Question

Lazario Motor Car Company produces some of the most luxurious and expensive cars in the world. The company typically authorizes only a single dealership to sell its cars in certain major metropolitan areas. In less populous areas, Lazario authorizes a single dealer for an entire state or region. The manufacturer of Lazario automobiles is using a(n) ___________ distribution strategy for its product.

A. intensive
B. primary
C. extrinsic
D.exclusive

Answer 1

The correct answer is D.exclusive.

Step-by-step explanation:

Exclusive distribution refers to a commercial agreement between a producer and a distributor that states that the former will only sell his products to the latter if he agrees not to sell competing products.

Exclusive distribution can take different forms. One of the most used ways is that the retailer or distributor undertakes to sell only and exclusively the product of a certain manufacturer or producer while it is committed to use only this distributor as its sales channel.

Another alternative of agreement, although less used, is that the distributor is obliged to buy all the units of a certain product from its manufacturer.

The exclusive distribution agreement is not necessarily expressed in a formal and written contract, although this happens in many cases, in others it is only a word agreement between the parties.