Question

a channel between the manufacturer and the customer as intermediaries, or to use a more common term, middlemen. That's a useful description, because they are "in the middle" of the channel, and stand between the manufacturer and the consumer.

Imagine a recent MBA graduate who has just gone to work at Procter and Gamble. She is assigned to be an assistant brand manager on Pantene, P&G's best-selling brand of shampoo. She develops a proposal she calls "Cut Out The Middlemen!" Her idea is to sell Pantene directly to consumers using the company's website. The price will be less than it would cost the consumer to buy in a retail store, but P&G would make a lot more money than they get selling the product to wholesalers.

If you were on the marketing team at Pantene, what would you tell her? Is this a good idea that could work? Is it a bad idea that's destined to fail? Explain your reasoning to her in one well-written paragraph.

Answer 1

Eliminating the middleman completely from the marketing channel may not always be the most sensible move. Having a middleman does inflate the selling costs but there many advantages of having a middleman. They are an important link between the company and the customers. They help in reaching out to a much larger customer base and in distributing products to customers who live in a wide geographical area. For the company, it is cheaper and effective compared to setting up its own distribution channel. Middlemen can stock different products at the same time. They are the last mile connection with the customers. They are in a better position to gather customer feedback and pass it on to the company for further product development. They can provide valuable inputs to the company while devising various promotional activities.