FACULTY OF MANAGEMENT &

RESEARCH MARKETING MANAGEMENT

TOPICS

•ROLE OF MIDDLEMEN

•ROLE AND IMPORTANCE OF INVENTORIES

PREPARED BY

1. SADAN NOUMANI2. SHARAD SINGH

•INTRODUCTION•FUNCTION•TYPES•IMPORTANCE

ROLE OF MIDDLEMEN

INTRODUCTIONMiddlemen provides a link between consumers

and producers.

The role of middlemen in marketing is to act as a intermediary or agent between two parties. A middlemen can be a dealer ,agent or company who deals with both the producers of goods and the retailers/consumers.

For example– wholesalers, agents, retailers and brokers.

MIDDLEMEN AS A TRADER

FUNCTIONS

The core function of middlemen is to be deliver goods to the consumers when and where they want them.

To achieve this ,they buy the products from the producers ,store them as they search for viable markets and then transport them to the consumers.

In the process they assume any risks facing the goods for instance ,theft perish ability and other potential hazards.

In addition middlemen promote the goods to the consumers on behalf of the producers.

OTHER FUNCTIONS

Promotion— promoting the product in his territory is another function that the middlemen perform. Many of them design their own sales incentives programs aimed at building customer traffic at their outlets.

Price stability– maintaining price stability in the marketing is another function a middlemen performs.

Information– middlemen have a role in providing information about the market to the manufacturer developments like changes in customer’s demography, psychology, media habits and the entry of new competitor or a new brand and changes in customer preferences are some kind of information that all manufacturer want.

Financing – Middlemen finance manufacturer’s operations by providing the necessary working capital in the form of advance payments for goods and services.

The payment is in advance even though credit may be extended by the manufacturer, because it has to be made even before the products are bought and consume and paid for by the ultimate customer.

Since, these middlemen are close to the customer and present in the market place they can provide this information at no additional cost.

TYPES

Wholesalers

Retailers

Agents and Brokers

Wholesalers and Agents

Wholesalers and retailers are the two important types of middlemen forming a part of the distribution channels.

They act as an intermediary link between the manufacture and the consumer of goods.

They reduce the amount of efforts required by the manufacturer in distributing his product to the final consumers and provide a vast market coverage to his products.

They provide ready delivery of goods to the consumer at places convenient and accessible to them.

They also provide after sale services and handle consumer grievances.

They also act as a communication channel by providing information about the products to the consumers, on one hand, and the consumer feedback to the producers on the other hand.

Wholesalers and Agents

Wholesalers and Agents are closer to the producers Wholesalers buy the goods in bulk and sell them to the retailers in large quantities.

Retailers and brokers acquire the goods from the wholesalers and sell them in small quantities to the consumers.

Retailers and brokers acquire the goods from the wholesalers and sell them in small quantities to the consumers.

Wholesalers and Agents are closer to the producers Wholesalers buy the goods in bulk and sell them to the retailers in large quantities.

TYPES OF WHOLESALERS

Merchant wholesalers– Independently own businesses that take title to the merchandise they handle. They are full service jobbers, distributer and mill supply houses.

Full service wholesalers– they carry stock, maintain sales force, offer credit, make deliveries.

Limited service wholesalers– cash & carry wholesalers sale a limited line of fast moving goods to small retailer for cash.

Specialized wholesalers– agricultural assemblers, petroleum bulk plants, auction companies.

TYPES OF RETAILERS

Retailers are of different types depending upon there scale of operations and locations. They are broadly classified into two categories

Small Scale Retailers-- Those retailers whose scale of operations is restricted to a small segment of the market and to a narrow range of products. They generally hold small stocks of the products of regular use.

Small scale retail in India are-- Mobile traders etc.Fixed shop retailers:- such as general stores, readymade

garment shop, sweet shop etc.Large scale retailers– those retailers whose scale of

operation is extended to a small segment of the market. E.g. Supermarket, big bazaar , catalog showroom etc.

IMPORTANCE

Middlemen are very important players in the market. Both the consumers and producers gain immensely

from the roles of middlemen who insures that there is a seamless flow of goods in the market by matching supply and demand.

Middlemen provide feedback to the producers about the market, thus influencing the decisions made by the manufacturers.

Buyers on the other hand ; gain from the services offered by middlemen, such as promotion and delivery.

buyers can get the right quantity they want; as intermediaries are able to sale in small units.

EFFECT ON PRICE

Regardless of the importance they play, there are some disadvantages to having intermediaries in the distribution channel. As the goods are exchanged from one middlemen to the other, there prices inflate. The rational behind higher prices is to cover expenditures on the goods such as warehousing, insurance and transportation costs.

Intermediaries are also out to make profits hence they have to include some profit markup in the sales. Consumers then bear the price of having intermediaries in the channel.

ROLE AND IMPORTANCE OF INVENTORIES

INTRODUCTION TYPES ANALYZING IMPORTANCE

WHAT IS INVENTORY ? The raw materials, work-in-progress goods and

completely finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale stocked in order to meet an unexpected demand or distribution in the future.

Inventory represents one of the most important assets that most businesses possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company’s shareholders/owners.

In any business organization, all functions are interlinked and connected to each other and are often overlapping. Some key aspects like supply chain management, logistics and inventory form the backbone of the business delivery function. Therefore these functions are extremely important to marketing managers as well as finance controllers.

Inventory management is a very important function that determines the health of the supply chain as well as the impacts the financial health of the balance sheet.

From the above definition the following points stand out with reference to inventory—

•All organizations engaged in production or scale of products hold inventory in one form or other.

•Inventory can be in complete state or incomplete state.

•Inventory is held facilitate future consumption , sale or further processing /value addition.

•All inventoried resources have economic value and can be considered as assets of the organization.

TYPES OF INVENTORYINPUT PROCESS OUTPUTRaw materials Work in progress Finished GoodsConsumables required for processing. E.g. Fuel, stationary, bolts & nuts etc. required in manufacturing

Semi finished production in various stages, lying with various departments like production, WIP stores, final assembly, paint shop, packing, outbound Store etc.

Finished goods at distribution centers through out supply chain.

Maintenance items/consumables

Production waste and scrap

Finished Goods to transit

Packing materials Rejections and Defectives

Finished goods with stockiest and Dealers

Local purchased items required for production

Spare parts stocks & Bought out itemsDefectives, Rejects and Sales returnsRepaired stock and partsSales promotion & sample stocks

IMPORTANCE Ensure a continuous supply of raw materials and

supplies to facilitate uninterrupted production. Maintain sufficient finished goods for smooth

sales operation and efficient customer service. Reduce dependencies of one another and enable,

the organizations to schedule it’s operations independently of another.

It helps to reduce material handling costs. It helps to utilize people and equipment

reasonably. It facilitate product display and service to

customers.

THANK YOUUNDER GUIDENCE: DR. YASIR ARAFAT ELAHI SIR

PRESENTED BY: SHARAD SINGHSADAN

NOUMANI