"ABC Ltd. sells products through company-approved retailers." Identify the type of channel of distribution in this case.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → One level Channel
Option (1) Zero level Channel — Incorrect. In a zero level (direct) channel, the maker sells straight to the customer with no middleman. ABC Ltd. uses retailers, so this is not direct.
Option (2) One level Channel — Correct. ABC Ltd. sells through company-approved retailers. So there is only one middleman, the retailer, between the maker and the customer: Manufacturer → Retailer → Customer. This is a one level channel. For example, Maruti Udyog sells its cars and vans through company approved retailers.
Option (3) Two level Channel — Incorrect. A two level channel has two middlemen: Manufacturer → Wholesaler → Retailer → Customer. No wholesaler is mentioned here.
Option (4) Three level Channel — Incorrect. A three level channel adds an agent before the wholesaler: Manufacturer → Agent → Wholesaler → Retailer → Customer.
Note: The levels of channels of distribution are not there in the latest NCERT textbook (2026-27). They were there in the pre-rationalised NCERT, and hence this question has been picked from the pre-rationalised NCERT. NCERT (Pre-rationalised Edition):
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