Question : Which of the following statement is correct?
Statement 1: Manufacturers goodwill does not affect the selection of channel of distribution.
Statement 2: A company which has a strong financial base can evolve its own channels.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Correct Answer: Statement 1 is false and statement 2 is true.
Solution : Manufacturers Goodwill affects the selection of channel distribution. Manufacturer enjoying good reputation need not depend on the middleman as he can open his own branches easily. A company which has strong financial base can evolve its own channels on the other hand financially weak companies would have to depend upon middleman.
Hence, option D is correct.