Question

One of the DISADVANTAGES of intensive distribution is that it:

-    is difficult to maintain control over a large number of retailers.

-    is relevant only for durable products.

-    is relevant only in the case of high-priced, high-margin products.

-    often runs into legal difficulties.

Which is WRONG with regard to wholesalers:

-    agents do not take title to goods but help their customers to sell their .

-    facilitating agents generally perform specific distribution tasks, such as storage.

-    merchants often negotiate price and set terms of sale.

-    brokers generally handle a broad range of unrelated products.

Risk costs that are part of inventory costs are:

-    opportunity costs resulting from tying up funds in inventory instead of using them in other more profitable investments.

-    costs such as insurance and taxes that are present in many states.

-    warehousing space and materials handling costs.

-    costs due to possible loss, damage, pilferage, or obsolescence.

Many retailer start out as inexpensive operations and offer basic products/services to customers. Then what happens:

-    basic protective packaging will evolve into gaudy, eye-catching packaging.

-    mobility is the key to retailing success—mail order sales will increase.

-    stores with low margins and a volume orientation will evolve into higher price-markup stores.

-    supermarkets will evolve into corner grocery stores.

Answer 1