Which Of The Following Is Not True Regarding Channels Of Distribution?

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

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

The retail supply chain does NOT include

manufactures
retailers
wholesalers
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

economic criteria
control criteria
adaptive criteria
accumulation criteria

Answer (Detailed Solution Below)

Option 4 : accumulation criteria

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

Explanation:

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.
After identifying the channels, the company must evaluate them againsteconomic, control, and adaptive criteria.

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

Distribution Channels MCQ Question 4:

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

place
production
distribution channel
price

Answer (Detailed Solution Below)

Option 3 : distribution channel

Adistribution 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.

Marketing: Distribution Channels (GCSE) | tutor2u

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 5:

Manufacturers of cars and motor cycles typically seek_______ distribution.

selective
intensive
exclusive
restrictive

Answer (Detailed Solution Below)

Option 3 : exclusive

Manufacturers of cars and motorcycles typically seek Exclusive distribution.

Exclusive distribution:

If a company wants to give abig region toone single distributor then it is known as an exclusive distribution strategy.
In some cases, a distributor might be appointed for a complete country.
There would be no one other than that distributor operating in that company.
Typicalexamplesare designer wear, major domestic appliances, and evenautomobiles.
By granting exclusive distribution rights, the manufacturer hopes to have control over the intermediaries' price, promotion, credit inventory, and service policies.
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.
TypicalFMCG andconsumer 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 6:

Disintermediation describes

The removal of intermediaries from the channel structure
The introduction of new manufacturers within the channel structure
The introduction of new intermediaries within the channel structure
2 and 3

Answer (Detailed Solution Below)

Option 1 : The removal of intermediaries from the channel structure

The correct answer is The removal of intermediaries from the channel structure

Key Points

Disintermediation is the process of cutting out one or more middlemen from a transaction, supply chain, or decision-making process.
In financial terms, disintermediation involves the removal of banks, brokers, or other third parties, allowing individuals to transact or invest directly.
Cryptocurrencies are disintermediating the financial sector and government from monetary transactions.
The usual reasons for disintermediation are to reduce costs or increase delivery speed.
It doesn't always work because it requires additional staffing and other resources to replace the services supplied by an intermediary.

Distribution Channels MCQ Question 7:

Under which of the following forms of distribution a company tries to distribute its product on a large scale, i.e. through as many outlet as available?

Intensive distribution
Selective distribution
Extensive distribution
None of the above

Answer (Detailed Solution Below)

Option 1 : Intensive distribution

In intensive distribution, a company tries to distribute its product on a large scale, i.e. through as many outlets as available.

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 strategies.
It is usually required where customers have arange 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 onlylimited outlets.
It also enables the firm to establish a good working relationship with channel members.
Selective distribution can help the manufacturergain optimum market coverage and more control but at a lesser cost than intensive distribution.

Exclusive distribution:

If a company wants to give abig region toone single distributor then it is known as an exclusive distribution strategy.
In some cases, a distributor might be appointed for a complete country.
There would be no one other than that distributor operating in that company.
Typicalexamplesare designer wear, major domestic appliances, and evenautomobiles.
By granting exclusive distribution rights, the manufacturer hopes to havecontrol over the intermediaries' price, promotion, credit inventory, and service policies.

Restrictive distribution:

The arrangements result fromagreements 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 8:

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

Statements (I) and (II) are correct but (III) is not correct
Statements (I) and (III) are correct but (II) is not correct
Statements (I) and (II) are not correct but (III) is correct.
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 9:

The retail supply chain does NOT include

manufactures
retailers
wholesalers
regulators

Answer (Detailed Solution Below)

Option 4 : regulators

Retail Supply Chain Management

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.

Distribution Channels MCQ Question 10:

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

economic criteria
control criteria
adaptive criteria
accumulation criteria

Answer (Detailed Solution Below)

Option 4 : accumulation criteria

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

Explanation:

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.
After identifying the channels, the company must evaluate them againsteconomic, control, and adaptive criteria.

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