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Middlemen 1 - wholesaler - class-XI

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Wholesalers may have control over retailers, but they do not sell to end-customers.

  1. True

  2. False


Correct Option: A
Explanation:

In product development, an end user (sometimes end-user) is a person who ultimately uses or is intended to ultimately use a product.In information technology, end users are not "customers" in the usual sense—they are typically employees of the customer.

_________ distribution occurs between a producer and industrial users of raw materials needed for the manufacture of finished products.

  1. Customer-to-customer (C2C)

  2. Business-to-business (B2B)

  3. Business-to-customer (B2C)

  4. Customer-to-Business (C2B)


Correct Option: B
Explanation:

Business-to-business is a situation where one business makes a commercial transaction with another. This typically occurs when: A business is sourcing materials for their production process for output .Example- Providing raw material to the other company that will produce output

A distribution channel is a ______ in business. 

  1. optional

  2. privilege

  3. necessity

  4. none of the above


Correct Option: C
Explanation:

Distribution is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for the consumer or business user who needs it. This can be done directly by the producer or service provider, or using indirect channels with distributors or intermediaries.

In the case of corporate trade payments, the link between the banks of the buyer and the seller is the _________.

  1. EFT

  2. Lock boxes

  3. Automated clearing houses

  4. Wire transfers

  5. Both (A) and (D) above


Correct Option: C
Explanation:

In the case of corporate trade payments, the payment information from the payer is electronically transferred to an Automated Clearing House (ACH) which is a link between the banks of the buyer and the seller.

______________ generally take title of the goods and bear the business risks by purchasing and selling the goods in their own name.

  1. Brokers

  2. Wholesalers

  3. Retailers

  4. Manufacturers


Correct Option: B

Which of the following is not true in relation to wholesalers?

  1. Wholesalers serve as an important link between manufacturers and retailers.

  2. Most of the functions performed by wholesalers are such which can be eliminated.

  3. They generally take title of the goods and bear the business risks by purchasing and selling the goods in their own name

  4. Both B and C


Correct Option: B

Purchase and sale of goods and services in large quantities, for the purpose of resale or intermediate use is referred to as _______________.

  1. internal trade

  2. wholesale trade

  3. retail trade

  4. inter state sale


Correct Option: B

_________ not only enable(s) the producers to reach large number of buyers spread over a wide geographical area.

  1. Wholesaler

  2. Retailer

  3. Government

  4. All of the above


Correct Option: A
Explanation:

Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer.

A wholesaler may be an individual or otherwise a firm.

  1. True

  2. False


Correct Option: A
Explanation:

Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer.

If there are no wholesalers, the functions which they perform shall have to be performed either by the manufacturers or the retailers.

  1. True

  2. False


Correct Option: A
Explanation:

Manufacturers mainly focus on production and creating products or finished goods. Manufacturers rarely sell their products directly to consumers or the end users of the products. Instead, manufacturers usually sell their products to other businesses down the chain like a retailer, dealer, or wholesaler.

A distribution system is said to be ______ when the product or service leaves the producer and goes directly to the customer with no middlemen involved.

  1. direct

  2. indirect

  3. one level

  4. two tier


Correct Option: A
Explanation:

Distribution systems can be defined as the sequential flow of procedures, systems, and activities which are designed and linked to facilitate and monitor the movement of goods and services from the source to the consumer.

Radial, Loop, & Network Systems. There are three basic types of distribution system designs: Radial, Loop, or Network. The Radial distribution system is the cheapest to build and is widely used in sparsely populated areas. A radial system has only one power source for a group of customers.

A distribution channel in marketing refers to the path or route through which goods and services travel to get from the place of production or manufacture to the final users.

  1. True

  2. False


Correct Option: A
Explanation:

distribution channel is the route through which goods or services move from the company to the customer or the transfer of payment happens from the customer to the company. Distribution channels can mean selling of products directly or selling through wholesalers, retailers etc.

The companys product-mix influences the pattern of channels. This is substantiated from the which of the following?

  1. Middlemen who can provide wanted marketing services will be given first preference.

  2. Size and average frequency of customers orders also influence the channel decision.

  3. The broader the product- line, the shorter will be the channel.

  4. None of the above


Correct Option: C
Explanation:

Elements of marketing mix such as price, promotion, and distribution are also equally important in designing product mix. Company tries to maintain consistency among these all elements to carry out marketing activities effectively and efficiently.

THE PRODUCT IN FOUR P'S (MARKETING MIX).
Product has a vital role in developing the strategy for the overall marketing mix which includes place, price and promotion. Through a definition of the product features and benefits, the rest of the marketing mix elements are determined and agreed upon

An agent facilitates to reduce the distance between the manufacturer and the wholesaler. This is under which type of channel?

  1. Zero Level Channel

  2. One Level Channel

  3. Two Level Channel

  4. Three Level Channel


Correct Option: D
Explanation:

An intermediary in the channel is called an agent/middleman. Channels normally vary from two-level channels without intermediaries to five-level channels with three intermediaries. For example, a leather handbag manufacturer who prepares handbags and sells it directly to the customer is in a two-level channel.

Market influences the choice of channels of distribution. Identify the factors related to market.

  1. For consumer market, retailer is essential whereas in business market we can eliminate retailing.

  2. For large market size, there are many channels, whereas, for small market size direct selling may be profitable.

  3. For highly concentrated market, direct selling is preferred.

  4. All of the above


Correct Option: D
Explanation:

Market influences sometimes called the internal environment include price, human resources, and firm culture. External influences, or the external environment, include technology, competitors and the economy. 

Small businesses tend to have more control over internal influences than external ones.

When the manufacturer instead of selling the goods to the intermediary sells it directly to the consumer then this is known as ___.

  1. One Level Channel

  2. Zero Level Channel

  3. Two Level Channel

  4. Three Level Channel


Correct Option: B
Explanation:

Zero Level channel / Direct Marketing Channel. Consists of a manufacturer directly selling to the end consumer. This might mean door to door sales, direct mails or telemarketing. Dell online sales is a perfect example of a zero level channel marketing.

Today's large, progressive wholesalers have successfully reacted to rising costs by ________. 

  1. investing little money in equipment or systems

  2. locating in low-rent, low-tax areas

  3. investing in information technology systems

  4. reducing promotional activities


Correct Option: D
Explanation:

Product and service promotion is the most common form of marketingPromotional activities can include: advertising you can advertise your product, service or brand in newspapers, radio, television, magazines, outdoor signage and online

Who plays their significant role in distribution of goods though they do not sell directly to ultimate users or consumers?

  1. Retailer

  2. Wholesaler 

  3. Mediator

  4. Commission agent


Correct Option: B
Explanation:

Wholesaler is a person or a firm that buys a large quantity o goods from the manufacturers, producers, vendors and sells it to the retailers or other businesses who further sell it to the consumers. The wholesaler does not sell the products directly to the consumer, the product flows from wholesaler to the retailer and then to the end user.

Which of the following is true in relation to wholesale trade?

  1. Wholesalers generally take title of the goods and bear the business risks by purchasing and selling the goods in their own name

  2. Wholesalers purchase in bulk and sell in small lots to retailers or industrial users

  3. Wholesalers undertake various activities such as grading of products, packing into smaller lots, storage, transportation, promotion of goods, collection of market information etc

  4. All of the above


Correct Option: D

Wholesalers take delivery of goods when these are produced in factory and keep them in their godowns/warehouses. This is the service of storage given to manufacturers.

  1. True

  2. False


Correct Option: A
Explanation:

warehouse is a building for storing goods. Warehouses are used bymanufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages.

Identify the argument against elimination of wholesalers.

  1. Wholesalers take all responsibilities for sales and distribution of goods, producers become free from the difficulties and troubles of marketing their products.

  2. During the slack seasons and scarcity in demand, the wholesalers resort to hoarding and stocking of goods and sell them at exorbitant prices charging excessive profits.

  3. Wholesalers are unnecessary links between the manufacturers and retailers.

  4. All of the above.


Correct Option: A
Explanation:

Wholesalers are middlemen between the manufacturers and the retailers. They increase the cost of marketing and price of the products goes up. The consumers have to pay higher price. By eliminating wholesalers, prices of the products will decrease and the consumer shall benefit. The manufacturers will be earning more profit on account of lesser prices of the products.

Wholesalers increase the cost of marketing and price of the products goes up. State whether this is an argument which favors elimination of wholesalers.

  1. True

  2. False


Correct Option: A
Explanation:

Elimination of Wholesalers:

1. Wholesalers are middlemen between the manufacturers and the retailers. They increase the cost of marketing and price of the products goes up. The consumers have to pay higher price. By eliminating wholesalers, prices of the products will decrease and the consumer shall benefit. The manufacturers will be earning more profit on account of lesser prices of the products.

2. Wholesalers are unnecessary links between manufacturers and retailers. Their presence in the distribution channel obstructs the smooth and quick delivery of goods from the manufacturers to the ultimate consumers. If they are eliminated, the unrestricted supply of goods takes place from the manufacturers to the retailers and the consumers.

3. During the slack seasons and scarcity in business activities demand, the wholesalers resort to hoarding and stocking of goods and sell them at exorbitant prices charging excessive profits.

4. In certain regions, the wholesaler is the sole distributor of the product. He occupies the monopolistic position and exploits both the retailers and the consumers by charging higher prices if the wholesalers are eliminated it would be in the best interest of both the retailers and the consumers.

5. Big and established retailers such as large departmental stores can afford to make their own purchases directly from the manufacturers without approaching the wholesaler. The wholesalers are easily eliminated.

The wholesalers facilitate ____ of production activity throughout the year by purchasing the goods as and when these are produced.

  1. continuity

  2. risk bearing

  3. storage

  4. none of the above


Correct Option: A
Explanation:

Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer.

Examples of middlemen include ______.

  1. wholesalers

  2. retailers

  3. agents and brokers

  4. all of the above


Correct Option: D
Explanation:

Middlemen include wholesalers, retailers, agents and brokers. Wholesalers and agents are closer to the producers. Wholesalers buy goods in bulk and sell them to the retailers in large quantities. Consumers may also choose to bypass the intermediaries and buy goods directly from the producers.

Which of the following is a non-trading association?

  1. Company

  2. Partnership firm

  3. Club

  4. HUF


Correct Option: C
Explanation:

Non-Trading Organizations. A business concern is an organization involved in activities of buying or selling goods and services with a view of making a profit. There are associations, clubs or societies which are not formed for the purpose of making profit. These are called non-trading organizations..

Advising the manufacturers about various aspects including customers' tastes and preferences, market conditions, competitive activities and the features preferred by the buyers is one of the services given by the wholesaler. Identify the service.

  1. Help in the marketing function

  2. Financial assistance

  3. Facilitating large scale production

  4. Expert advice


Correct Option: D
Explanation:

The advice given by someone who has studied a subject thoroughly or who is very skilled at a particular job. You should seek expert advice before going into business. If you are travelling to a malarial area, get expert advice before you set off.

Wholesaling is concerned with the activities of those persons or establishments which sell to retailers and other merchants, and/or to industrial institutional and commercial users.

  1. True

  2. False


Correct Option: A
Explanation:

Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer.
Examples of this would be plumbers supply houses, or electricians supply firms, or lumber firms that sell only to contractors. Car maufacturers typically sell their cars thru distribution channels direct to car dealers and function as their own wholesalers.

Merchant wholesalers are firms engaged primarily in buying, taking title to, storing, and physically handling products.

  1. True

  2. False


Correct Option: A
Explanation:

They help move goods between producers and retailers and the advent of modern technologies help them do this more efficiently. A wholesale merchant operates in the chain between producer and retail merchant. Some wholesale merchants only organize the movement of goods rather than move the goods themselves.

___________ is/are actively involved in negotiating and other functions of buying and selling while acting on behalf of his/her/their clients.

  1. Agents

  2. Brokers

  3. Commission

  4. A and B


Correct Option: D
Explanation:

The main exchange functions are buying and selling. Both buying and selling functions have their primary objectives as the negotiation of favorable terms of exchange. This function is concerned with seeking out the sources of supply, assembling of products, and activities associated with purchase.

______ is a special mercantile agent who sells the goods of his principal by auction.

  1. A del credere agent

  2. A commission agent

  3. An auctioneer

  4. A broker


Correct Option: C
Explanation:

mercantile agent is a person who is appointed by those in business to act on their behalf or to represent them in dealing with other persons. The person on whose behalf he acts as an agent is known as the 'Principal'.

_____ and agents are closer to the producers.

  1. Retailers

  2. Wholesalers

  3. Customers

  4. All of the above


Correct Option: B
Explanation:

Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services.

 In general, it is the sale of goods to anyone other than a standard consumer.

______ has full authority to perform all functions relating to the business on behalf of his principal.

  1. General Mercantile Agents

  2. Special/Particular Mercantile Agent

  3. Commission Agent

  4. Del Credere Agent


Correct Option: A
Explanation:

mercantile agent is a person who is appointed by those in business to act on their behalf or to represent them in dealing with other persons.

mercantile agent is one having authority in the course of business to sell goods or consign goods for the purpose of sale or to buy goods and even to raise money on the security of goods. A mercantile agent is also called a commissioner agent.

A mercantile agent possesses which of the following characteristics?

  1. He has the authority to buy and sell goods on behalf of his principal.

  2. He does not do business for himself, but only represents his principal in all business dealings.

  3. He is a business intermediary between the manufacturer and the ultimate consumer.

  4. All of the above


Correct Option: D
Explanation:

mercantile agent is a person who is appointed by those in business to act on their behalf or to represent them in dealing with other persons. The person on whose behalf he acts as an agent is known as the 'Principal'.

As the goods are exchanged from one intermediary to the other, their prices _____.

  1. deflate

  2. remain unchanged

  3. inflate

  4. any of the above


Correct Option: C
Explanation:

Tradable commodities consist of basic goods used in commerce that are often interchangeable with other goods of the same type. 

Trading of commodities is usually executed through future contracts on exchanges that standardize the quantity and minimum quality of the products traded.

________ guarantees his principal for the payment for all the goods he sells irrespective of the payment received by him or not.

  1. General Mercantile Agent

  2. A del credere agent

  3. A commission agent

  4. Special/Particular Mercantile Agent


Correct Option: B
Explanation:

A del credere agency is a type of principal-agent relationship wherein the agent acts not only as a salesperson or broker for the principal, but also as a guarantor of credit extended to the buyer.

The wholesalers normally make forward dealing with the supply goods with the producer. This relieves the manufacturers from ______.

  1. plan and regulate their production

  2. keeping the stocks

  3. interim loans

  4. none of the above


Correct Option: B
Explanation:

The stock of a corporation is all of the shares into which ownership of the corporation is divided. In American English, the shares are commonly called stocks. A single share of the stock represents fractional ownership of the corporation in proportion to the total number of shares.

In which wholesaler's channel function might wholesalers provide quicker delivery to buyers because they are closer than the producers?

  1. Warehousing

  2. Risk bearing

  3. Financing

  4. Transportation


Correct Option: D
Explanation:

Transport or transportation is the movement of humans, animals and goods from one location to another. In other words the action of transport is defined as a particular movement of an organism or thing from a point A to the Point B. Modes of transport include air, land, water, cable, pipeline and space.

Wholesalers undertake advertisements and other sales promotional activities to induce customers to purchase the goods. The function performed by the wholesalers is ____.

  1. Grant of credit

  2. Specialized knowledge

  3. Marketing support

  4. Risk sharing


Correct Option: C
Explanation:

Marketing Support Service. A Marketing Support Service would typically include some or all of the the following elements Stationery & Marketing Collateral management  design, print, logistics. Website portfolio design and development. Advertising Campaign media planning / buying, creative, delivery & management.

Facilitating large scale production is one of the services of wholesalers to manufacturers. What do wholesalers do through this function?

  1. Wholesalers provide financial assistance to the manufacturers in the sense that they generally make cash payment for the goods purchased by them.

  2. They bear lots of risks such as the risk of fall in prices, theft, pilferage, spoilage, fire, etc.

  3. Wholesalers collect small orders from number of retailers and pass on the pool of such orders to manufacturers and make purchases in bulk quantities.

  4. All of the above


Correct Option: C
Explanation:

Large scale production refers to the production of a commodity on a large scale with a large sized firm. It requires huge investments in plant and machinery. Large scale production can be carried out if the market size is large and expanding.Large scale firms are division of labor and production and sale of goods in large quantities. They cater to a large market. The industrial revolution laid the foundation of the factory system. The factory system which extensively used machinery and adopted division of labor made large scale production possible.

The following are some of the motives of large scale production.

  1. Desire for economy.
  2. Desire for increase in sales.
  3. Desire for a large customer base.
  4. Desire for large profits.
  5. Desire to become a global company.
  6. Desire for economic power.
  7. Desire for continuous growth and expansion.
  8. Desire to increase demand.
  9. Desire to overcome competition.
  10. Desire to achieve monopoly status.
  11. Desire for achieving long term profitability.

Which of the following is referred to as 'Voluntary chains?'

  1. Co-operative retailing

  2. Retailers co-operatives

  3. Consumer's cooperatives

  4. Instalment selling


Correct Option: B

What service of wholesalers helps the retailers in managing their business with relatively small amount of working capital?

  1. Marketing support

  2. Grant of Credit

  3. Availability of goods

  4. Specialised knowledge


Correct Option: B
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