What is the Best Distribution Strategy?

In the world of retail and selling a service, it always comes down to successful sales in the end. You can set everything perfectly in the meeting room, set up a perfect marketing strategy, and have customers line up to buy, but if you don’t provide the perfect distribution strategy, you won’t maximize the sales.

Although distribution is probably the last part of the business chain it is arguably the most important of them all. It needs complete dedication by the decision-makers in a company. Without it, you won’t have the chance to see perfect results from your sales initiative.

In this article, we’re going to dedicate ourselves to explaining why this is important and we’ll try to explain more about the value of the three different strategies. We will explain every distribution strategy separately and let you decide which one is best for you. Follow up and see more about it!

1. Exclusive

The exclusive strategy is almost always used by glamorous brands that are trying to form an idea of uniqueness. This one is chosen by brands and companies that have an exclusive product and they’d like to sell it only through their own retail stores.

This type is excellent for those who think that not mingling with other products will bring them the best value. What these companies do is set up a chain of their own stores and sell their products exclusively there. For example, if you walk into a Gucci store, you surely won’t find someone else’s brand’s products there.

Instead, you’ll find various models of sunglasses, bags, and other products that are made by them and sold to people who know why they came to their store. They sell exclusively Gucci products, which is why this distribution strategy is called exclusive.

This type raises brand awareness and brand value. The fact that Lamborghini isn’t selling their cars elsewhere raises its value. You won’t find these vehicles in a parking lot with used cars. It’s a classic and exclusive product that can only be found in their car shops. See more about it here.

2. Intensive

The intensive distribution strategy is usually used by product brands that are normal for everyone to buy on their way to the grocery store. The name suggests that products are going to be available wherever you go, from small shops to big supermarkets.

This strategy is used by soft drink companies, cigarettes, snacks, candies, and other types of similar products. For example, you can be sure that you’ll find Pepsi whichever store you walk in. Right next to it, you’ll find Pringles.

These are the types of products which customers are hardly going to drive for miles to walk in an exclusive store to buy them. Spending a dollar or two on these products makes it not affordable for a user to go especially for them somewhere and the distributors are aware of it.

Instead of having them sold at one place, they distribute the product intensively across the city, state, country, and even the world. All retailers selling different things will have them on the shelves. That way, customers can be sure that they’ll find them wherever they go, which strengthens brand awareness and maximize sales.

3. Selective

Something in the middle of the previous two distribution strategies is the selective one. When brands and companies are trying to get their products out there, but don’t like to have it literally everywhere, or they want to keep a certain amount of exclusiveness, then they choose the selective distribution.

This way, they are going to get their products to stores across the world that will be exclusive retailers for them in that region. For example, you can find Nike products wherever you go around the world, but you won’t find them in literally any sports store you walk in.

Instead, you can only find them in some places that the manufacturer previously agreed with the retailer that their products are going to be available there. Opening the web store of Nike, and going through their website will show you where you can find Nike shoes in a particular part of the world.

If you live in Groningen, Holland, then you’ll see on the map on their page which stores have them in stock. That way Nike gets an exclusive distribution of their products, and at the same time, they can be distributed across the world and available everywhere. 

Conclusion

As you can see, all three strategies have their pros which is why manufacturers choose them. It depends on the type of the product and the strategy of the company which one they will choose. It’s common for companies to change their strategy on the way, but it takes a lot of meetings until they find a perfect solution. See more about changes here: https://en.wikipedia.org/wiki/Distribution_(marketing)#Channel_switching