Unit 12: Distribution Decisions - Practice Quiz

1 What is retailing?

2 What is wholesaling?

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

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

5 Which retail format mainly sells groceries and household products?

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

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

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

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

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

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

12 A retailer uses sales promotions mainly to:

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

14 Online retailing involves selling products through:

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

16 Which activity is commonly performed by wholesalers?

17 Wholesalers help retailers by providing:

18 A merchant wholesaler usually:

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

20 Which development has significantly expanded retail access in India?

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?

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?

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?

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?

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?

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?

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?

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

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?

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?

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?

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?

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?

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

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

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?

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

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?

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?

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?

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?

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?

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?

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?

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?

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?

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?

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?

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?

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?

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

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?

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?

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?

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?

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?

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?

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?

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?

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?