Course Name: Sales and Distribution Management

Assignment- Week 8
TYPE OF QUESTION: MCQ/MSQ
Number of questions: 10 Total marks: 10 X 1 = 10
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QUESTION 1:
Reducing the 'distance' between the producer and his product on the one hand, and the
customers on the other, relates to the concept of ___________________ discrepancy.
a. Spatial
b. Temporal
c. Distribution
d. None of these
Correct Answer: a
Spatial

Detailed solution:
Spatial discrepancy relates to the physical distance between a product’s place of manufacture
and the place of consumption. Distribution channels overcome the barrier of distance between
the company and the customers. They arrange to carry products from manufacturing units to
places near to customers. This is important as customers are geographically scattered, and must
be reached with the least cost.
See Session: Week VIII Lecture I
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QUESTION 2:
Payments and returns constitute ___________ flows.
a. Reverse
b. Backward
c. Circular
d. None of these
Correct Answer: b
Backward

Detailed solution:
Channel flows may be forward, backward, reverse and both ways. When flows are from
customers to the company, they constitute a backward flow or a reverse flow.
● Backward flow: like payments, returns, ordering etc.
● Reverse flow: like refilling, refurbishing, recycling etc.
See Session: Week VIII Lecture I
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QUESTION 3:
Which of the following DOES NOT fall under the purview of the classification of a distribution
channel?
a. Sales channel
b. Communication channel
c. Delivery channel
d. Service channel
Correct Answer: b
Communication channel

Detailed solution:
Distribution channels are categorized as - sales channel, delivery channel and service channel. A
communication channel is not a part of the classification.
See Session: Week VIII Lecture I
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QUESTION 4:
When goods flow straight from the company to the customer, the channel is known as a
________________ channel.
a. Direct
b. Zero level
c. Either of these
d. None of these
Correct Answer: c
Either of these

Detailed solution:
When goods are sold directly from the manufacturer to the consumers, the channel is known as
a direct channel or a zero-level channel. There is no intermediary between the manufacturer
and the customers, and the products are sold directly to the customer. This can be done via
selling online, direct marketing or direct selling.
See Session: Week VIII Lecture II
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QUESTION 5:
Patterns of distribution determine the intensity with which a company wants to reach out to its
customers. Which of the following IS NOT a pattern of distribution?
a. Holistic distribution
b. Intensive distribution
c. Selective distribution
d. Exclusive distribution
Correct Answer: a
Holistic distribution

Detailed solution:
Patterns of distribution determine the intensity with which a company wants to reach out to its
customers. The distribution intensity of the company can be classified as: Intensive distribution,
Selective distribution and Exclusive distribution. There is nothing called Holistic distribution.
See Session: Week VIII Lecture II
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QUESTION 6:
Which of the following factors affect decisions pertaining to channel design?
a. Product assortment and nature of the product
b. Width and depth of the market
c. Customer service levels
d. All of these
Correct Answer: d
All of these

Detailed solution:
The various factors affecting decisions regarding channel design are product assortment and
nature of the product, width and depth of the market, long-term commitments to channel
partners, customer service levels, affordability, and channel control requirements of the
company and its products.
See Session: Week VIII Lecture III
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QUESTION 7:
State whether the following is True or False.
Domain conflicts pertain to roles and responsibilities, and authority relationships between
channel members.
a. True
b. False
Correct Answer: a
True

Detailed solution:
Channel conflict denotes a situation of disagreement between channel partners. The conflict
types may be categorized as - goal conflict (pertaining to objectives), domain conflict (pertaining
to roles and responsibilities, and authority relationships) and perception conflict (pertaining to
individual assessment of the market trends, competitor strategies, and other environmental
occurrences).
See Session: Week VIII Lecture IV
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QUESTION 8:
State whether the following is True or False.
A good logistics strategy aims only at cost reduction.
a. True
b. False
Correct Answer: b
False

Detailed solution:
A good logistics strategy aims at cost reduction and capital reduction (i.e. minimizing investment
in logistic systems and operations).
See Session: Week VIII Lecture IV

QUESTION 9:
______________ helps marketers enter foreign markets with a low-cost-minimum risk strategy.
a. Direct exporting
b. Indirect exporting
c. Licensing
d. None of these
Correct Answer: a
Direct exporting

Detailed solution:
Direct exporting helps marketers enter foreign markets with a low-cost-minimum risk strategy.
In the case of direct exporting, the company directly supplies the products to its customers in
the foreign country. It is also a price-sensitive strategy as customers would always buy from
those who sell at the minimum price.
See Session: Week VIII Lecture V

QUESTION 10:
L/C stands for ________________.
a. Letter of credit
b. Letter for commercial invoice
c. Letter for customer
d. Letter for consignment
Correct Answer: a
Letter of credit
Detailed solution:
Letter of credit as a document conveys the bank guarantee that a buyer’s payment to the seller
will be made for the correct amount at the right time, and that there shall be no delay as
regards the payment for the goods procured. In case the buyer is unable to make part or full
payment, then the bank would have to cover the full or remaining amount that has not been
paid. The document assures the sellers of the payment risk.
See Session: Week VIII Lecture V

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