Which of the following problems do intermediaries attempt to solve within the distribution channel

Latest Distribution Channels MCQ Objective Questions

Distribution Channels MCQ Question 1:

Match List I with List II:

Choose the correct answer from the options given below:

1. (A) - (IV), (B) - (I), (C) - (III), (D) - (II)
2. (A) - (II), (B) - (IV), (C) - (I), (D) - (III)
3. (A) - (I), (B) - (III), (C) - (IV), (D) - (II)
4. (A) - (III), (B) - (II), (C) - (IV), (D) - (I)

Answer (Detailed Solution Below)

Option 2 : (A) - (II), (B) - (IV), (C) - (I), (D) - (III)

The correct answer is (A) - (II), (B) - (IV), (C) - (I), (D) - (III)

Constructive delivery: Even when there is no change in the possession or custody of the items, the transfer of the commodities is still permitted. A case of a constructive delivery would be one made through acknowledgement or attornment. It is a positive delivery if you agree to pick up a package for your friend and keep it for him.

Symbolic delivery: Delivery that acts as a symbol for the transfer of another item is referred to as a symbolic delivery. For instance, a symbolic delivery will occur when the buyer receives the key to the godowns containing the products.

Delivery: Voluntary transfer of possession of goods from seller to buyer is called delivery.

Distribution Channels MCQ Question 2:

Environmental characteristics/factors influencing distribution decisions are

(A) Government policy

(B) State of economy

(C) Social activistism

(D) Technological and infrastructure developments

(E) Statutory provisions

Choose the most appropriate answer from the options given below:

1. (A), (D) only
2. (B), (C), (E) only
3. (A), (C), (D) only
4. (A), (B), (D), (E) only

Answer (Detailed Solution Below)

Option 4 : (A), (B), (D), (E) only

The correct answer is (A), (B), (D), (E) only

Distribution Channel:

• Distribution channel is the path a good or service takes from the point of production or manufacture to the final consumer or buyer.
• A producer, a wholesaler, a retailer, and the final customer make up the majority of distribution routes.
• A distribution channel can also show how money moves back and forth from the producer or initial point of sale to the consumers.

• Factors related to market such as customer, competition
• Product factor such as nature of the product, technical factor
• Government Policy
•  State of the Economy
• Technological and Infrastructural Development

Distribution Channels MCQ Question 3:

Which of the following is not true for supply chain mangement approach?

1. Joint reduction in channel inventories
2. Large breadth of supplier base to increase competition and spread risk
3. Risks and rewards are shared over long term
4. Companies use intermodal transportation to reach to their markets

Answer (Detailed Solution Below)

Option 2 : Large breadth of supplier base to increase competition and spread risk

The untrue statement is "Large breadth of supplier base to increase competition and spread risk"

Supply Chain Management:

• The management of the movement of goods and services is referred to as supply chain management, and it encompasses all procedures that transform raw materials into finished items.
• It includes actively simplifying a company's supply-side processes in order to increase customer value and achieve a competitive advantage in the market.

• From the raw product to the end product to the consumer, a company builds a network of suppliers that move the product from the raw material suppliers to the organizations that deal directly with the users.
• It is the sharing of risk and returns in the long run, different transports are used by the companies to reach the market.

From the above options, option (b) is not correct, as competition and risk aversion to suppliers does not increase.

Distribution Channels MCQ Question 4:

Which of the following is not true while determining length of distribution channel?

1. The larger the market size, the longer the channel.
2. If the average lot size is large, it is better to have a longer channel.
3. If the product and the market require a high level of service, it is advisable to keep a shorter channel.
4. If customers shop for an assortment of products, it demands for a wider channel of distribution.

Answer (Detailed Solution Below)

Option 2 : If the average lot size is large, it is better to have a longer channel.

The incorrect option is "If the average lot size is large, it is better to have a longer channel."

• A distribution channel is a network of businesses or intermediaries through which a good or service is purchased by the final buyer.
• Wholesalers, retailers, distributors, and the Internet are all examples of distribution channels.
• When the manufacturer sells directly to the consumer it is called a direct distribution channel.

1. Size of the market: The larger the market size, the longer the channel. Conversely, the smaller the market the smaller the channel. Hence, option 1 is correct.
2. Order lot size: If the order lot size is small, it is better to have a longer channel and vice-versa. Hence, option 2 is incorrect
3. Service Requirements: If the product and market require a high level of service, and it is a major factor in buying decisions, it is better to keep a shorter channel. Hence, option 3 is correct.
4. Product variety: If a wide assortment of same type of product is available in the market, then it is advisable to select a wider channel. Hence, option 4 is correct.

Distribution Channels MCQ Question 5:

The retail supply chain does NOT include

1. manufactures
2. retailers
3. wholesalers
4. regulators
5. None of These

Answer (Detailed Solution Below)

Option 4 : regulators

The incorrect option is regulators

Retail Supply Chain Management

All the processes that you utilize to ensure your products reach the customers, starting from obtaining the raw materials, managing inbound materials & production processes to last-mile delivery of those products at your customer’s doorstep, are together known as a retail supply chain.

Players in the supply chain

The primary members of the simple, basic supply chain as follows;

• Supplier
• Manufacturer
• Distributor
• Retailer
• Customer

Each of them manages its activities adding value to the creation of a product. The above figure unlocks a basic understanding of the supply chain.

Therefore, from the above explanation, The retail supply chain does NOT include regulators.

Top Distribution Channels MCQ Objective Questions

Match List I with List II:

Choose the correct answer from the options given below:

1. (A) - (IV), (B) - (I), (C) - (III), (D) - (II)
2. (A) - (II), (B) - (IV), (C) - (I), (D) - (III)
3. (A) - (I), (B) - (III), (C) - (IV), (D) - (II)
4. (A) - (III), (B) - (II), (C) - (IV), (D) - (I)

Answer (Detailed Solution Below)

Option 2 : (A) - (II), (B) - (IV), (C) - (I), (D) - (III)

The correct answer is (A) - (II), (B) - (IV), (C) - (I), (D) - (III)

Constructive delivery: Even when there is no change in the possession or custody of the items, the transfer of the commodities is still permitted. A case of a constructive delivery would be one made through acknowledgement or attornment. It is a positive delivery if you agree to pick up a package for your friend and keep it for him.

Symbolic delivery: Delivery that acts as a symbol for the transfer of another item is referred to as a symbolic delivery. For instance, a symbolic delivery will occur when the buyer receives the key to the godowns containing the products.

Delivery: Voluntary transfer of possession of goods from seller to buyer is called delivery.

Environmental characteristics/factors influencing distribution decisions are

(A) Government policy

(B) State of economy

(C) Social activistism

(D) Technological and infrastructure developments

(E) Statutory provisions

Choose the most appropriate answer from the options given below:

1. (A), (D) only
2. (B), (C), (E) only
3. (A), (C), (D) only
4. (A), (B), (D), (E) only

Answer (Detailed Solution Below)

Option 4 : (A), (B), (D), (E) only

The correct answer is (A), (B), (D), (E) only

Distribution Channel:

• Distribution channel is the path a good or service takes from the point of production or manufacture to the final consumer or buyer.
• A producer, a wholesaler, a retailer, and the final customer make up the majority of distribution routes.
• A distribution channel can also show how money moves back and forth from the producer or initial point of sale to the consumers.

• Factors related to market such as customer, competition
• Product factor such as nature of the product, technical factor
• Government Policy
•  State of the Economy
• Technological and Infrastructural Development

Which of the following is not true for supply chain mangement approach?

1. Joint reduction in channel inventories
2. Large breadth of supplier base to increase competition and spread risk
3. Risks and rewards are shared over long term
4. Companies use intermodal transportation to reach to their markets

Answer (Detailed Solution Below)

Option 2 : Large breadth of supplier base to increase competition and spread risk

The untrue statement is "Large breadth of supplier base to increase competition and spread risk"

Supply Chain Management:

• The management of the movement of goods and services is referred to as supply chain management, and it encompasses all procedures that transform raw materials into finished items.
• It includes actively simplifying a company's supply-side processes in order to increase customer value and achieve a competitive advantage in the market.

• From the raw product to the end product to the consumer, a company builds a network of suppliers that move the product from the raw material suppliers to the organizations that deal directly with the users.
• It is the sharing of risk and returns in the long run, different transports are used by the companies to reach the market.

From the above options, option (b) is not correct, as competition and risk aversion to suppliers does not increase.

Which of the following is not true while determining length of distribution channel?

1. The larger the market size, the longer the channel.
2. If the average lot size is large, it is better to have a longer channel.
3. If the product and the market require a high level of service, it is advisable to keep a shorter channel.
4. If customers shop for an assortment of products, it demands for a wider channel of distribution.

Answer (Detailed Solution Below)

Option 2 : If the average lot size is large, it is better to have a longer channel.

The incorrect option is "If the average lot size is large, it is better to have a longer channel."

• A distribution channel is a network of businesses or intermediaries through which a good or service is purchased by the final buyer.
• Wholesalers, retailers, distributors, and the Internet are all examples of distribution channels.
• When the manufacturer sells directly to the consumer it is called a direct distribution channel.

1. Size of the market: The larger the market size, the longer the channel. Conversely, the smaller the market the smaller the channel. Hence, option 1 is correct.
2. Order lot size: If the order lot size is small, it is better to have a longer channel and vice-versa. Hence, option 2 is incorrect
3. Service Requirements: If the product and market require a high level of service, and it is a major factor in buying decisions, it is better to keep a shorter channel. Hence, option 3 is correct.
4. Product variety: If a wide assortment of same type of product is available in the market, then it is advisable to select a wider channel. Hence, option 4 is correct.

The retail supply chain does NOT include

1. manufactures
2. retailers
3. wholesalers
4. regulators

Answer (Detailed Solution Below)

Option 4 : regulators

Retail Supply Chain Management

All the processes that you utilize to ensure your products reach the customers, starting from obtaining the raw materials, managing inbound materials & production processes to last-mile delivery of those products at your customer’s doorstep, are together known as a retail supply chain.

Players in the supply chain

The primary members of the simple, basic supply chain as follows;

• Supplier
• Manufacturer
• Distributor
• Retailer
• Customer

Each of them manages its activities adding value to the creation of a product. The above figure unlocks a basic understanding of the supply chain.

Therefore, from the above explanation, The retail supply chain does NOT include regulators.

The channel alternative is NOT to be assessed on the basis of

1. economic criteria
2. control criteria
3. adaptive criteria
4. accumulation criteria

Answer (Detailed Solution Below)

Option 4 : accumulation criteria

The channel alternative is NOT to be assessed on the basis of accumulation criteria.

Explanation:

1. A firm must identify the types of channel members available to carry out its channel work in terms of types of intermediaries, number of intermediaries, and responsibility of each.
2. After identifying the channels, the company must evaluate them against economic, control, and adaptive criteria.

1. Using economic criteria, a company compares the likely sales, costs, and profitability of each alternative.
2. Control issues mean giving some control of the marketing of a product to the intermediary. The company must retain as much control as possible.
3. Channels often involve long-term commitment; hence companies must consider the ability of a channel to adapt to environmental changes.

Statement (I) : Designing a distribution system for a service (for-profit or non-business context) involves to select the parties only through which ownership will pass.

Statement (II) : The ownership channel for most of the services is long and quite complex because of inseparability characteristic.

Statement (III) : Short channels usually mean more control on the part of the seller. 

Identify the correct code of being the statements correct or incorrect. These statements relate to channel strategies of products/services

1. Statements (I) and (II) are correct but (III) is not correct
2. Statements (I) and (III) are correct but (II) is not correct
3. Statements (I) and (II) are not correct but (III) is correct.
4. Statements (I), (II) and (III) all are not correct.

Answer (Detailed Solution Below)

Option 3 : Statements (I) and (II) are not correct but (III) is correct.

Distribution channel for a service:

• A distribution channel is a path through which the goods or services move from the company to the customer or the transfer of payment takes place from the customer to the company.  
• Distribution channel refers to the selling of products or services directly or through different intermediaries like wholesalers, retailers, etc.
• The same applies for payment transfer from the customer to the company i.e. it can be paid directly or through those intermediaries.
• Designing a distribution system for a service (for-profit or non-business context) involves selecting the parties not only through which ownership will pass but also making sure that the quality of services which is being transferred remains constant throughout the channel of distribution until it reaches the final consumer.
• The ownership channel for most of the services is short and not complex because of the inseparable characteristic. 
• Long channels in the distribution channel of service might result in a decrease in the value-added to the customer. 
• Short channels provide more control on the part of sellers as they can provide special services with immediate responses as there is direct contact between the seller and the customer in short channels.

Therefore, from the above explanation it is clear that Statements (I) and (II) are not correct but (III) is correct. 

Distribution Channels MCQ Question 13:

Manufacturers of cars and motor cycles typically seek_______ distribution. 

1. selective
2. intensive
3. exclusive
4. restrictive

Answer (Detailed Solution Below)

Option 3 : exclusive

Manufacturers of cars and motorcycles typically seek Exclusive distribution.

Exclusive distribution:

1. If a company wants to give a big region to one single distributor then it is known as an exclusive distribution strategy.
2. In some cases, a distributor might be appointed for a complete country.
3. There would be no one other than that distributor operating in that company.
4. Typical examples are designer wear, major domestic appliances, and even automobiles.
5. By granting exclusive distribution rights, the manufacturer hopes to have control over the intermediaries' price, promotion, credit inventory, and service policies.
6. The firm also hopes to get the benefit of aggressive selling by such outlets.

Intensive distribution:

• Intensive distribution tries to cover as much of the market as it can.
• Typical FMCG and consumer durable products are the best examples of intensive distribution strategy.
• It is usually required where customers have a range of acceptable brands to choose from.
• In other words, if one brand is not available, a customer will simply choose another.

Selective distribution:

• An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus on them.
• These companies are likely to have only limited outlets.
• It also enables the firm to establish a good working relationship with channel members.
• Selective distribution can help the manufacturer gain optimum market coverage and more control but at a lesser cost than intensive distribution.

Restrictive distribution:

• The arrangements result from agreements between suppliers and reseller-buyers of merchandise in which one of the parties or both of them accept limitations on the scope of managerial discretion with respect to certain marketing practices, such as the selection of sales territories, customers, products, or prices.
• Restrictive arrangements differ greatly in form and substance and in the particular marketing contexts in which they are applied. 

Distribution Channels MCQ Question 14:

A ________ represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. 

1. place
2. production
3. distribution channel
4. price

Answer (Detailed Solution Below)

Option 3 : distribution channel

A distribution channel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. 

• A distribution channel, in simple terms, is the flow that a good or service follows from production or manufacturing to the final consumer/buyer.
• Distribution channels vary but typically include a producer, a wholesaler, a retailer, and the end buyer/consumer.

• A distribution channel can also provide a sense of how money flows back from the buyers to the producer or original point of sale.
• For manufacturers, it is very important to create a mix of distribution channels that allow for ease of availability for the consumer, i.e., a good marketing mix.
• Based on the diversity and scope of a manufacturing business or any other business that can be found in the distribution process, the respective business needs to settle on a channel or channels that allow for good sales generation and ease of access for consumers.
• For instance, a manufacturer of light bulbs may produce the light bulbs, but the distribution channel that takes them from factory to customer is likely to include wholesalers and retailers. These links in the sales chain are the light bulbs’ channel of distribution.

Distribution Channels MCQ Question 15:

The retail supply chain does NOT include

1. manufactures
2. retailers
3. wholesalers
4. regulators
5. None of These

Answer (Detailed Solution Below)

Option 4 : regulators

The incorrect option is regulators

Retail Supply Chain Management

All the processes that you utilize to ensure your products reach the customers, starting from obtaining the raw materials, managing inbound materials & production processes to last-mile delivery of those products at your customer’s doorstep, are together known as a retail supply chain.

Players in the supply chain

The primary members of the simple, basic supply chain as follows;

• Supplier
• Manufacturer
• Distributor
• Retailer
• Customer

Each of them manages its activities adding value to the creation of a product. The above figure unlocks a basic understanding of the supply chain.

Therefore, from the above explanation, The retail supply chain does NOT include regulators.

What role does intermediaries play in the distribution of products?

What are the essential functions that are performed by channel intermediaries?

What is intermediary distribution?

Which of the following statements about marketing intermediaries is true quizlet?