What are the likely advantages of Ramly Burger of using the agents as its main distributor especially to large retailers?
In understanding marketing channels, it is important to know the reasons for the existence of channel structures. These structures typically called intermediaries because they stand between production on one side and consumption on the other. Intermediaries also known as an agent. Channels evolve through the need for specialized functions which can be performed more efficiently by agent. By breaking down a complex distribution task into smaller, simpler ones, and dividing them among agent who specialize in particular functions, there is likely to be greater efficiency in the overall distribution channel.
[pic] A distribution channel may be direct or indirect in nature. Obviously, Ramly Burger using the indirect distribution channels, on the other hand, used the services of agent to move products to end-users. There are many advantages of using the agent. By using an agent Ramly Burger will appoint them to be one of their distribution channels. For example, we take a look at Tesco. Ramly Burger will supply their entire product to Tesco like beef burger, chicken burger, French fries, hotdog, sausage Chile sauce, tomato sauce and many more. In one situation, during Hari Raya Aidilfitri, customer want to serve their guest with fried mee. They can get all the ingredient by only visit Tesco. The ingredient that customer want to buy including Ramly Chile sauce. They do not need to go to the Ramly Burger manufacturer but they can just buy it at Tesco. By then Ramly Burger can get the efficiency in market coverage. By having an intermediary, Ramly Burger can reduce the number of transactions that is needed.
As we know, customer is normally is an individual. When they buy the product they rarely buy in a bulk. For example, customer name Ali work as a clerk. In the night he will sell burger in the stall in front of his house. It is impossible for Ali to buy in a bulk for a beef and chicken burger because he was only known as retailer. He did not have a warehouse and a big fridge to keep the beef and chicken meat for a long time. When he buy it from the mall, the Ramly Burger beef and chicken meat are already being break into a small volume. Helping from the agent, they will break bulk and sell it the small quantities to the final customer. Manufacturer will not sell their product in a small quantity like agent do. The packaging into the small volume will add the packaging cost to the manufacturer. This job will be taken by the agents that act as distribution channel to the customer.
The small retailer.
By using the agent, Ramly Burger got advantage of selling in a bulk number in one transaction. They do not have to sell it to many retailers. They just need to sell it to the large retailer such as wholesaler and the agent will take their action to distribute to the small retailers. By then, Ramly Burger product can be sold in every corner of the country. Individual that open only a stall in the village can easily get the burger meat at the nearest mart. He did not have to go to the town to get the burger meat to operate his business. The housewives can also buy one or two packet of the Ramly Burger meat for their child in the supermarket like Tesco, Giant, Mydin and many more. They do not need to go to Ramly Burger factory to buy the burger meat for their kids and family.
Ramly Burger products.
When Ramly Burger sells the product to the wholesaler, they will buy it in a big amount. For only one transaction, Ramly Burger can make profit through one transaction. Ramly Burger can continuous produce their product without afraid to the obsolete problems. Their production can be keep at the storage and the stock will always be there whenever the agent ask for it. At the moment the agent makes an order, Ramly Burger will send it...