Predicted elimination of middlemen - Essay Example

Predicted Elimination of Middlemen Essentially business transactions are complicated processes that require several players to ensure successful completion. The players in the transactions are referred to as intermediaries (Hamm, 2004). Intermediaries can be defined as individuals or business entities, which specialize in carrying out a variety of marketing roles involved in buying and selling of goods as they are transferred from manufacturers to consumers (Hamm, 2004). They are various levels such as merchant intermediaries (retailers and wholesalers), agent intermediaries (brokers and commission agents), processors and manufacturers, speculative and facilitative organizations.

It is imperative to note that, intermediaries have fulfilled vital role in business enhancement (Hamm, 2004). It is notable that, the traditional functions or roles of intermediaries include selling goods and services to consumers through different conduits. For instance, wholesalers sell goods to retailers who in turn resell to the end users (Hamm, 2004). Similarly, intermediaries play a crucial role in providing information about new products to consumers. It is observable that the intermediaries facilitate business relationship between a buyer and a seller (Hamm, 2004).

Additionally, intermediaries seal the gap between the vendor and consumer in terms of knowledge, place, distance and even finances. They earn a tangible gain from this activity. It is note worthy to note that, intermediaries play a responsibility of taking risks on behalf of sellers. For instance, the speculative intermediaries are specialized risk takers (John, 2009). They make purchases, sales at the same marketing level (they do not have vertical integration), and they are interested in short-term price fluctuations (John, 2009).

On the other hand, facilitative intermediaries provide facilitation activities to other intermediaries in the marketing process. They stipulate rules that are followed by other participants (John, 2009). The place and time of purchasing of goods and services depends wholly on the existence or nonexistence of intermediaries. It is observable that, consumers will purchase goods from retailers and wholesalers when they are present (John, 2009). On the other hand, if the intermediaries are absent, the end users will be compelled to purchase goods directly from the producers.

This takes two dimensions, the producer avail the goods to consumers or consumers buy from either the producers’ premises or brick and mortar retailers (John, 2009). More over, it is significant to note that, in the absence of intermediaries, collection of information about potential and existing clients will take a different facet (John, 2009). Producers and manufacturers will be compelled to create a market niche directly or use advertisement to reach potential clients. Internet marketing is critical in this situation (John, 2009).

This is because it is faster and far-reaching. In the absence of intermediaries, the customers must embrace different and efficient ways of searching for information. It is significant to note that most customers will opt for internet sources for information on products and services. This is because; internet is readily available, convenient and detailed compared to advertisements. More over, the internet allows clients to make correspondences on pertinent questions on products they intend to purchase (John, 2009).

However, other ways of searching information about products include, trade shows, trade publications and establishment of close relations with the suppliers. Existence of intermediaries makes the marketing process convenient, eases shopping and searching of goods. In a situation where intermediaries are absent, it is imperative to note that, the producers and manufacturers will assume their role. For instance, direct selling to customers will be embraced. This trade does not allow a gap between the seller and buyer.

Additionally, it is notable that, manufacturers and producers might not carry out the intermediary’s role in a traditional way (John, 2009). Their role is appropriate if e- commerce is embraced. For instance, information dissemination to consumers is done through the internet. Similarly, the buyers can make orders online (John, 2009). In essence, it is tedious and expensive for manufacturers and producers to assume the roles of the intermediaries in the traditional way of transacting. It is vital to note that, utilization of intermediaries has taken a different direction due to the emergence of the e-commerce.

E- Commerce entirely depends on electronic transactions. It is notable that, most companies have focused on adapting their activities in retort to the new information technology (Joel, 1998). It is significant to underscore the fact that, companies have been able to build long-term interaction with clients and institute more proficient retention programs. The one-one perspective enabled by the net-based commerce offers numerous options of intensification customer retention (Joel, 1998). However, it is observable that, the traditional roles of intermediaries (brick and mortar) have evolved in the electronic business (e-commerce) (Hamm, 2004).

It is imperative to note that, the web discovery stage ensures entrepreneurs who might include online intermediaries (click and mortar) embrace the power of applying web technology in establishing the aspired market niche (Joel, 1998). An example of intermediary activity on e-commerce is the affiliate marketing. It is significant to note that, affiliate marketing is a brand advocacy oriented and two-way symmetrical communication between the company and its customers to a wholly new and more satisfying level (Hamm, 2004).

Essentially, affiliate marketing can be defined as internet based -selling in, which trade benefits one or more affiliate clients brought by the associate marketing (Hamm, 2004). For instance, take an example of a web hosting company such as myhosting.com. An intermediary affiliates a company with it and utilizes its functions to create more profit. In conclusion, the diverse nature of national and global business might not propel diminishing of brick and mortar retailers (Hamm, 2004). These traditional intermediaries remain fundamental in marketing (Hamm, 2004).

On the other hand, the online intermediaries (click and mortar retailers) play a significant role in the advancement of e-commerce (Hamm, 2004). Additionally, it is critical to note that information technology products occupy considerable niche in online marketing and advertisement gateways (Hamm, 2004). However, it is imperative to note that, relentless repositioning and utilization of new technology is fundamental to robust web business. It is notable that, the intermediary is far away from diminishing in business transactions.

References Hamm, S. (2004). “Software Shift”. Open resource developers look past Linux to database, e-mail, and search -- even desktop PCs. Business Week. New York. p.90. http://www.businessweek.com/magazine/content/04_19/b3882618.htm John. G, (2009). Middleman: A Broker’s Tale. Washington: IBJ Book Publishers. Joel. M (1998,) “The Power of Virtual Integration: An Interview with Dell Computer’s Michael Dell,” Harvard Business Week: New York. Review, pp. 73-84.