PCM PCM Distribution & Channel Management 1 — Questions and Answers
Question 1: A distribution channel is best defined as:
- A company's internal sales force structure
- The set of intermediaries through which a product moves from producer to end consumer (Correct answer)
- The logistics software used to track shipments
- The social media platforms used to promote a product
Correct answer: The set of intermediaries through which a product moves from producer to end consumer
A distribution channel encompasses all the people and organizations involved in the process of getting a product from the manufacturer to the final buyer.
Question 2: Intensive distribution means a company aims to:
- Sell only through company-owned stores
- Limit sales to a single exclusive retailer
- Make the product available in as many outlets as possible (Correct answer)
- Focus distribution on premium retail locations only
Correct answer: Make the product available in as many outlets as possible
Intensive distribution maximizes product availability and convenience, and is most appropriate for low-involvement, frequently purchased goods like candy or soda.
Question 3: Exclusive distribution involves:
- Partnering with only a limited number of carefully selected retailers (Correct answer)
- Selling through every available outlet to maximize reach
- Distributing products only in specific geographic zones
- Using only direct-to-consumer online channels
Correct answer: Partnering with only a limited number of carefully selected retailers
Exclusive distribution grants specific retailers sole rights to carry a product in a territory, often used by luxury or specialty brands to maintain image.
Question 4: Selective distribution is best described as:
- Selling through all possible intermediaries simultaneously
- Using a moderate number of carefully chosen retail outlets (Correct answer)
- Restricting sales to one retailer per market
- Selling exclusively through the company's own website
Correct answer: Using a moderate number of carefully chosen retail outlets
Selective distribution balances broad coverage with channel control, targeting outlets whose brand image and service quality match the product.
Question 5: In a direct distribution channel, the manufacturer:
- Sells exclusively to wholesalers
- Relies on agents to contact end users
- Sells directly to the final consumer without intermediaries (Correct answer)
- Licenses another company to handle all sales
Correct answer: Sells directly to the final consumer without intermediaries
Direct distribution eliminates intermediary markups and gives the manufacturer full control over the customer experience and pricing.
Question 6: Which of the following is an example of an indirect distribution channel?
- A craft brewery selling beer only at its taproom
- A software company selling subscriptions through its own website
- A toy manufacturer selling through major retail chains and wholesalers (Correct answer)
- A farmer selling produce directly at a farmers market
Correct answer: A toy manufacturer selling through major retail chains and wholesalers
An indirect channel uses one or more intermediaries—such as wholesalers or retailers—between the manufacturer and the end consumer.
PCM PCM Distribution & Channel Management 1
A distribution channel is best defined as: