10 Questions
What is the purpose of selling through a reseller?
To reduce the pressure of running a distribution system.
What is a potential disadvantage of selling through resellers?
Losing personal contact with customers.
What requirement may resellers have before handling a product?
Year-round availability of the product for distribution.
How does intensive distribution affect pricing?
It often necessitates lowering prices to reach more markets.
Which type of market coverage aims for the widest distribution possible?
Intensive distribution
What is a potential disadvantage of selective distribution?
Limited market coverage
How does intensive distribution impact availability?
It increases availability across various locations.
What is a key consideration for selecting a market coverage strategy?
Maximizing market presence
What is an outcome of resellers requesting products under their own brand?
Loss of brand recognition
Why might a business consider selling through intermediaries despite production constraints?
To expand market reach through the intermediaries' network
Study Notes
Distribution Strategies
- Intensive distribution: used for low-priced products or impulse purchases, where products are stocked in as many sales outlets as possible, including traditional and non-traditional markets.
- Exclusive distribution: involves limiting distribution to a single outlet, typically for high-priced products that require detailed sales efforts, and may involve exclusive sales agreements with intermediaries.
- Selective distribution: involves selecting a small number of retail outlets to distribute products, often used for products that require a large geographical spread, such as computers and household appliances.
Market Coverage
- Market coverage refers to the width or variety of product distribution, applying to both direct sales and intermediaries.
- Intensive distribution: aims to achieve the widest distribution possible, often requiring lower prices.
- Selective distribution: selects a limited number of retail outlets to distribute products, allowing for more focused sales efforts.
- Exclusive distribution: restricts distribution to a single outlet, enhancing the product's prestige and exclusivity.
Selling Through Intermediaries
- Selling through intermediaries, such as retailers or wholesalers, can increase product distribution and reduce pressure on the distribution system.
- Intermediaries may request product exclusivity, specific supply flows, and year-round product availability.
- Selling through intermediaries can lead to loss of personal contact and company identity with customers.
- Resellers may request product branding under their own label.
Discover how intensive distribution is used to distribute low-priced products or impulse purchases in the market. Learn about stock-up strategies by drug companies in various sales outlets, including traditional and non-traditional markets.
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