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UNIVERSITY OF DAR ES SALAAM

FACULTY OF COMMERCE AND MANAGEMENT

BACHELOR OF COMMERCE

MK 200: PRINCIPLES OF MARKETING ASSIGNMENT.
NAME: KILINDU, SILVANUS.
REG. NO: 2007-04-04657.
DEPARTMENT: ACCOUNTING.

QUESTION:
What are the potential hazards a company might face by relying too heavily on distributors,
retailers or other intermediaries for marketing intelligence?

Marketing intelligence is the everyday information about developments in the marketing
environment which helps the managers to prepare and adjust marketing plans. Marketing
intelligence helps to determine the intelligence needed and collects it by searching the environment
and delivers it to the marketing managers who are interested to it 1. In other words, marketing
intelligence consists of set of procedures and sources by which the executives obtain the everyday
information about the pertinent developments in the marketing environment.

Marketing intelligence, through marketing intelligence system, comes from many sources
including company’s personnel such as executives, purchasing agents, sales force, engineers and
scientist; Market intermediaries; and other rivalry, competitive companies or producers.

Marketing intermediaries forms part of the production process which helps companies,
manufacturers and sole traders in promoting, selling, distributing and providing goods and/or
services to the buyers. In other words, intermediaries act as a middleman between a Buyer and a
Seller. Marketing intermediaries includes Agents, Wholesalers, Retailers, suppliers and others. The
information provided by intermediaries includes highly demanded products, customer satisfaction on
certain products, development of new products which consumers prefer, products developed by
competitors and other valuable information which helps in marketing intelligence.

Some producers and providers of goods and services respectively rely much on the
information obtained from market intermediaries in making various decisions pertaining marketing.
This may lead the following problems to the company or manufacture:-

Wrong or invalid information. Marketing intermediaries may sometimes provide information
to the company so as to benefit the incentives provided to them for providing such service without
measuring the validity of the information to be useful by the company. Due to this the company may
rush to make a wrong decision from false information hence jeopardize its existence in the
competitive market.

Out-of-date information. Any information to be useful must be available at the right moment
it is needed. Intermediaries may provide very true information pertaining a certain market product
but usefulness of the information becomes minimal if time is not taken into account. Market
intermediaries may not know the information they had is need at a required moment by the
company.

Information overload. If the company happen to receive information from all of its
middlemen, which in fact will be providing various information, the marketing research system will
be overcrowded with information and as we all know too much of anything is harmful. As a result, it
will be spending much of its resources to process too much information which for sure it doesn’t
know yet either it is useful or not. And spending money on anything not useful for the company is a
bad investment.

Over utilization of resources. Over reliance on marketing intermediaries means spending
money in financing the middlemen to provide information on marketing. This may sometimes lead to

1
Philip Kotler, Gary Armstrong, John Saunders, Veronica Wong; Principles of Marketing; 2 nd
European Edition (1996). Page no 318-319.

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bankruptcy especially if there are a huge number of middlemen providing information to the
company especially if the company spend a lot of its resources to finance research on intelligence
provided by middlemen. A good example happened in Palm Oil Processing and Distribution Company
Limited in Nigeria. After making huge investment in market research throughout all Africa, the
company experienced a crisis.

Information filtering. Sometimes a chain of distribution happens to be too long such that by
the time the information reaches the marketing research department, it has slightly if not completely
changes. As a result, the company uses the same information to make big decisions which later on
leads to a lot of fouls and regrets. This not on leads to filtering of the information, bit also delay in
information because the same information may have to pass from consumer through middlemen to
reach the producer.

Leakage of confidential information. This happens, in most cases, when different competitors
use the same market intermediaries for obtaining information on marketing. Most middlemen supply
different products from different companies and they may, intentionally or not, give information to
another rivalry company about your company and this may put you in a dangerous position of
gaining a competitive advantage.

But am not saying that companies shouldn’t use marketing intermediaries for intelligence but
should use different sources to obtain formation about marketing. And good information is the one
coming for different sources telling about the same thing. And this in new era of science and
technology, the development of IT and ICT gathering of information has been enhanced. So
companies should make use of it for intelligence rather than “depending on old fashion ways”.

Therefore, companies should also make use of other ways of intelligence like hiring people
who will go direct to the market and gathering information they need rather than waiting for the
middlemen to provide the same information. It costs less and save a lot of time.

REFERENCE:
1. Philip Kotler, Gary Armstrong, John Saunders, Veronica Wong; Principles of Marketing; 2 nd
European Edition (1996).

2. Mbura, O.K, Manual on Practical Marketing in Tanzania (2003).

3. www.markintel.com/

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