Intensity of the distribution (market coverage), Marketing Management

Intensity of the distribution (market coverage):

The nature and intensity of the competition in the industry will determine the distribution pattern adopted by a firm. Some firms may adopt an intensive distribution strategy and be indifferent to the multiple brands outlets. Here, these firms aim at getting the highest share from such outlets. Other firms may have the policy of exclusive distribution - insisting that the intermediary deal in no other brand.

Intensive distribution: this alternative involves all the possible outlets that can be used to distribute the product. This is particularly useful in products like soft drinks where distribution is a key success factor. Here, soft drink firms distribute their brands through multiple outlets to ensure availability to the customer. Hence, on the one hand these brands are available in restaurants and five star hotels and on the hand they are also available through countless soft drink stalls, kiosks, sweet marts, tea shops, and so on. Any possible outlet where the customer is expected to visit is also an outlet for the soft drink.

Selective distribution: this alternative is a middle path approach to the distribution. Here, the firm selects some outlets to distribute its products. This alternative helps focus the selling effort of manufacturing firms on a few outlets rather than dissipating it over countless marginal ones. It also enables to firm to establish a good working relationship with the channel members. Selective distribution can help the manufacturer gain optimum market coverage and more control but at a lesser cost than intensive distribution. Both existing and new firms are known to use this alternative.

Exclusive distribution: when the firms distributes its brand through just one or two major outlets in the market, who exclusively deal in it and not all competing brands, we say that the firm is using an exclusive distribution strategy. This is a common form of the distribution in products and brands that seek a high prestigious image. Typical examples are of designer ware, major domestic appliances and even automobiles. By granting exclusive distribution rights, the manufacturer hopes to have control over the intermediaries' price, promotion, credit inventory and service policies. The firm also hopes to get the benefit of aggressive selling by such outlets.

Posted Date: 9/19/2012 7:27:03 AM | Location : United States







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