Strategic distribution refers to how an organization will distribute the product or service they are offering to the end user. The organisation must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organisation is to meet its overall marketing objectives. If an organization underestimate the demand and customers cannot purchase products because of it, profitability will be affected.
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ME.S advises companies with regard to direct, as well as indirect distribution networks:
- Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.
- Direct distribution involves distributing direct from a manufacturer to the consumer The advantage of direct distribution is that it gives a manufacturer complete control over their product.
Depending on the type of product being distributed there are three common distribution strategies available:
- Intensive distribution Used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.
- Exclusive distribution Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.
- Selective Distribution A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.