Unit 12: Distribution Decisions - Practice Quiz

DEMKT503 — Marketing Management 60 Questions
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1 What is retailing?

Retailing and wholesaling Easy
A. Selling goods only to factories
B. Buying goods for government use
C. Transporting goods between countries
D. Selling goods to final consumers

2 What is wholesaling?

Retailing and wholesaling Easy
A. Producing goods for personal consumption
B. Selling goods in small quantities to households
C. Selling goods to final users
D. Selling goods mainly to retailers or business users

3 Which retail format offers a wide variety of products under one roof?

Types of retail formats Easy
A. Vending machine
B. Department store
C. Street stall
D. Specialty kiosk

4 A store that focuses on a narrow product line is called a:

Types of retail formats Easy
A. Supermarket
B. Convenience store
C. Department store
D. Specialty store

5 Which retail format mainly sells groceries and household products?

Types of retail formats Easy
A. Specialty store
B. Warehouse club
C. Supermarket
D. Factory outlet

6 The wheel of retailing theory suggests that new retailers often enter the market with:

Retail theories Easy
A. Large inventories and high operating costs
B. High prices and luxury services
C. Low prices and limited services
D. Fixed prices and premium locations

7 The retail life cycle describes the stages through which a retail format passes over time. Which is usually an early stage?

Retail theories Easy
A. Disappearance
B. Saturation
C. Decline
D. Introduction

8 According to the retail accordion theory, retailers may alternate between:

Retail theories Easy
A. Local and foreign ownership
B. Narrow and broad product assortments
C. Seasonal and permanent employment
D. Online and offline payment methods

9 Which retailing strategy involves selecting a specific group of customers to serve?

Retailing strategies Easy
A. Order processing
B. Inventory counting
C. Market targeting
D. Product packaging

10 A retailer's decision about where to open a store is known as a:

Retailing strategies Easy
A. Financing decision
B. Location decision
C. Packaging decision
D. Production decision

11 Which element of the retail mix refers to the goods and services offered by a retailer?

Retailing strategies Easy
A. Credit policy
B. Product assortment
C. Sales force size
D. Store location

12 A retailer uses sales promotions mainly to:

Retailing strategies Easy
A. Reduce product variety
B. Increase short-term purchases
C. Stop customer communication
D. Eliminate store operations

13 Which of the following is an example of non-store retailing?

Non-store retailing Easy
A. Department store selling
B. Supermarket selling
C. Shopping mall selling
D. Door-to-door selling

14 Online retailing involves selling products through:

Non-store retailing Easy
A. Wholesale warehouses only
B. Electronic networks
C. Physical street markets
D. Public auctions only

15 A vending machine is a form of non-store retailing because it:

Non-store retailing Easy
A. Sells products automatically
B. Sells only to wholesalers
C. Operates only inside department stores
D. Requires a large sales staff

16 Which activity is commonly performed by wholesalers?

Nature and importance of wholesaling Easy
A. Breaking bulk quantities
B. Manufacturing raw materials
C. Using products at home
D. Designing television advertisements

17 Wholesalers help retailers by providing:

Nature and importance of wholesaling Easy
A. Personal household consumption
B. Government employment services
C. Storage and inventory support
D. Product-use guarantees for every customer

18 A merchant wholesaler usually:

Types of wholesalers Easy
A. Owns the goods it sells
B. Sells only personal services
C. Works only as a transport agent
D. Produces every product it distributes

19 An agent or broker differs from a merchant wholesaler because the agent or broker generally:

Types of wholesalers Easy
A. Does not take ownership of goods
B. Sells only through vending machines
C. Manufactures all goods personally
D. Operates only as a final consumer

20 Which development has significantly expanded retail access in India?

Developments in retailing and wholesaling from the Indian perspective Easy
A. Reduction in internet use
B. Decline of mobile payments
C. Growth of e-commerce
D. Closure of organized retailers

21 A packaged-food producer sells cartons to an intermediary, who breaks the bulk and resells smaller quantities to neighborhood stores. Which distribution function is the intermediary primarily performing?

Retailing and wholesaling Medium
A. Bulk breaking
B. Retail franchising
C. Product manufacturing
D. Market positioning

22 A retailer offers groceries, clothing, household goods, and appliances under one roof, with separate departments and centralized management. Which retail format best describes it?

Types of retail formats Medium
A. Specialty store
B. Convenience store
C. Department store
D. Category killer

23 A retailer specializes in sports equipment, carries a very deep assortment, and uses its scale to offer competitive prices that smaller sports shops find difficult to match. Which format is this?

Types of retail formats Medium
A. Category killer
B. Supermarket
C. Department store
D. Convenience store

24 A residential-area shop remains open for long hours and stocks a limited range of frequently purchased products at slightly higher prices. Which retail format is most appropriate?

Types of retail formats Medium
A. Convenience store
B. Warehouse club
C. Specialty store
D. Hypermarket

25 A discount retailer enters the market with low prices, limited services, and basic premises. Over time, it adds premium displays, more services, and higher margins, creating space for a new low-cost competitor. Which theory explains this pattern?

Retail theories Medium
A. Retail life-cycle theory
B. Retail accordion
C. Wheel of retailing
D. Natural selection theory

26 A retail market shifts from general stores with broad assortments to specialized outlets and later returns to broad-assortment formats such as hypermarkets. Which retail theory best explains this movement?

Retail theories Medium
A. Retail life cycle
B. Wheel of retailing
C. Conflict theory
D. Retail accordion

27 A traditional retailer introduces digital payments, home delivery, and online ordering after customer preferences and technology change. Which retail theory most directly explains this adaptation?

Retail theories Medium
A. Natural selection theory
B. Wheel of retailing theory
C. Central place theory
D. Retail accordion theory

28 A fashion retailer targets young professionals, offers workwear at moderate prices, and locates stores near business districts. Which strategic concept integrates these decisions?

Retailing strategies Medium
A. Horizontal integration
B. Retail positioning
C. Reverse logistics
D. Intensive distribution

29 A supermarket uses milk and bread at very low margins to attract customers, expecting them to purchase other higher-margin products during the visit. Which pricing strategy is being used?

Retailing strategies Medium
A. Prestige pricing
B. Price skimming
C. Transfer pricing
D. Loss-leader pricing

30 A retailer allows customers to examine products in a store, order through a mobile app, and return purchases through either channel. Which strategy does this represent?

Retailing strategies Medium
A. Exclusive distribution
B. Wholesale integration
C. Single-channel retailing
D. Omnichannel retailing

31 A retailer analyzes loyalty-card data and sends different promotions to customers based on their previous purchases. What is the main strategic purpose of this practice?

Retailing strategies Medium
A. Merchandise standardization
B. Channel disintermediation
C. Customer relationship management
D. Warehouse consolidation

32 A cosmetics company demonstrates products during live online sessions, accepts orders immediately, and ships directly to buyers. Which non-store retailing method is most evident?

Non-store retailing Medium
A. Automatic vending
B. Online direct selling
C. Mail-order retailing
D. Telephone retailing

33 A company installs machines in metro stations that sell packaged snacks throughout the day with no sales employee present. Which benefit of this method is most significant?

Non-store retailing Medium
A. Continuous customer access
B. Extensive product assortment
C. High personal interaction
D. Flexible price negotiation

34 Why can wholesalers reduce transaction costs in a distribution channel containing many manufacturers and many small retailers?

Nature and importance of wholesaling Medium
A. They determine the final consumer demand
B. They standardize all manufacturers' prices
C. They eliminate the need for product storage
D. They consolidate exchanges between both groups

35 A wholesaler stores air conditioners during the winter and supplies retailers when summer demand rises. Which wholesaling function is illustrated?

Nature and importance of wholesaling Medium
A. Promotional positioning
B. Time utility creation
C. Ownership transfer
D. Product standardization

36 An intermediary takes legal ownership of household products, stores them in its warehouse, and resells them to retailers. How should this intermediary be classified?

Types of wholesalers Medium
A. Merchant wholesaler
B. Commission broker
C. Selling branch
D. Manufacturer's agent

37 A small retailer visits a wholesale outlet, pays immediately, selects goods, and transports them using its own vehicle. Which wholesaler type is involved?

Types of wholesalers Medium
A. Full-service wholesaler
B. Cash-and-carry wholesaler
C. Rack jobber
D. Drop shipper

38 A wholesaler sells coal in large quantities but never physically handles it. After receiving an order, the wholesaler arranges shipment directly from the producer to the buyer. What type of wholesaler is this?

Types of wholesalers Medium
A. Cash-and-carry wholesaler
B. Drop shipper
C. Rack jobber
D. Truck wholesaler

39 An Indian kirana store joins a digital platform that provides electronic ordering, inventory tracking, and rapid restocking from wholesalers. What is the most likely competitive benefit?

Developments in retailing and wholesaling from the Indian perspective Medium
A. Elimination of local demand
B. Guaranteed price leadership
C. Removal of all intermediaries
D. Improved stock availability

40 An Indian retailer uses neighborhood fulfillment centers to deliver a limited range of frequently purchased products within minutes. Which development does this model represent?

Developments in retailing and wholesaling from the Indian perspective Medium
A. Departmental retailing
B. Quick commerce
C. Catalogue retailing
D. Cash-and-carry trade

41 A packaged-food manufacturer sells through a distributor, a supermarket chain, and an online marketplace. The manufacturer wants maximum market coverage but also wants to preserve premium positioning. Which channel decision best resolves the conflict?

Retailing and wholesaling Hard
A. Use exclusive distribution through one national wholesaler
B. Use selective distribution with channel-specific assortments
C. Use intensive distribution for every outlet
D. Eliminate intermediaries and sell only through the manufacturer's website

42 A retailer offers groceries, apparel, home appliances, and financial services in one large location, uses centralized buying, and organizes merchandise into separate departments. Which format is most accurately identified?

Types of retail formats Hard
A. Department store
B. Supermarket
C. Convenience store
D. Category killer

43 A discount retailer begins with low prices, attracts price-sensitive shoppers, adds better displays and services, and eventually faces a new low-price entrant. Which retail theory most directly explains this cycle?

Retail theories Hard
A. Retail accordion theory
B. Natural selection theory
C. Wheel of retailing
D. Conflict theory

44 A retail group alternates between broad-format stores carrying many product categories and specialized stores carrying narrow assortments. Which theory best captures this movement in assortment breadth?

Retail theories Hard
A. Retail life-cycle theory
B. Retail accordion theory
C. Gravity model
D. Wheel of retailing

45 A retailer has high store traffic but declining profitability. Analysis shows that customers visit stores to evaluate products and then buy cheaper versions online. Which strategic response is most appropriate?

Retailing strategies Hard
A. Match every online price permanently
B. Increase store size and display density
C. Reduce product information available in stores
D. Integrate stores with services and omnichannel fulfillment

46 A retailer has limited capital and must choose between expanding into a distant high-income market or deepening presence in an underserved nearby market. Which analysis should receive the greatest weight in the decision?

Retailing strategies Hard
A. Population size multiplied by average income
B. Absolute market size alone
C. Expected return adjusted for capital and execution risk
D. Competitor count without profitability data

47 An online retailer offers a very wide assortment but holds little inventory, relying on third-party sellers who ship directly to customers. Which risk is most likely to increase under this model?

Non-store retailing Hard
A. Lower assortment breadth
B. Inconsistent service and product quality
C. Reduced dependence on seller performance
D. Higher ownership of physical stores

48 A direct-to-consumer brand acquires customers through social commerce, uses personalized recommendations, and earns repeat purchases through subscriptions. Which metric combination best tests whether the model is economically sustainable?

Non-store retailing Hard
A. Number of posts, likes, and influencer mentions
B. Average order value, gross margin, and customer lifetime value
C. Impressions, followers, and website visits
D. Store count, shelf space, and retail rent

49 A wholesaler breaks bulk, stores seasonal inventory, extends credit, and consolidates products from several manufacturers for small retailers. Which statement best describes the wholesaler's economic role?

Nature and importance of wholesaling Hard
A. It replaces all retail functions
B. It performs only physical distribution
C. It reduces transactional and inventory burdens for channel members
D. It eliminates the need for manufacturer forecasting

50 A manufacturer considers bypassing wholesalers to improve its gross margin. However, it would then need to serve thousands of small retailers and finance fragmented deliveries. Which conclusion is most defensible?

Nature and importance of wholesaling Hard
A. Direct distribution is preferable whenever order volume increases
B. The wholesaler's margin should be compared with avoidable and newly created channel costs
C. Wholesalers add no value when manufacturers have strong brands
D. Disintermediation always lowers total distribution cost

51 A wholesaler sells merchandise, provides delivery, extends credit, and takes title to the goods. Which classification is most appropriate?

Types of wholesalers Hard
A. Full-service merchant wholesaler
B. Agent or broker
C. Manufacturers' sales branch
D. Commission merchant

52 A wholesaler negotiates sales between manufacturers and retailers, never takes title to the products, and earns a commission from the seller. Which intermediary is this?

Types of wholesalers Hard
A. Cash-and-carry wholesaler
B. Agent or broker
C. Merchant wholesaler
D. Specialty distributor

53 A small retailer buys limited quantities, pays immediately, collects the goods from the wholesaler's warehouse, and receives no delivery or credit. Which wholesaler format best fits this arrangement?

Types of wholesalers Hard
A. Drop shipper
B. Rack jobber
C. Cash-and-carry wholesaler
D. Truck wholesaler

54 A retailer concentrates on one product category, carries deep assortment and expert advice, and gains bargaining power through category scale. Which format is most likely?

Types of retail formats Hard
A. Department store
B. Category killer
C. Superstore
D. Convenience store

55 A retailer uses one customer database, allows online ordering with store pickup, accepts returns through any channel, and displays real-time inventory across channels. What strategic capability is being demonstrated?

Retailing strategies Hard
A. Vertical disintegration
B. Multichannel separation
C. Exclusive distribution
D. Omnichannel integration

56 An Indian kirana store joins a digital network that provides shared logistics, electronic procurement, and online ordering while allowing the store to retain its local customer relationships. Which development does this best represent?

Developments in retailing and wholesaling from the Indian perspective Hard
A. Complete replacement of traditional retail
B. Digitally enabled modernization of traditional retail
C. Return to unorganized wholesale exchange
D. Exclusive reliance on foreign-owned hypermarkets

57 A retailer serving Indian consumers designs separate assortments for metropolitan stores, tier-two cities, and rural markets rather than applying one national planogram. What is the strongest strategic rationale?

Developments in retailing and wholesaling from the Indian perspective Hard
A. National assortments always create higher stockouts
B. Local adaptation eliminates the value of centralized purchasing
C. Regional variation affects income, preferences, logistics, and retail access
D. Indian markets are uniform in demand and infrastructure

58 An Indian consumer-goods company wants rapid rural penetration but faces fragmented demand and high last-mile costs. Which channel design is most likely to balance reach and control?

Developments in retailing and wholesaling from the Indian perspective Hard
A. Sell only through a centralized national website
B. Combine rural distributors, local retailers, and digital ordering support
C. Remove intermediaries and require bulk consumer orders
D. Use only large urban supermarkets

59 A quick-commerce platform expands in an Indian city by placing micro-fulfillment centers near dense neighborhoods. Its customer promise is fast delivery, but its cost per order rises in low-density areas. Which expansion rule is most defensible?

Developments in retailing and wholesaling from the Indian perspective Hard
A. Expand uniformly across all geographic areas
B. Prioritize zones where order density can support fulfillment economics
C. Use the same inventory mix in every neighborhood
D. Maximize delivery radius before measuring contribution

60 A large Indian retailer introduces private labels in a category dominated by national brands. Which outcome is most likely if the retailer has strong store traffic and reliable shopper data?

Developments in retailing and wholesaling from the Indian perspective Hard
A. Automatic elimination of inventory risk
B. Higher differentiation and potentially better margins
C. Guaranteed acceptance regardless of product quality
D. Lower bargaining power with all suppliers