Distribution is the process by which products move from manufacturers to consumers. It involves decisions about how and where goods will be made available. Businesses develop distribution strategies to ensure products reach their intended market. These strategies are often categorized by the breadth of market coverage they aim to achieve.
Understanding Intensive Distribution
Intensive distribution, also known as parallel distribution, aims to make a product available in as many retail outlets as possible. This strategy maximizes market exposure and consumer convenience. Products using this approach are low-cost, frequently purchased items consumers expect to find readily available.
Examples include soft drinks, chewing gum, newspapers, and snack foods, found in supermarkets, convenience stores, vending machines, and gas stations. The primary goal of intensive distribution is to achieve high sales volume through widespread availability. This approach relies on impulse purchases and consumer accessibility to drive market penetration.
Exploring Exclusive and Selective Distribution
In contrast to intensive distribution, exclusive and selective distribution strategies limit the number of outlets where a product is sold. This approach allows businesses to maintain greater control over their brand image and customer experience. These strategies are often chosen for products that require specialized sales support or a particular retail environment.
Exclusive distribution involves selling a product through only one designated retail outlet within a specific geographic area. This strategy is common for luxury goods, high-end automobiles, or designer fashion, where maintaining brand prestige and personalized customer service are important. The limited availability reinforces the product’s premium status and allows for specialized training for sales staff.
Selective distribution falls between intensive and exclusive, involving the use of a moderate number of retail outlets. This strategy allows for broader market coverage than exclusive distribution while maintaining control over the brand’s presentation. Products like appliances, certain clothing brands, or electronics utilize selective distribution, appearing in specific department stores or specialized retailers. This approach balances market reach with a consistent customer experience and product support.
Factors in Distribution Strategy
Businesses consider several factors when deciding on a distribution strategy. The type of product plays a role, with convenience goods favoring intensive distribution and specialty goods leaning towards exclusive channels. A company’s desired brand image and market positioning also influence this choice, as luxury brands opt for limited availability to maintain exclusivity.
The target market’s characteristics, such as shopping habits and expectations, guide channel selection. The level of control a company wishes to exert over pricing, sales, and service impacts the decision. Financial costs and resources required to manage widespread versus limited distribution networks are significant considerations.