Production can be defined as the creation of utility or the creation of goods and services for the purpose of satisfying human wants.It is the transformation of raw materials into finished goods and their distribution to the consumer in other to satisfy their wants.Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output). It is the act of creating output, a good or service which has value and contributes to the utility of individuals.Economic well-being is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human needs.
The degree to which the needs are satisfied is often accepted as a measure of economic well-being. In production there are two features which explain increasing economic well-being. They are improving quality-price-ratio of commodities and increasing incomes from growing and more efficient market production.One major thing about production is that it is not complete until it gets to the final consumers.Production is categorized into two major parts, which are:Direct and indirect productionDirect Production: This is when an entity is capable of producing all of the materials necessary for their product production by using their own skill sets without focusing on one product or requiring a staff to perform different jobs.
Indirect production is sub divided into three major groups, which are:1. Primary production2. Secondary production3. Tertiary productionProduction department is responsible for producing the product (form utility) then marketing comes to stage to make the product available to the consuming public through physical distribution (possession, place and time utility). One thing is to produce goods and quite another to make the goods available to the ultimate consumers.
It is known that production is not yet complete until the goods produced reaches the final consumers for production to get to the ultimate buyers the firm or producers engages the services of the middlemen. The middlemen helps in making goods available as at when needed and always. The middlemen make sure that the goods are delivered at the right time, place, condition, and at a comfortable price.In their bid (middlemen) to discharge this duties or function; have encountered many problems.There is the geographical or spatial gap.
This is caused by the distance between the producers and consumers; that is from the places of production to the places of consumptionThere is the places information separation gap. This problem arises because consumers do not automatically know about the existence of goods and the reason why they should buy it.There is the time separation: occurs because there is usually a time lag between the production of goods and the consumption of such goods. Under this time lag there is artificial scarcity. All this problems and gap must be bridged.In the Nigeria market, many producers do not sell their products directly to the final consumers, normally we see the consumers performing one task or the other.Busch and Houston propounded the gap theory. The gap theory is of the premise that marketing need not exist until a social economy reaches the point where the producers of economic goods are not the consumers of same.
This situation creates a separation a gap. Anyanwu (2000. 26). For this gap to be bridged there must be intermediaries or middlemen like the wholesales, retailers, merchant middlemen, Agent middlemen, commissioned and non commissioned agent etc.These people buy from the producers and resale or make it available to the consumers/users.
Marketing intermediaries (middlemen) are indispensable in the distribution of consumer goods and services.People may ask why marketing intermediaries are used, “Why do producers give the selling jobs to intermediaries? Why don’t they distribute these goods themselves?, because giving the rights to middlemen means giving up some control over how and whom the products are sold to. According to Kotler (1998:358) “The use of intermediaries results from their greater efficiency in making goods available to target markets, though their contacts, experience, specialization and scale of operation usually offer the form and consumers more than it can achieve on its own” but with a price.