In business, distribution strategies are the process of making a company’s product or service available to consumers either directly, through means such as an online website, an actual storefront, or the dreaded telemarketer, or indirectly, through multiple resellers.
Important to the process are channels and intermediaries. Intermediaries are organizations and individuals that are involved with making the product or service available for consumer consumption. Channels are sets of these intermediaries, classified by how many there are between the producer and the consumer of a particular good or service. Oftentimes, most organizations will use a mix of several different channels, so that they can reach a larger potential consumer base.
There are three different types of distribution strategies, a progression that depends on how many intermediaries are used.
Different Distribution Strategies:
1. Intensive Distribution
A distribution strategy that sees a business’s product sold in as many outlets as possible; it is used primarily for goods that are appeal to a broad range of consumers, such as basic supplies, magazines, and snack foods.
2. Selective Distribution
This distribution method relies on fewer intermediaries, while still maintaining a respectable amount, and is used primarily for more specialized goods, such as automobiles and computers.
3. Exclusive Distribution
A strategy wherein a business selects a limited few intermediaries as partners; oftentimes these intermediaries will sell only that business’s products to the exclusion of everything else. This distribution strategy is typical of high end, luxury products, like sports cars and designer clothes.