The Indian retail market is very fragmented with many small independent stores. The distribution structure in India typically involves two levels of distributors (large regional wholesalers and smaller city-wide wholesalers). All of these lead to a long distribution channel. Homer Products is concerned about India's long distribution channel for its products. What is a drawback of longer distribution channels that could affect Homer Product's decision?
A) higher profit margins
B) inability to enter exclusive distribution channels
C) lower selling costs in a concentrated retail sector
D) lower product prices
E) greater aggregate markups

Question

Quizplus · Accepted Answer

Longer distribution channels often involve multiple intermediaries, each adding their own markup, leading to greater aggregate markups and potentially higher final prices for consumers.

The Indian Retail Market Is Very Fragmented with Many Small