Question

Gem Inc. a clothing manufacturer, creates a new strategy to increase its customer base. Maya, a marketing student, observes that Gem engages in disintermediation, while Nate, her friend, believes that this observation is incorrect. Which of the following statements is likely to support Maya's observation?

Answer 1

Maya's observation that Gem Inc. engages in disintermediation is likely supported by the fact that disintermediation involves eliminating intermediaries in the distribution channel. Gem Inc. may be selling its clothing directly to customers, bypassing traditional retail stores. This can help Gem Inc. increase its customer base and have more control over its brand and pricing.

Step-by-step explanation:

Maya's observation that Gem Inc. engages in disintermediation is likely supported by the fact that disintermediation involves eliminating intermediaries in the distribution channel. In this case, Gem Inc. may be selling its clothing directly to customers, bypassing traditional retail stores. This strategy can help Gem Inc. increase its customer base and have more control over its brand and pricing.

For example, Gem Inc. could set up an online store where customers can purchase their clothing directly. By doing so, they eliminate the need for retailers to sell their products and can potentially reach a larger audience. This is in contrast to traditional distribution channels where manufacturers sell their products to wholesalers or retailers who then sell them to customers.

Therefore, Maya's observation that Gem Inc. engages in disintermediation is likely accurate and supported by the idea that Gem Inc. is finding new ways to reach customers directly.