The products that are sold out intensively are usually low priced or impulse purchase products. In the intensive distribution strategy, the seller’s unit costs for stocking the products are low and the ease for consumers is also seen as a critical part. The idea behind this strategy is that by making all the products readily available in the market is to boost more sales. The customers are not targeted based on their specific demographic segment necessarily. The intensive distribution becomes appropriate for products like chewing gum, bread, candy bars, soft drinks, salt, soaps etc where the key factor behind the purchasing decision is convenience.
What is Intensive distribution | MBA Tutorials
Determining whether or not an intensive distribution strategy is the best strategy to employ is often dependent on factors such as organizational resources or the availability of retail locations. For example, companies with limited resources (anything from financial resources to the ability to produce enough products) may not have the capacity to support an intensive distribution strategy. Large stores, such as Wal-Mart or Target, are often hard for companies to get their products into, which could limit a company's ability to distribute its products.
Intensive Distribution : SAGE Knowledge
So, why would a supplier use an intensive distribution strategy? To answer this question let's look at the advantages and disadvantages of intensive distribution.
What is intensive distribution?-Alibaba Trade Forums
Distribution opportunities. First of all, we must consider what is realistically available to each firm. A small manufacturer of potato chips would like to be available in grocery stores nationally, but this may not be realistic. We need to consider, then, both who will be willing to carry our products and whom we would actually like to carry them. In general, for convenience products, intense distribution is desirable, but only brands that have a certain amount of power—e.g., an established brand name—can hope to gain national intense distribution. Note that for convenience goods, intense distribution is less likely to harm the brand image—it is not a problem, for example, for Haagen Dazs to be available in a convenience store along with bargain brands—it is expected that people will not travel much for these products, so they should be available anywhere the consumer demands them. However, in the category of shopping goods, having Rolex watches sold in discount stores would be undesirable—here, consumers do travel, and goods are evaluated by customers to some extent based on the surrounding merchandise. (Please see the chart in the PowerPoint notes).Channel Strategy: Marketers face several strategic decisions in choosing channels and marketing intermediaries for their products. Selecting a specific channel is the most basic of these decisions. Marketers must also resolve questions about the level of distribution intensity, the desirability of vertical marketing systems, and the performance of current intermediaries. Marketing Channel Selection Marketing channel selection can be facilitated by analyzing market, product, producer, and competitive factors. Distribution Intensity Distribution intensity refers to the number of intermediaries through which a manufacturer distributes its goods. The decision about distribution intensity should ensure adequate market coverage for a product. In general, distribution intensity varies along a continuum with three general categories: intensive distribution, selective distribution, and exclusive distribution. Intensive Distribution An intensive distribution strategy seeks to distribute a product through all available channels in an area. Usually, an intensive distribution strategy suits items with wide appeal across broad groups of consumers, such as convenience goods. Selective Distribution Selective distribution is distribution of a product through only a limited number of channels. This arrangement helps to control price cutting. By limiting the number of retailers, marketers can reduce total marketing costs while establishing strong working relationships within the channel. Moreover, selected retailers often agree to comply with the company’s rules for advertising, pricing, and displaying its products. Where service is important, the manufacturer usually provides training and assistance to dealers it chooses. Cooperative advertising can also be utilized for mutual benefit. Selective distribution strategies are suitable for shopping products such as clothing, furniture, household appliances, computers, and electronic equipment for which consumers are willing to spend time visiting different retail outlets to compare product alternatives. Producers can choose only those wholesalers and retailers that have a good credit rating, provide good market coverage, serve customers well, and cooperate effectively. Wholesalers and retailers like selective distribution because it results in higher sales and profits than are possible with intensive distribution where sellers have to compete on price. Exclusive Distribution Exclusive distribution is distribution of a product through one wholesaler or retailer in a specific geographical area. The automobile industry provides a good example of exclusive