Distribution strategy cutting edge distribution strategies 2020. Channel strategy distribution intensity intensive distribution aims to achieve saturation coverage of the market by using all available outlets selective distribution a producer uses a limited number of outlets in a geographical area to sell its products exclusive distribution only one wholesaler, retailer or industrial distributer is used in a. Some of the important types of distribution in international market are 1. In a direct channel or route, there are no middlemen and marketing. The aim of intensive strategies is to broaden the market share and to increase the profit. This marketingwit post highlights the advantages and disadvantages of intensive distribution. In general, there are three basic retail distribution strategies. This is so because the manufacturer tries to distribute their product to every outlet possible. The choice of how to distribute a product is an important aspect of a business marketing strategy.
Intensive distribution strategy of pepsi cola pepsico, a world leader in convenient snacks, foods and beverages, has a plan that places their soft drinks. This policy is used when the manufacturers make a decision to distribute their products through as many mats as possible. Yet apple has full control over the customer experience and control over a distribution strategy requires massive resources. Under the intensive distribution strategy, all the possible outlets can be used by a company to distribute the product. Hence the complete push is towards vast distribution of the product due to which the intensive distribution strategy is used. They are market penetration, market development, product development and diversification. Intensive distribution strategy is widely used by worldleading organizations. Manufacturers of products like soap or toothpaste employ an intensive distribution strategy. That is also why apple keeps expanding its stores worldwide. An effective distribution strategy would be key for nike.
A mix of globalization and diversification in the fashion market. A presentation about the distribution strategies exclusive, intensive and selective distribution. Distribution channels can be also defined as marketing channels or market channels. A distribution strategy is a plan to reach customers with goods and services.
Distribution intensity plays a significant role in marketing channel strategy. Intensive strategies those three strategies are sometimes referred to as intensive strategies because they require intensive efforts if a firms competitive position with existing products is to improve. While an extensive distribution strategy initially sounds like a good idea, it requires a plethora of resources to execute, not making it a suitable choice for small businesses. Distribution intensity exclusive distribution selective distribution. Intensive efforts are needed to employ when intensive strategies are exercised by the organization. In this post, we will tell you everything you need to know about product distribution, from different distribution strategies to who is who in the industry, so you can refine your own distribution strategy to achieve peak performance on the shelf.
In other terms, an intensive distribution strategy is a plan that places products in many different locations for distribution. Intensive distribution advantages and disadvantages. Intensive distribution means that as may available outlets as possible hold this product, e. Starbucks coffees generic and intensive growth strategies. The fore researchers reported that distribution strategy has intensive impact on other marketing features. It is common for firms to adopt multiple distribution channels to reach customers in convenient ways. The intension of this method is usually to make the manufacturer. When the company is having a mass marketing product, then it uses intensive distribution. Mostly furniture, television and home appliance brands are distributed in this. Know the advantages and disadvantages of intensive.
Soft drinks and cigarettes are some of the examples on which intensive distribution is followed. A distribution strategy that utilizes multiple delivery channels and a high distribution volume to reach as many potential customers as possible. There are four intensive strategies for a brands growth and market expansion. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
Compare and contrast marketskimming and marketpenetration pricing strategies and discuss the conditions under which each is appropriate. Intensive distribution is a marketing strategy that places an abundance of products in many retail. Below is a discussion of the intensive strategies used by coca cola to grow its market and sales. The functional aspect of the distribution channel is seen as a way to connecting and. Selective distribution the producer relies on a few intermediaries to carry their product. While selecting the right distribution channel, marketers use. Intensive distribution used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks. Pdf selective distribution by luxury goods suppliers. Intensive distribution the producers products are stocked in the majority of outlets. A marketing strategy under which a company sells through as many outlets as possible, so that the consumers encounter the product virtually everywhere they go. The importance of distribution channels is analysed both for individual economic operators, i. We may also said that when an organization struggles to improve its competitive position with the current products then different types of intensive strategies should be considered.
Place is considered in case of products as well as services. We explained why selective distribution agreements limiting internet sales should be. Intensive distribution financial definition of intensive. Choosing a distributor is a proven way that helps in the growth of your business and vital to attain targets. Virtually, a customer will be able to find the product everywhere he goes.
The rapid growth of logistics distribution highlights the problems including the imperfect infrastructure of logistics distribution network, the serious shortage of distribution capacity of each individual enterprise, and the high cost of distribution in china. An extensive distribution strategy is often used in an attempt to achieve market penetration by making information about a product or product line, as well as the product. A distribution channel is a group of dependend on each other organisation units, which are taking part in process of flow of producst or services form producers to buyers. Essentials of production and operations management, 4th edition. What is intensive distribution and its advantage in business. Recommendations for the distribution strategy in changing market environment. You can read this detailed article on intensive distribution. Intensive strategies include the following strategies.
Super markets, gas stations, and even clothing stores. Soft drinks is even one of the examples used for intensive distribution in the text. Managing the companys distribution system world scientific news. But, before deciding to implement the strategy into our own companies, its essential to determine, whether our resources are enough to pull it out because financial problems may restrict our business from further development. Soft drinks are generally made available through intensive distribution. European journal of business and innovation research vol.
These types of analyses start with the share of big firms and groups, both on national and international levels. Starbucks also uses its intensive growth strategies to support expansion, although its focus is on market penetration. It represents the level of international availability selected for a particular product by the marketer. While this is a critical part of amazon distribution strategy, it is also quite expensive. International marketing, distribution strategy, channels of distribution. Know the advantages and disadvantages of intensive distribution. Why do companies opt for an intensive distribution strategy.
Selective distribution involves using more than one, but lesser than all the intermediaries and distributors who carry the companys products on a basis of a company specific set of rules. Selective distribution is a type of distribution strategy that lies and operates between intensive and exclusive distribution. Selecting the right distribution strategy is a pivotal decision that could either steer your business to success or plunge it down. This means that the organization does not introduce new or modified products rather the products remain the same but the new markets are added by entering into new. This is also the reason why place which majorly consists of distribution is one of the major 4ps of the marketing mix. The selective, intensive or exclusive distribution strategy adopted by a company plays decisive role for channel width. For a wide variety of products where sales have a direct link to the number of outlets used, this is a winning strategy. Intensive strategies are those strategies, which demand further more intensive efforts to improve the performance of existing products in the market. There are also more nuanced types of distribution that fall into these categories intensive, selective and exclusive distribution. The cocacola companys distribution strategy marketing. Choosing a retail distribution strategy delrecruiters. Analyzing nikes distribution channels and retail strategy.
The elaboration of logistic and distribution strategies florea vlad. Learn how businesses use exclusive distribution to market its products. Depending on the type of product being distributed there are three common distribution strategies available. While the development of sharing economy makes it possible to achieve the integration of whole social logistic resources, big data. Although sales to wholesalers accounted for about 68% of nikes global revenues in fiscal. Intensive distribution focuses on delivering a firms goods to as many storefronts as possible and maximizing the amount of sales to pursue scale economies. This strategy serves well for convenience goods, snack foods, soft drinks, newspapers, etc. Distribution channels are grouped into two major groups. Chapter 11 and 12 questions chapter 11 discussion questions 1, 3, 5 1. To make the product available to the target audience, companies use distribution channels. Products that are used every day and replaced often may be found in dozens of different retail outlets in any given area. Intensive distribution is whereby the manufacturers make use of more than one channel to distribute their products and reach the target audience or customers.
This strategy is common for massproduced products such as basic supplies, snack foods, magazines and soft drink beverages. Abstract the efficient distribution strategy formulation becomes vital to the success and survival of any organization, especially when it is involved in international trade. Market development strategy is the kind of intensive strategies in which the business organization launches its existing products in the new markets or geographical areas. Typical fmcg and consumer durable products are best example of intensive distribution strategy.
Intensive distribution occurs when a business neglects market segmentation and instead, focuses on supplying their product to every accessible market. Intensive distribution floods the market with products by selling them using any and all available outlets. Intensive distribution places the goods or services in as many outlets as possible. Intensive strategy definition types of intensive strategies. Intensive distribution is a form of marketing strategy under which a company tries to sell its product from a small vendor to a big store. Distribution channel, intensive, selective, exclusive, strategy, manufacturer. Firms can opt for intensive, selective, and exclusive strategies.
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