Distribution Strategy

Distribution Strategy: Exclusive, Selective, Intensive

Distribution strategy refers to the approach and decisions made by a company regarding how its products or services will reach customers. It involves selecting the appropriate distribution channels and determining the level of market coverage desired. Here are the three main distribution strategies:

Exclusive Distribution:

Exclusive distribution involves limiting the number of intermediaries or retailers authorized to sell a product or service within a specific geographic area. This strategy is often used for high-end or luxury products, where maintaining brand image and control over the sales process is crucial. By granting exclusivity to selected retailers, companies can ensure a higher level of customer service, brand consistency, and premium pricing. Exclusive distribution may result in lower market coverage but can create an aura of exclusivity and enhance the perception of a product's value.

Example: Luxury fashion brands that only sell their products through selected high-end department stores or boutique stores.

Selective Distribution:

Selective distribution involves working with a limited number of intermediaries or retailers that meet specific criteria. The selection process considers factors such as geographical location, reputation, customer base, and capabilities. This strategy allows companies to maintain some control over the distribution process while reaching a wider market compared to exclusive distribution. Selective distribution is commonly used for products with moderate demand and where maintaining a certain level of brand image and customer experience is important.

Example: Electronics manufacturers that work with authorized retailers and online marketplaces to sell their products.

Intensive Distribution:

Intensive distribution aims to make a product or service available through as many outlets as possible, maximizing market coverage. This strategy is commonly used for low-priced, frequently purchased, or widely consumed products. By distributing products widely across multiple channels, companies can reach a larger customer base and maximize sales opportunities. Intensive distribution often requires close collaboration with various retailers and wholesalers to ensure widespread availability.

Example: Consumer goods such as soft drinks or snacks that are available in numerous convenience stores, supermarkets, and online platforms.

The choice of distribution strategy depends on factors such as product characteristics, target market, competitive landscape, and company objectives. Some companies may employ a combination of distribution strategies for different products or market segments. It is essential to regularly evaluate and adapt the distribution strategy to meet changing customer preferences, market dynamics, and technological advancements.

References:

Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.).

Armstrong, G., & Kotler, P. (2019). Marketing: An Introduction (14th ed.).

Jobber, D., & Ellis-Chadwick, F. (2019). Principles and Practice of Marketing (8th ed.).