(a) Describe five reasons why a manufacturer may brand his products.
(b) Outline five services rendered by the wholesaler to the manufacturer.
Explanation
(a) Reasons why a manufacturer may brand his product are:
(i) The producer may want to enjoy some monopoly.
(ii) It helps to differentiate similar goods.
(iii) To prevent adulteration of the branded goods.
(iv) Branding helps to project the image of the company
(v) Branding makes market segmentation easier because similar products may be developed to meet specific categories of users.
(vi) The importance of price differentials may diminish or reduce.
(vii) Self-selection is facilitated and this helps the customers in self-service stores.
(ix) Branding leads to a more ready acceptance of a product by wholesalers and retailers.
(b) Services rendered by the wholesaler to the manufacturer are:
(i) The wholesalers provide warehousing facilities to get rid of stockpiling at the production point.
(ii) The wholesalers purchase goods in bulk from the producer.
(iii) They provide information to the producer regarding the retailers’ and customers’ views about the product.
(iv) They finance production by making prompt and sometimes advance payments to the producer.
(v) The wholesalers sometimes brand and package goods from the producers before selling to the retailers.
(vi) The wholesalers often provide transport needed in distribution, by sending their vehicles to collect the goods from the manufacturers.
(vii) The wholesaler can give credit facilities to the manufacturer.
(viii) The wholesaler bears risk on behalf of the producer by taking over losses due to spoilage.
(ix) They help in carrying out such marketing functions as advertising, packaging and displaying of the products.