Students get through the TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution which is useful for their exam preparation.

TN State Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Very short answer questions

Question 1.
Explain -The channel of distribution?
Answer:
A channel is a route through which the goods are passed on to the ultimate consumer. There are direct channels or routes of distribution without middlemen.

Question 2.
Define channels of distribution.
Answer:
According to Cundiff. W and Still, a channel of distribution may be defined as “a path traced in the direct or indirect transfer of title to a product as it moves from the producer to ultimate consumers”.

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 3.
What is e-commerce?
Answer:
This is also a direct channel where there is no middleman. A website is created by the producer and through the internet, the product order is received and delivery of goods is made from the nearest godown of the producer.

Question 4.
What is the middlemen factor?
Answer:
Middlemen who are experienced and have produced more sales are wanted by all producers. Long channel naturally increases the cost and price of the product. The number of layers of middlemen should be kept to a minimum.

Question 5.
Who is a merchant middleman?
Answer:
Merchant Middlemen are the intermediaries who buy and sell the goods in their own name, and in return earn a profit out of it. They take ownership as well as possession of the goods they sell

Question 6.
Define Wholesaler.
Answer:
According to Evelyn Thomas “, a true wholesaler is himself neither a manufacturer nor a retailer but act as a link between the two”.

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 7.
Define Retailer.
Answer:
According to Cundiff and Still “a retailer is a merchant or occasionally an agent whose main business is selling directly to the ultimate consumers”.

Short answer questions

Question 1.
What are the types of channels based on goods and services?
Answer:

  1. Consumer Goods Distribution Channels: Fast-moving consumer goods (FMCG) like provision items, clothes, etc. every customer buys to utilize and exhaust them. Next day or week or month fresh purchases need to be made. There are durable goods used by consumers like refrigerators, television, LED bulbs, fans, laptops, etc. They are used continuously for years together.
    The next purchase is made after some years. Further, they need to be installed, serviced, and spare parts for replacement. The retail stores for FMCG goods are far more in number than durable goods retailers. But the distribution channels are the same for both of them.
  2. Industrial Goods Distribution Channels: Industrial machinery and equipment need a shorter channel of distribution. The industries that use the products are less in number. Technical support from the producer or dealer is required for the installation, operation, and maintenance of the machinery. The producer sells the machinery through his salesmen or authorized dealers. MRI – Magnetic Resonance Imaging Scanner used in hospitals to produce images of body structures are sold through authorized dealers or wholesalers to customers.

Question 2.
Write a note on – (i) del-credere agent (ii) Auctioneers.
Answer:
(i) Del-credere Agents: The agent who guarantees to the principal the collection of cash from credit sales is called del- credere agent’. If they do not pay, the agent would bear the loss himself. He is given an additional commission known as del- credere commission for bearing the risk. He carefully selects the buyers to whom credit can be extended based on their honesty and reliability.
(ii) Auctioneers: Auctioneers are agents who sell goods by auction on behalf of their principals. The auction sale is made through a notification to the public. The notice clearly mentions the date, time, place, and details of goods, which will be widely published through newspapers, posters, leaflets, and announcements, etc., Auction sales may be “WITH RESERVE” and “WITHOUT RESERVE”. In the case of auction “WITH RESERVE,” no sale can take place below the minimum price fixed by the seller, which is known as “Reserve Price”. In the case of auction “WITHOUT RESERVE,” the auctioneer is bound to sell the product to the highest bidder. The price for which the bid is accepted is called “knocked down the price”. Striking a hammer on the desk indicates the acceptance of a bid by the auctioneer. After the highest bid is accepted, the auctioneer becomes the agent for both the seller and the buyer. For his services, the auctioneer is entitled to receive a commission, which is a certain percentage of the sale proceeds.

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 3.
Explain the service rendered to the government.
Answer:
Services to the Government are:

  1. Payment of taxes: Retailers collect General Service Taxes and pay them to the Government which leads to an increase in national income.
  2. Helps in Improve the Standard of Living: Retailers help society to improve the standard of living of people and contribute to the economic development of a country.
  3. Implementation of Government Policies and Acts: Retailers implement the government policies and enforcing the acts such as the prohibition of tobacco products, prohibition of child labor, prohibition of adulteration considering common interest.

Question 4.
Explain direct marketing.
Answer:
The manufacturer establishes branches all over the country or in other countries also. The producer first enrolls few consumers. These consumers are asked to bring in more consumers. Various commissions are paid to the senior and junior consumers according to their turnover. All consumers directly purchase from the producer’s branches.

Question 5.
Explain mail-order business or phone order business.
Answer:
The manufacturer collects orders from the consumers through post or mail or phone and delivers the products themselves. Some producers send the catalog of their products directly to the consumers and receive orders over post or phone. Then they distribute goods to the demanding consumers.

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Long answer questions

Question 1.
What are the types of Wholesalers?
Answer:

  1. Manufacturer wholesaler: Manufacturer wholesaler undertakes manufacturing of goods in addition to the wholesale business.
    He Sells not only the goods manufactured by him on wholesale business but also goods manufactured by other producers.
  2. Retail Wholesaler: This type of wholesaler carries on both wholesale and retail trade. He purchases goods in bulk from manufacturers and sells them directly to consumers through his own retail outlets, eg: Super Bazaar.
  3. Merchant Wholesaler: A merchant wholesaler neither manufactures goods nor sells them directly to consumers. He is the ‘wholesaler proper’ or ‘pure wholesaler’. He buys goods in bulk from manufacturers and sells them in small lots to retailers. Merchant wholesalers can be further classified into three categories on the basis of the degree of specialization, (a) General merchandise wholesalers, (b) Single line wholesalers, (c) Speciality wholesalers.
    (a) General Merchandise Wholesalers: This type of wholesaler deals in a wide range of goods such as groceries, electrical equipment, medicines, cloth, etc. The importance of this type of wholesaler has heightened due to increasing specialization in trade.
    (b) Single Line Wholesalers: This type of wholesaler deals in only one line of goods and distributes different brands and varieties of the particular line. For example, a wholesaler may deal in refrigerators produced by different manufacturers.
    (c) Speciality Wholesalers: This wholesaler specializes in a single product. For example, a wholesaler may deal only in Tata tea and
    nothing else.

Question 2.
Difference between factors and brokers.
Answer:

Factors Brokers
Take possession of goods. Do not take possession of goods.
Deals in his own name. Deals on behalf of the owner of goods (principal). ‘
Right to receive payments. Cannot receive payments.
Personally liable for his actions. The principal is liable for his actions.
Remuneration is called commission. Remuneration is called brokerage.
He has a right of lien on goods in his possession for his unpaid charges. He cannot have the right of lien on goods in his possession for his unpaid charges.
He is a general mercantile agent. He is a special mercantile agent.

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

For Own Thinking

1. Students should visit a nearby wholesale trade unit and watch the trading activities held there.
Answer:
Rathna Fan House – T. Nagar. All kinds of fans are available here.

2. Students should visit a nearby two-wheeler showroom and watch which type of channel of distribution followed by them.
Answer:
Manufacturer – middlemen – showroom – customers.

For Future learning

1. Students should know that there will be SOHO (Small Office – Home Office) method that plays an important role.
Answer:
Small office: For. business purposes to open a separate office to use business purposes.
Home office: For business purposes, our home is used as a business office purpose.

2. Students should recognize the importance of online trading and develop them as per the future developments in this field.
Answer:

  1. Importance of online trading and develop online trading.
  2. The fast growth of increasing the population no time to spend for shopping.
  3. So people to sit at home. to order the products which are necessary for their home. So online trading is essential for the fast growth of the population.

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Multiple-choice questions

1. A commission agent is an intermediary involved in:
(a) import trade
(b) entrepot trade
(c) export trade
(d) domestic trade
Answer:
(c) export trade

2. Sale of domestic goods to foreign countries:
(a) import trade
(b) export trade
(c) entrepot trade
(d) retail trade
Answer:
(b) export trade

3. A mercantile agent who guarantees his principal for the collection of dues from the customers to whom credit sales are made:
(a) delcredre agent
(b) commission agent
(c) factor
(d) broker
Answer:
(a) delcredre agent

4. Remuneration given to a broker is called
(a) commission
(b) salary
(c) dividend
(d) brokerage
Answer:
(d) brokerage

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

5. This retail business acts as a universal supplier of a wide variety of products
(a) multiple shops
(b) teleshopping
(c) departmental store
(d) mail-order business
Answer:
(c) departmental store

6. It helps disabled and elderly people:
(a) e-commerce
(b) installment system
(c) teleshopping
(d) multiple shops
Answer:
(c) teleshopping

7. Commission agents play a vital role in marketing:
(a) agricultural
(b) industrial
(c) traders
(d) wholesaler
Answer:
(a) agricultural

8. ……….. is not personally liable for the contracts concluded.
(a) Brokers
(b) Factors
(c) Commission agent
(d) Auctioneers
Answer:
(a) Brokers

9. Channel of distribution means the chain of ………… engaged in the distribution of goods.
(a) wholesaler
(b) retailer
(c) middlemen
(d) all the above
Answer:
(c) middlemen

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

10. The nature and type of product help in determining a decision about the channel of distribution are called:
(a) product factor
(b) market factor
(c) consumed factor
(d) middlemen factor
Answer:
(a) product factor