January 30, 2024

When Do Marketers Use Intensive Distribution?

There are a variety of factors that influence what type of distribution a company uses. Some of the most important include target market coverage and budget. For example, a small local bakery may only be able to sell its products in a limited number of outlets, while Kohlberg & Company (the owner of the Sara Lee and Thomas’ brands) can afford to distribute its brand offerings through many different retail locations.

Intensive distribution involves selling a product in all possible outlets, including large chains, small mom-and-pop stores, supermarkets and even convenience stores. Companies that choose this strategy want their products to be readily available to consumers. This allows them to increase brand awareness and sales volume, and it also helps to reduce costs by increasing production efficiencies and lowering unit prices.

In contrast, selective distribution focuses on cherry-picking distributors, wholesalers and retailers in order to reach a targeted audience. This strategy is particularly useful for luxury goods or products that benefit from a high-end image, such as salon-quality haircare products sold through only hairdressers and barbers.

Choosing between intensive, selective and exclusive distribution depends on what the manufacturer is trying to achieve. Intensive distribution maximizes market coverage, but it can be expensive and requires close monitoring of sales data in order to keep expenses under control. Selective distribution offers better control and optimum market coverage but at a lower cost than intensive distribution. In between these two strategies, there is an option known as effective distribution which involves concentrating the selling effort of a manufacturing firm over a few outlets that account for a significant portion of the market potential.

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