Question

Mark A. Teer believes he has found a surefire way to save money. He advises his friends, "Buy direct from the manufacturer. Any time intermediaries get involved, you'll pay a higher price. After all, every intermediary involved in the marketing process must charge enough to earn a profit." Mark's advice:

Answer 1

Answer: C.is not valid in many cases. Intermediaries do add costs to products, but they also create value by performing marketing functions efficiently. In many cases the value they create morethan offset the costs they add.

Explanation:

Mark is definitely right, in some cases. Buying directly from the supplier does remove the middleman but it's not always wise to do so.

Why?

The Middlemen/ Intermediaries have adapted to their role and therefore offer more advantages than disadvantages more often than not.

If a Channel of Distribution has no intermediaries for instance, producers and consumers would have to find a way to connect their own selves and more often than not, this will be very inefficient.

Imagine having to go directly to Pfizer to buy medication for instance. Or buying gasoline from the refineries yourself.

Intermediaries also provide important MARKETING functions for goods that Producers are unable to most of the time. This is because, again, they have adapted to the situation and know how to link producers to customers.

Intermediaries generally provide more value than they cost.