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Selective Distribution: Concept, Strategy and Examples

Updated: May 28, 2021

Distribution plays a major role in one’s marketing strategy, and this is more so because unless and until your distribution is top-notch, the product won’t reach your desired consumers.

But did you know, even within the broader purview of distribution, we have various types?

These types are decided based on multiple parameters, like the product being distributed, what is the target consumer-like, is it targeting the masses or has specific needs?

There are three main types of distributions, namely, Exclusive, Intensive, and Selective.

While this blog post is focused on understanding selective distribution in-depth, we will also get a basic understanding of the other two types.

Let’s start with Exclusive distribution, as the name suggests, for this type of distribution, the company has only one dealer or retailer in a specific locality.

This works well for premium brands because it can help them provide more exclusivity, even concerning the consumers.

One of the best examples, for exclusive distribution, can be a Mercedes Car showroom, you don’t have multiple of them in an area, that’s because the exclusivity factor is a must when it comes to a premium brand like a Mercedes.

Next, we have Intensive distribution, for this one, the product has to target the masses, because these products are the kind that works on the premise of ‘more availability will lead to more sales.

Intensive distribution is used for products that lack consumer loyalty, if you don’t get a brand X product, you are willing to buy a brand Y product.

Now let’s get into the main topic of the blog post, which is Selective Distribution, this is an interesting one and hence the much need emphasis.

This blog post will cover the following areas under Selective Distribution:

1. What is Selective Distribution?

2. Strategy behind choosing Selective Distribution

3. Advantages and Disadvantages of Selective Distribution

4. Examples of Selective Distribution

Let’s start with the first one,

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1. What is Selective Distribution?

Selective distribution is a type of channel distribution where a company or a brand chooses a certain set of outlets through which they can further make their products available to the consumers.

So as per our understanding of exclusive and intensive distribution, selective distribution is a different ball game, because it doesn’t have a lot of outlets, or just a single outlet.

In selective distribution, some outlets are chosen based on their potential profits, and they are given the rights to stock and sell the offerings of the company.

The dealers under selective distribution may not necessarily be obliged to store only one brand of products, but this depends.

Selective distribution may help the company more because selective outlets can help them filter out the outlets based on the profitability parameters.


Related Content: What are Buyer Personas and how can your business use them?


2. Strategy behind choosing Selective Distribution

A company usually opts for this type of distribution when they wish to choose outlets based on specific locations.

It can help a manufacturer because they can also add various filters concerning the price point that they can offer.

For the consumer, it is beneficial because they have access to specific outlets for some products.

As against an exclusive distribution, this one provides more visibility to the brand than might be the need of the hour.

And unlike an intensive distribution, this can provide the much need exclusivity in comparison.

3. Advantages and Disadvantages of Selective Distribution

Let’s delve in deeper and understand the advantages and disadvantages of Selective Distribution.


Advantages:

1. Perfect Market Coverage

You can decide on the outlets that provide maximum coverage and profits in a given market.

So it acts as the perfect alternative for companies to even experiment and check what works the best for sales and visibility of the product for sales.


2. Satisfaction for Consumer

Since selective distribution takes into account a limited number of outlets, there is a high

possibility that consumers might get good service.

They can experience the best form of customer service because each customer will receive much-needed attention from the retailer.


3. Improved Communication

Manufacturers can help keep a track of the outlets since they are limited in numbers, this then ensures better and smooth communication for proper functioning.

This also ensures a stronger brand image that acts as a huge add-on in the long run.


Related Content: What is Alliance Marketing?


Disadvantages:

1. Limited Market Penetration

While you may receive the optimum market coverage, but it may still be restrictive in nature.

Because the available outlets are still limited, so there may be certain areas where your distribution is not available but consumers may be interested in your offering.


4. Examples of Selective Distribution

To understand Selective Distribution in a better manner, let’s use some examples

1. Cars

While exclusive distribution may happen for a very high-end brand range car, selective distribution is more so in the case of premium or mid-range but not luxury cars.

Selective distribution in this may be brand-specific, like Maruti showrooms that only display brand-specific cars.

Or it can also be for a showroom that takes into account cars from various brands together.


2. Clothing

If you take the example of clothing, certain brands sell their products only out of specific outlets.

Like Zara will only sell their own offering through the outlets, whereas Raymond may have selective distribution.

They sell their products through specific outlets as well as franchise outlets, which ensures the availability to be at the peak.


3. Watches

The best example under the category of watches is that of Titan, now while Titan may have an exclusive outlet, to sell specific offerings.

Their products may be available elsewhere too, through other shops that sell watches.

But the best part about titan is that they ensure selective distribution among various ranges of the products.

The high-end models of the watches may be available only at Titan outlets, whereas other models may have the selective distribution model.


Conclusion:

Your marketing efforts will be useless unless you are able to incorporate the right kind of distribution strategy.

Selective distribution can prove to be really effective if utilized perfectly.


Also Read: What is Scarcity Marketing?



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