Short Type Questions - Enterprise Marketing, Entrepreneurship, Class 12 | Additional Study Material for Commerce PDF Download

Q1. Identify the intermediaries involved in the indirect selling mode. (CBSE 2011 A.I.) (3 marks)
Ans.
(i) One level channel : Manufacturer → Retailer → Customer.
(ii) Two level channel : Manufacturer → Wholesaler → Retailer → Customer.
(iii) Three level channel : Manufacturer → Agent → Wholesaler → Retailer → Customer.

Q2. What type of distribution would you adopt for consumable and perishable products.  (CBSE 2010 Comptt.) (3 marks)
Ans. Direct selling mode will be preferred for consumable and perishable goods. Milk is such a product. This mode do not have any wholesaler or mediator. Longer is the chain of distribution greater is the time taken for the distribution. Few persons appointed exclusively for the distribution of product will ensure speedy delivery and quick recovery of the invested money.

Q3. Distinguish between the direct selling mode and the indirect selling mode. (3 marks)
Ans. Direct selling mode and the indirect selling mode can be distinguished under following headings :
(a) Length of Channel : Direct selling mode has shortest length of channel whereas, indirect selling mode has longer length of channel.
(b) Competition : In case of intense competition in the market, the direct selling mode is preferred whereas in case of less intense competition, indirect selling mode is preferred.
(c) Nature of Product : Product having shorter shelf-life like milk, vegetable etc. are sold through direct selling mode, whereas products with more shelf-life is sold through indirect selling mode.

Q4. When does an entrepreneur employ dealers for sales ? (3 marks)
Ans. An entrepreneur can employ dealers for sales when :
(a) The product is having longer shelf life.
(b) The size of market is very large.
(c) Market is spread to larger distances.
(d) The expenditure on the product is very small .
(e) The producer is willing to take less risk.
(f) Large-scale production is undertaken by the producers.
(g) The entrepreneur launches a new product.

Q5. How does the nature of products affect the distribution mix? (3 marks)
Ans. Nature of product plays an important role in distribution mix. This can be explained using following :
(a) Unit value of the product : When the product is very costly it is best to use a small distribution channel. Whereas, for less costly products long distribution channel is used.
(b) Perishability : For perishable goods direct selling should be preferred whereas for durable goods long distribution channel can be used.
(c) Technical Nature : If a product is of technical nature, then it is better to use direct selling method. This helps the user to know the necessary technicalities of the product.

Q6. Why is direct selling preferred for a competitive market ? (3 marks)
Ans. Direct selling is preferred in perfect competition due to following reasons :
(a) More Number of Competitors : As the number of competitors are more therefore, direct selling mode is convenient method for reaching the consumers easily and quickly.
(b) Views : Customer’s views can be obtained easily. The feedback of customers can be used to make further changes in the product.
(c) Convenience : It is convenient from the customers point of view. Delay in supply is avoided by using direct method.

Q7. What are the factors you would keep in mind for the distribution of a seasonal good in market ? (3 marks)
Ans. Following factors would be kept in mind :
(a) Proper planning for the distribution is made in advance.
(b) Financially strong channel members like dealers are appointed.
(c) Quick transportation arrangements are planned.

Q8. Write a short note on distribution/place mix. (3 marks)
Ans. A channel of distribution or trade channel is defined as the path or route along which goods move from products or manufacturers to ultimate consumers or industrial users. In other words, it is a distribution network through which the producer puts his products in the market and passes it to the actual users. This channel consists of products, consumers or users and the various middlemen like wholesalers, selling agents and retailers (dealers) who intervene between the producers and consumers. Therefore, the channel serves to bridge the gap between the point of production and the point of consumption thereby creating time, place and possession utilities.

Q9. What are the three types of flows of a channel of distribution ? (3 marks)
Ans. A channel of distribution consists of three types of flows :
(i) Downward flow of goods from producers to consumers.
(ii) Upward flow of cash payments for goods from consumers to producers.
(iii) Flow of marketing information in both downward and upward direction, i.e., flow of information on new products new uses of existing products, etc. from producers to consumers. Flow of information is the form of feedback on the wants, suggestions, complaints, etc. from consumers/user to producers.

Q10. How do government related considerations affect the selection of channel of distribution ? (3 marks)
Ans. Considerations related to the government also affect the selection of channel of distribution. For example, only a license holder can sell medicines in the market according to the law of the government. In this situation, the manufacturer of medicines should take care that the distribution of his product takes place only through such middlemen who have the relevant license.

Q11. Explain three considerations which affect the selection of the channel of distribution. (3 marks)
Ans.
(i) Cost : A manufacturer should select such a channel of distribution which is less costly and also useful from other angles.
(ii) Availability : Sometimes some other channel of distribution can be selected if the desired one is not available.
(iii) Possibilities of sales : Such a channel which has a possibility of large sale should be given weightage.