Which of the following is true about fragmented retail systems?
A) The more fragmented the retail system, the more economical it is for a firm to make contact with each individual retailer.
B) Countries with fragmented retail systems tend to have short channels of distribution.
C) A relatively small sales force is required to deal with a fragmented retail sector.
D) It makes economic sense for the firm to sell to the wholesalers and the wholesalers to deal with the retailers.
E) The sales orders generated from each sales call is more than that in a concentrated retail system.

Question

Quizplus · Accepted Answer

In fragmented retail systems, it is often more economical for a firm to sell to wholesalers who can then deal with individual retailers. This is because the number of retailers is often too high for a firm to make contact with each one individually, and wholesalers can help to aggregate demand and reduce the complexity of the distribution system. Therefore, option D is the correct answer. The other options are incorrect because there is no clear relationship between the degree of fragmentation in a retail system and factors such as the size of the sales force, the length of the distribution channels, or the magnitude of sales orders.

Which of the Following Is True About Fragmented Retail Systems