Channel Management | Distribution, Logistics & Channel Strategy | MCQs with Answers
1. What typically triggers dangerous channel conflict?
A. Price increases across the industry
B. One channel targeting customer segments already served by another
C. Seasonal changes in demand
D. Competitors entering the market
✅ Answer: B. One channel targeting customer segments already served by another
2. Which form of conflict is considered harmless?
A. Conflict causing channel exits
B. Necessary friction in competitive environments
C. Conflict that stops product sales
D. Conflict leading to lawsuits
✅ Answer: B. Necessary friction in competitive environments
3. Hill’s Science Diet experienced conflict primarily due to:
A. New pricing strategy
B. Introducing substandard product lines
C. Selling through a competing “store-within-a-store” concept
D. Increasing distributor margins
✅ Answer: C. Selling through a competing “store-within-a-store” concept
4. ATK lost its dominance because it:
A. Stopped distributing its products
B. Reduced advertising
C. Bypassed distributors and sold directly to mechanics
D. Shifted to premium pricing
✅ Answer: C. Bypassed distributors and sold directly to mechanics
5. Quaker’s channel conflict with Snapple distributors occurred because:
A. Low product quality
B. Poor branding decisions
C. Moving larger accounts to Gatorade’s delivery channel
D. Removing discounts
✅ Answer: C. Moving larger accounts to Gatorade’s delivery channel
6. The FIRST screening question to identify a true conflict is:
A. Is the channel declining?
B. Are the channels targeting the same end-users?
C. Are margins equal?
D. Do customers prefer the new channel?
✅ Answer: B. Are the channels targeting the same end-users?
7. When Coca-Cola introduced vending machines in Japan, it demonstrated that:
A. Channels always compete directly
B. Vending machines target different consumption occasions
C. Retailers can control channel strategy
D. Vending machines reduce overall sales
✅ Answer: B. Vending machines target different consumption occasions
8. Nike’s NikeTown stores ultimately:
A. Reduced brand image
B. Cannibalized traditional retailers
C. Boosted brand awareness across all channels
D. Caused retailer boycotts
✅ Answer: C. Boosted brand awareness across all channels
9. Amazon’s early partnerships with publishers primarily helped:
A. Reduce margins for bookstores
B. Expand market demand for books
C. Decrease consumer choice
D. Reduce product quality
✅ Answer: B. Expand market demand for books
10. Progressive Auto Insurance avoided channel conflict by:
A. Eliminating its agency network
B. Creating a referral system for agents
C. Reducing agent incentives
D. Offering only direct sales
✅ Answer: B. Creating a referral system for agents
11. A false signal of channel conflict may occur when:
A. Channel economics deteriorate due to poor operations
B. New channels intentionally target old ones
C. New channels are highly profitable
D. Manufacturers overinvest in partners
✅ Answer: A. Channel economics deteriorate due to poor operations
12. A manufacturer should support a weak distributor if:
A. It represents large future volume
B. It complains the loudest
C. It requests higher margins
D. Competitors demand it
✅ Answer: A. It represents large future volume
13. When a channel is declining due to consumer preference shifts, the manufacturer should:
A. Increase investment in declining channels
B. Align with the new channel
C. Avoid upsetting old partners
D. Stop all channel activity
✅ Answer: B. Align with the new channel
14. Specialty pet food producers support declining small pet shops because they:
A. Are more profitable
B. Still represent 60% of the volume
C. Have stronger marketing
D. Offer premium services
✅ Answer: B. Still represent 60% of the volume
15. The decision-making framework categorizes high-threat, high-importance situations as:
A. Do nothing
B. Monitor the channel
C. Act to avert or address conflict
D. Shift to new channels
✅ Answer: C. Act to avert or address conflict
16. Destructive conflict must be addressed when the channel represents:
A. Less than 5% of volume
B. 10–15% or more of volume or profit
C. Only new customers
D. A declining market
✅ Answer: B. 10–15% or more of volume or profit
17. Differentiated product lines are used to:
A. Increase manufacturing costs
B. Enforce identical pricing across channels
C. Reduce overlap between channels
D. Increase conflict intentionally
✅ Answer: C. Reduce overlap between channels
18. Black & Decker’s three-tier product strategy illustrates:
A. Using separate brands for distinct customer segments
B. Using one product for all channels
C. Eliminating direct channels
D. Standardizing offerings
✅ Answer: A. Using separate brands for distinct customer segments
19. Kendall-Jackson avoids channel conflict online by:
A. Selling only new wines
B. Pricing online offerings at high-end street prices
C. Reducing retail supply
D. Creating exclusive territories
✅ Answer: B. Pricing online offerings at high-end street prices
20. Different model numbers for identical products primarily aim to:
A. Simplify consumer choice
B. Create perception of differentiation
C. Increase overall costs
D. Reduce brand recognition
✅ Answer: B. Create perception of differentiation
21. Why is product differentiation across channels useful?
A. It guarantees higher margins
B. It prevents direct product comparisons
C. It enforces regulatory compliance
D. It eliminates competitive threats
✅ Answer: B. It prevents direct product comparisons
22. Dividing channel roles helps most with:
A. Reducing manufacturing cost
B. Clarifying functional responsibilities
C. Increasing retailer power
D. Eliminating end-user segmentation
✅ Answer: B. Clarifying functional responsibilities
23. Manufacturers improve declining channel economics by:
A. Increasing penalties
B. Providing rebates for service performance
C. Reducing communication channels
D. Cutting product ranges
✅ Answer: B. Providing rebates for service performance
24. GE improved its dealer network by:
A. Cutting all dealer margins
B. Providing financing and systems support
C. Moving fully to direct sales
D. Reducing dealer territories
✅ Answer: B. Providing financing and systems support
25. Manufacturers may leverage strong brands to:
A. Encourage channel rebellion
B. Prevent retaliation
C. Reduce marketing costs
D. Eliminate intermediary relationships
✅ Answer: B. Prevent retaliation
26. When retaliation is unavoidable, manufacturers should:
A. Stop sales immediately
B. Accelerate migration to winning channels
C. Apologize to the channel
D. Reduce product quality
✅ Answer: B. Accelerate migration to winning channels
27. Airlines limited channel retaliation by:
A. Removing all travel agents
B. Shifting to direct, ticketless channels
C. Increasing agent commissions
D. Reducing flight capacity
✅ Answer: B. Shifting to direct, ticketless channels
28. IBM’s failed attempt at direct selling illustrates:
A. Channels rarely retaliate
B. Retaliation can force manufacturers to back down
C. Direct channels are always superior
D. Distributors lack bargaining power
✅ Answer: B. Retaliation can force manufacturers to back down
29. Bass Ale’s experience with UK retailers shows that:
A. Channel pilots must always succeed
B. Even small-scale pilots can trigger retaliation
C. Retailers cannot influence channel strategy
D. Manufacturers should abandon multi-channel strategies
✅ Answer: B. Even small-scale pilots can trigger retaliation
30. Dangerous channel conflict is best described as:
A. Competition that increases brand awareness
B. Conflict that undermines channel economics
C. A normal market phenomenon
D. A strategy to reduce costs
✅ Answer: B. Conflict that undermines channel economics
31. When channels mistakenly believe they compete, manufacturers should:
A. Ignore the conflict
B. Show economic complementarity
C. Pull out of the new channel
D. Reduce advertising
✅ Answer: B. Show economic complementarity
32. The first sign of non-destructive conflict is when:
A. One channel threatens lawsuits
B. Profitability of complaining partner remains stable
C. Customer segments overlap
D. Direct-channel prices drop sharply
✅ Answer: B. Profitability of complaining partner remains stable
33. Which factor helps identify false channel conflict?
A. Declining manufacturer profits
B. Misperceived competition among channels
C. Sudden customer shift
D. High switching cost
✅ Answer: B. Misperceived competition among channels
34. Which is an example of complementing—NOT replacing—a channel?
A. Selling exclusively online
B. Introducing new channels to increase reach
C. Removing distributors
D. Eliminating direct channels
✅ Answer: B. Introducing new channels to increase reach
35. The purpose of assigning exclusive territories is to:
A. Limit competition among channels
B. Increase internal conflict
C. Improve manufacturing timelines
D. Increase retailer dependency
✅ Answer: A. Limit competition among channels
36. When a channel contributes low future value, manufacturers should:
A. Prioritize protecting it
B. Allow it to decline
C. Increase marketing support
D. Block new channels
✅ Answer: B. Allow it to decline
37. When a channel accounts for high volume but is declining, manufacturers should:
A. Immediately exit
B. Support economics while aligning with new channels
C. Offer higher discounts
D. Mandate channel consolidation
✅ Answer: B. Support economics while aligning with new channels
38. Why do consumer electronics companies use different model numbers?
A. To increase warranty coverage
B. To justify separate channel pricing
C. To ensure retailers cannot compare prices
D. To simplify SKUs
✅ Answer: C. To ensure retailers cannot compare prices
39. When should “Do nothing” be selected in the conflict framework?
A. When conflict is destructive
B. When channel importance is low and conflict intensity is low
C. When channel profitability is high
D. When retaliation is likely
✅ Answer: B. When channel importance is low and conflict intensity is low
40. What is the biggest risk of ignoring destructive conflict?
A. Increased competition
B. Loss of threatened channel volume
C. Higher manufacturing cost
D. Increased advertising needs
✅ Answer: B. Loss of threatened channel volume
Below are the continuation MCQs from 41–120, following the same format and keeping them MBA-level, conceptual + applied, based strictly on the given passage.
(I will add SEO Title, Slug & Keywords + Google FAQ Schema after MCQs 120 as requested earlier — just complete MCQs first.)
Q41. Dangerous channel conflict most commonly arises when:
A. Channels use different pricing strategies
B. One channel targets customer segments already served by another
C. Customers dislike multichannel options
D. New technologies disrupt supply chain operations
✅ Answer: B. One channel targets customer segments already served by another
Q42. What is a typical consequence when a threatened channel retaliates?
A. Consumer loyalty increases
B. Manufacturer profits decline
C. Competitors reduce investments
D. Market segmentation widens
✅ Answer: B. Manufacturer profits decline
Q43. Hill’s Science Diet faced channel conflict because it:
A. Entered e-commerce later than competitors
B. Launched a “store within a store” model in grocery channels
C. Reduced prices without consulting distributors
D. Introduced new pet food flavors
✅ Answer: B. Launched a “store within a store” model in grocery channels
Q44. ATK lost its monopoly position because it:
A. Overinvested in marketing
B. Shifted to a premium pricing model
C. Went direct to mechanics, bypassing distributors
D. Reduced the number of product SKUs
✅ Answer: C. Went direct to mechanics, bypassing distributors
Q45. Quaker Oats’ channel conflict with Snapple distributors occurred mainly because:
A. Snapple refused to increase marketing spending
B. Distributors saw their exclusive geographic rights threatened
C. Snapple’s product quality declined
D. Gatorade discontinued its grocery-based channel
✅ Answer: B. Distributors saw their exclusive geographic rights threatened
Q46. Which question helps identify whether a channel conflict is dangerous?
A. How many years the channel has existed
B. Whether channels serve the same end users
C. Whether competitors are profitable
D. Whether technology upgrades are affordable
✅ Answer: B. Whether channels serve the same end users
Q47. Coca-Cola was able to justify vending machines in Japan by demonstrating that:
A. Retailers were inefficient
B. Vending machines served consumers at different consumption occasions
C. Grocery stores were becoming obsolete
D. Retail margins were too high
✅ Answer: B. Vending machines served consumers at different consumption occasions
Q48. A perceived conflict may actually be an opportunity when:
A. Channels are competing for identical customers
B. A new channel expands product usage
C. A channel is losing money
D. Distributors have excess inventory
✅ Answer: B. A new channel expands product usage
Q49. NikeTown stores primarily served to:
A. Lower retail prices
B. Boost brand awareness across channels
C. Replace partner retail stores
D. Increase supply chain efficiency
✅ Answer: B. Boost brand awareness across channels
Q50. The introduction of online bookselling by Amazon initially forced:
A. Supermarkets to sell books
B. Publishers to reduce book quality
C. Borders and Barnes & Noble to enter online channels
D. Libraries to digitize content
✅ Answer: C. Borders and Barnes & Noble to enter online channels
Q51. Progressive Auto Insurance introduced direct telephone sales in a way that:
A. Eliminated the agent channel
B. Offered 24-hour referral services supporting agents
C. Required agents to reduce commissions
D. Restricted customer service hours
✅ Answer: B. Offered 24-hour referral services supporting agents
Q52. Before acting on channel complaints, manufacturers should determine whether:
A. Distributors are operating globally
B. The complaining player is simply a weak operator
C. Competitors have similar channel structures
D. Customers demand premium pricing
✅ Answer: B. The complaining player is simply a weak operator
Q53. Which factor helps determine if a weak channel partner should be replaced?
A. Size of its sales team
B. Amount of revenue lost if it fails
C. Number of customer complaints
D. Number of years in partnership
✅ Answer: B. Amount of revenue lost if it fails
Q54. A declining channel may not require intervention if:
A. It still controls 80% of total volume
B. Its decline aligns with changing consumer preferences
C. Distributors are highly profitable
D. It operates internationally
✅ Answer: B. Its decline aligns with changing consumer preferences
Q55. Pharmaceutical companies prefer HMOs and mail-order pharmacies because:
A. They sell at higher margins
B. They place bulk orders
C. They require minimal marketing
D. They have fewer regulatory constraints
✅ Answer: B. They place bulk orders
Q56. In the case of specialty pet foods, manufacturers must support small pet stores because:
A. They are growing at high rates
B. They still represent a large volume share
C. They offer lower prices
D. They invest heavily in advertising
✅ Answer: B. They still represent a large volume share
Q57. A conflict that is “destructive” and involves more than 10–15% of volume requires:
A. Outsourcing distribution
B. Immediate strategic action
C. Reducing SKU counts
D. Eliminating all channel overlaps
✅ Answer: B. Immediate strategic action
Q58. Which action helps prevent conflict when multiple channels target the same customer segments?
A. Reducing manufacturing capacity
B. Introducing differentiated products for each channel
C. Increasing advertising spend
D. Shifting entirely to direct distribution
✅ Answer: B. Introducing differentiated products for each channel
Q59. Black & Decker uses different brands across channels primarily to:
A. Increase overall production
B. Serve different customer segments without conflict
C. Reduce global competition
D. Promote online-only models
✅ Answer: B. Serve different customer segments without conflict
Q60. Kendall-Jackson avoids channel conflict online by:
A. Offering only discounted bundles
B. Selling limited ranges not found in retail stores
C. Partnering with mass retailers
D. Eliminating distributor margins
✅ Answer: B. Selling limited ranges not found in retail stores
Q61. Levi Strauss avoids cannibalization among its brands by:
A. Keeping all inventory in one centralized warehouse
B. Targeting each brand to different customer segments and channels
C. Maintaining uniform pricing across channels
D. Eliminating all discounting
✅ Answer: B. Targeting each brand to different customer segments and channels
Q62. Using different model numbers for the same product across channels creates:
A. Supply chain efficiencies
B. Consumer confusion that reduces price competition
C. Higher production cost
D. Increased regulatory risk
✅ Answer: B. Consumer confusion that reduces price competition
Q63. Allocating exclusive territories primarily helps in:
A. Maximizing product variety
B. Reducing cross-channel conflict
C. Reducing promotional budgets
D. Increasing warranty claims
✅ Answer: B. Reducing cross-channel conflict
Q64. Adjusting margins between products to help specific channels is an example of:
A. Channel penalties
B. Channel economics correction
C. Brand repositioning
D. Forecasting error reduction
✅ Answer: B. Channel economics correction
Q65. GE improved channel performance by:
A. Eliminating discounts
B. Offering dealer support programs and favorable financing
C. Closing small retail partners
D. Reducing product lines
✅ Answer: B. Offering dealer support programs and favorable financing
Q66. Sears supports appliance dealers in rural areas mostly through:
A. Advertising subsidies
B. Financing and systems support
C. Mandatory pricing policies
D. Restricting store expansion
✅ Answer: B. Financing and systems support
Q67. A channel is less likely to retaliate when:
A. It has strong bargaining power
B. Retaliation would harm its own profitability more
C. It carries premium brands
D. Competitors are expanding
✅ Answer: B. Retaliation would harm its own profitability more
Q68. Airlines migrate volume away from agencies mainly to:
A. Increase travel insurance sales
B. Reduce distribution costs
C. Support small travel agencies
D. Improve airport utilization
✅ Answer: B. Reduce distribution costs
Q69. IBM backed down from going direct because:
A. It lacked distribution centers
B. Distributors strongly objected
C. Customers demanded higher prices
D. The strategy increased inventory costs
✅ Answer: B. Distributors strongly objected
Q70. Bass Ale’s home delivery pilot failed because:
A. Consumers rejected home delivery
B. Cash-and-carry operators retaliated by pulling products
C. Online systems were poorly designed
D. It lacked media advertising
✅ Answer: B. Cash-and-carry operators retaliated by pulling products
Q71. The primary purpose of understanding conflict sources is to:
A. Increase supply chain visibility
B. Avoid overreaction or paralysis
C. Capture competitor channels
D. Reduce advertising spend
✅ Answer: B. Avoid overreaction or paralysis
Q72. A “fire” situation in Exhibit 1 indicates:
A. Low threat + low importance
B. High potential conflict + high channel importance
C. High conflict + low importance
D. Minimal risk overall
✅ Answer: B. High potential conflict + high channel importance
Q73. A “smoke” situation in Exhibit 1 suggests:
A. Minor conflict but from an important channel
B. No conflict expected
C. A declining industry
D. Need to reduce product quality
✅ Answer: A. Minor conflict but from an important channel
Q74. When channel importance is low and conflict is low, the recommended action is:
A. Migrate volume
B. Do nothing
C. Create exclusive territories
D. Increase pricing
✅ Answer: B. Do nothing
Q75. Creating segment-specific channel programs helps by:
A. Standardizing costs
B. Allowing unique services for certain customer groups
C. Reducing product differentiation
D. Eliminating direct channels
✅ Answer: B. Allowing unique services for certain customer groups
Q76. Introducing a new channel to complement existing channels helps to:
A. Reduce channel overlap
B. Enhance the existing channel’s value proposition
C. Increase operational redundancy
D. Limit geographic reach
✅ Answer: B. Enhance the existing channel’s value proposition
Q77. Fostering consolidation among intermediaries is useful when:
A. Channel is vibrant and growing
B. Channel is declining
C. Channel is expanding too fast
D. Competitors are reducing prices
✅ Answer: B. Channel is declining
Q78. A channel that continues to carry 60% volume even when declining:
A. Must be ignored to avoid losses
B. Needs economic support during transition
C. Should be immediately replaced
D. Should be forced to reduce prices
✅ Answer: B. Needs economic support during transition
Q79. Manufacturers can leverage power effectively when:
A. They own strong brands that channels depend on
B. Channels control customer relationships
C. Customers resist new channels
D. Competitors use similar strategies
✅ Answer: A. They own strong brands that channels depend on
Q80. Minor product modifications across channels help to:
A. Reduce production lines
B. Create perceived differentiation
C. Increase regulatory approvals
D. Decrease demand volatility
✅ Answer: B. Create perceived differentiation
Q81. When should a manufacturer “back off” in channel conflict?
A. When threatened channel is unimportant
B. When retaliation risks outweigh channel gains
C. When competitors enter new channels
D. When inventory is low
✅ Answer: B. When retaliation risks outweigh channel gains
Q82. A manufacturer must act when a channel:
A. Delivers more than 10–15% of profit and shows destructive conflict
B. Reduces marketing spend
C. Requests promotional support
D. Declines in a growing category
✅ Answer: A. Delivers more than 10–15% of profit and shows destructive conflict
Q83. Using game theory in channel management helps forecast:
A. Product costs
B. Channel retaliation or cooperation
C. Inventory levels
D. Advertising reach
✅ Answer: B. Channel retaliation or cooperation
Q84. Snapple distributors’ legal action illustrates:
A. How low margins cause conflict
B. How conflicting channel strategies can create severe backlash
C. How direct selling is more profitable
D. How brands decline in maturity
✅ Answer: B. How conflicting channel strategies can create severe backlash
Q85. The primary role of analyzing channel economics is to:
A. Reduce marketing budgets
B. Detect deterioration caused by overlapping channels
C. Increase product assortment
D. Improve competitor benchmarking
✅ Answer: B. Detect deterioration caused by overlapping channels
86. Which of the following best explains exclusive distribution?
A. Distributing through all possible outlets
B. Using a single authorized reseller in a territory
C. Preventing intermediaries from stocking competitor brands
D. Selling directly to consumers without intermediaries
✅ Answer: B. Using a single authorized reseller in a territory
87. A distributor begins pushing competitor products more than your brand. This is an example of:
A. Channel disintermediation
B. Channel conflict
C. Channel integration
D. Channel power balancing
✅ Answer: B. Channel conflict
88. In channel design, which factor is MOST important for FMCG products?
A. High service customization
B. Long negotiation cycles
C. Extensive market coverage
D. Limited retail presence
✅ Answer: C. Extensive market coverage
89. Which KPI best assesses distribution efficiency?
A. Gross margin return
B. Cost-to-serve
C. Customer lifetime value
D. Employee satisfaction
✅ Answer: B. Cost-to-serve
90. Backward integration in distribution means:
A. Manufacturer acquiring retailers
B. Retailer acquiring manufacturers
C. Brand outsourcing logistics
D. Brand increasing share of online channels
✅ Answer: B. Retailer acquiring manufacturers
91. Which channel function is performed by wholesalers but NOT by agents?
A. Negotiating sales
B. Physical possession of goods
C. Finding buyers
D. Creating product assortments
✅ Answer: B. Physical possession of goods
92. When a manufacturer gives higher margins to e-commerce compared to offline retailers, the likely result is:
A. Reduced channel conflict
B. Price equilibrium across channels
C. Increased offline resentment
D. Stronger reseller loyalty
✅ Answer: C. Increased offline resentment
93. Which of the following best describes channel stewardship?
A. Auditing retail outlets
B. Exercising leadership to maximize channel performance
C. Adding more intermediaries to increase reach
D. Creating trade promotions
✅ Answer: B. Exercising leadership to maximize channel performance
94. If a company wants higher control and higher reach, the best hybrid channel is:
A. Direct-only
B. Distributor-only
C. Direct + Key Distributors
D. Franchise-only
✅ Answer: C. Direct + Key Distributors
95. A channel partner demanding higher credit limits is asking for:
A. Promotional allowance
B. Trade credit
C. Channel exclusivity
D. Slotting fee
✅ Answer: B. Trade credit
96. Which of the following is a horizontal conflict?
A. Manufacturer vs retailer
B. Distributor vs retailer
C. Two retailers competing for the same brand
D. Manufacturer vs logistics provider
✅ Answer: C. Two retailers competing for the same brand
97. Just-in-time (JIT) distribution mainly helps reduce:
A. Product variety
B. Inventory carrying cost
C. Customer satisfaction
D. Channel margins
✅ Answer: B. Inventory carrying cost
98. Which metric indicates how often inventory is replenished?
A. Order cycle time
B. Fill rate
C. Inventory turnover
D. Cost-to-serve
✅ Answer: C. Inventory turnover
99. Multichannel conflict increases when:
A. Prices are consistent across channels
B. Channel incentives are aligned
C. Online channels discount heavily
D. Partner roles are clearly defined
✅ Answer: C. Online channels discount heavily
100. A firm adopting zero-level channel is using:
A. Agents only
B. No intermediaries
C. Only wholesalers
D. Only retailers
✅ Answer: B. No intermediaries
101. Channel intensity decisions relate to:
A. Number of SKUs distributed
B. Number of intermediaries used
C. Number of territories assigned
D. Number of customers in the market
✅ Answer: B. Number of intermediaries used
102. A franchise model is most suitable when:
A. Brand requires tight control + local entrepreneurship
B. Demand is low
C. Product requires little service
D. Market is shrinking
✅ Answer: A. Brand requires tight control + local entrepreneurship
103. Which is a core benefit of selective distribution?
A. Maximum coverage
B. Minimum control
C. Improved retailer motivation
D. Elimination of intermediaries
✅ Answer: C. Improved retailer motivation
104. A manufacturer offering 5% extra commission to retailers for push-selling is an example of:
A. Pull strategy
B. Franchise support
C. Trade promotion
D. Channel integration
✅ Answer: C. Trade promotion
105. In channel budgeting, slotting fees refer to:
A. Payments for shelf space in retail stores
B. Discounts on bulk orders
C. Online sponsored listings
D. Margin offered to distributors
✅ Answer: A. Payments for shelf space in retail stores
106. When a company sells through Amazon, Flipkart, and its own store, the channel structure is:
A. Single channel
B. Direct-only
C. Dual distribution
D. Multichannel
✅ Answer: D. Multichannel
107. Which strategy helps reduce channel conflict?
A. Disclosing different price lists
B. Standardizing margins across channels
C. Encouraging deep discounting
D. Reducing partner training
✅ Answer: B. Standardizing margins across channels
108. Which statement best describes channel mapping?
A. Tracking customer complaints
B. Visualizing the flow of goods and value across intermediaries
C. Monitoring financial performance of retailers
D. Benchmarking competitors’ prices
✅ Answer: B. Visualizing the flow of goods and value across intermediaries
109. An online-first D2C brand opening physical stores is an example of:
A. Disintermediation
B. Reintermediation
C. Horizontal expansion
D. Franchising
✅ Answer: B. Reintermediation
110. Which channel strategy fits premium luxury brands?
A. Intensive distribution
B. Open distribution
C. Exclusive distribution
D. Broad retailing
✅ Answer: C. Exclusive distribution
111. A manufacturer sets minimum retail prices to prevent undercutting. This is called:
A. MRP
B. Resale Price Maintenance (RPM)
C. Channel policing
D. Slotting control
✅ Answer: B. Resale Price Maintenance (RPM)
112. The practice of giving gifts to retailers for meeting sales targets is:
A. Coercive power
B. Reward power
C. Legitimate power
D. Expertise power
✅ Answer: B. Reward power
113. Which of the following is NOT a distribution channel function?
A. Transportation
B. Risk-taking
C. Market sensing
D. Employee performance appraisal
✅ Answer: D. Employee performance appraisal
114. Distributors typically earn higher margins when:
A. Demand is high
B. Product requires high service levels
C. Manufacturer sells directly
D. Retailer is dominant
✅ Answer: B. Product requires high service levels
115. Which channel member typically carries the highest inventory risk?
A. Agents
B. Brokers
C. Wholesalers
D. Market research firms
✅ Answer: C. Wholesalers
116. Grey market sales occur when:
A. Unofficial channels import genuine products
B. Counterfeit products enter a market
C. Retailers offer loyalty points
D. Logistics partners fail service levels
✅ Answer: A. Unofficial channels import genuine products
117. A company merging with its primary distributor is an example of:
A. Lateral integration
B. Vertical integration
C. Reverse integration
D. Indirect synergy
✅ Answer: B. Vertical integration
118. Which of the following improves channel partner loyalty MOST?
A. Frequent price changes
B. Clear communication + stable policies
C. Unpredictable incentives
D. Limited product training
✅ Answer: B. Clear communication + stable policies
119. A retailer who places large orders but pays late creates which type of issue?
A. Service conflict
B. Financial risk
C. Coverage gap
D. Channel redundancy
✅ Answer: B. Financial risk
120. The primary goal of channel management is:
A. Minimizing intermediaries
B. Maximizing channel reach and efficiency
C. Increasing taxes
D. Reducing product features
✅ Answer: B. Maximizing channel reach and efficiency
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