Exclusive, Intensive, Selective Distribution
Posted by siixzJan 14
Exclusive Distribution
Whereby suppliers make agreements with one or a few retailers that designate the latter retailing as the only ones in specified geographic areas to carry certain brands or products.
This stimulates both parties to work together to maintain an image, assign shelf space, allot profits and costs, and advertise. It also usually requires that retailers limit their brand selection in the specified product lines; they might have to decline to handle other suppliers’ brands. From the manufacturers’ perspective, exclusive distribution may limit their long-run total sales.
Intensive Distribution
Whereby suppliers sell through as many retailers as possible.
This often maximizes suppliers’ sales and lets retailers offer many brands and product versions. Competition among retailers selling the same items is high; and retailers may use tactics not beneficial to individual suppliers, as they are more concerned about their own results. Retailers may assign little shelf space to specific brands, set very high prices on them, and not advertise them.
Selective Distribution
Suppliers sell through a moderate number of retailers. This combines aspects of exclusive and intensive distribution. Suppliers have higher sales than in exclusive distribution and retailers carry some competing brands. It encourages suppliers to provide some marketing support and retailers to give adequate shelf space.
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