of intermediaries will be reduce then the overall distribution cost will also reduce because intermediaries make a profit for themselves in distribution process.

In the distribution process the importance given to the manufacturer’s product by intermediaries is not under manufacturer’s control, if the number of intermediaries will be decreases then the manufacturer’s control on the product will increase and product may gain greater importance by intermediaries.

By reducing the number of intermediaries in distribution process, organizations not only gain more profit but also gain control on intermediaries and their products which will increase the efficiency and effectiveness of the organization.