Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Entrepreneurial Planning

Question:

'Cut out the middle man' refers to which type of channel of distribution.

Options:

Zero level

One level

Two level

Three level

Correct Answer:

Zero level

Explanation:

The correct answer is option (1) - Zero level. "Cut out the middle man" refers to the "Zero level" channel of distribution. In a zero-level channel, the product moves directly from the manufacturer to the consumer without the involvement of intermediaries or middlemen. This is also known as a direct distribution channel.

Producer-customer (Direct channel-zero level): This is the simplest and shortest channel in which no middlemen is involved and producers directly sell their products to the consumers. It is fast and economical channel of distribution. Under it, the producer or entrepreneur performs all the marketing activities himself and has full control over distribution. A producer may sell directly to consumers through door-to-door sales persons, direct mail or through his own retail stores. Big firms adopt this channel to cut distribution costs and to sell industrial products of high value. Small producers and producers of perishable commodities also sell directly to local consumers.