Definition
Intensive distribution is a marketing strategy where a company aims to distribute its products or services as widely as possible in the market. The goal is to have the product or service available in as many outlets as possible so it’s easily accessible to consumers. This strategy is often used for convenience products such as soft drinks, newspapers, or candies.
Key Takeaways
- Intensive Distribution is a marketing strategy where a company aims to distribute its products or services as widely as possible. This means making the product available in every outlet where potential customers might want to buy it.
- Commonly used by businesses selling convenience products like fast moving consumer goods, the strategy seeks to achieve maximum marketplace coverage and consumer convenience, which subsequently results in high sales volume.
- While this strategy guarantees a broader market reach, it comes with downsides such as higher distribution costs and a potential devaluation of the brand due to saturation. Therefore, businesses must carefully consider their brand identity, target market, and product type before implementing an intensive distribution strategy.
Importance
Intensive distribution is a significant term in finance because it plays an integral role in a company’s market strategy intending to avail the product or service to as many potential consumers as possible. This strategy focuses on maximum product exposure, improving brand visibility, and increasing sales volume.
By utilizing multiple channels such as online platforms, brick-and-mortar retailers, and wholesale distributors, a company can ensure its product is widely accessible thus improving the likelihood of impulse purchasing. For consumers, it provides convenience as they can find the product almost everywhere.
While the strategy could increase the operational costs due to the extended distribution network, the potential for higher sales volume can offset these expenses leading to sustainable financial growth. Therefore, understanding and effectively implementing the concept of intensive distribution is important to a company’s financial success.
Explanation
Intensive distribution, in the realm of finance and marketing, is primarily aimed at maximizing product availability by ensuring it’s on the shelves of as many outlets as possible. It is a marketing strategy used by businesses that are looking to saturate the market with their product.
This way, companies can reach the highest number of potential customers, have a broad geographic spread, and increase chances of sales. For instance, this strategy is commonly seen in the distribution of everyday consumable goods like soft drinks, snacks, and cigarettes, where availability at every possible retail location ensures higher visibility and impulse purchases.
The main purpose of intensive distribution is to secure as much market share as possible. By having their products available in a wide range of retail outlets, from large supermarkets to small neighborhood convenience stores, a company can increase their product’s visibility and accessibility to consumers, thus raising the potential for sales.
Intensive distribution is also used for promoting new products where immediate mass market exposure is needed. While this distribution strategy tends to increase cost due to supply chain complexities, the benefits accrued from a wider market reach and increased revenue often outweigh the associated expenses.
Examples of Intensive Distribution
Intensive distribution is a marketing strategy where a company aims to distribute its product as widely as possible. Here are three real-world examples:
Coca-Cola: Coca-Cola Co. is one of the classic examples of intensive distribution. Their product is available in almost all possible retail outlets, restaurants, vending machines, and even on e-commerce platforms. This ubiquitous presence of the product ensures constant visibility and availability to consumers, which significantly enhances sales.
Procter & Gamble: This company is another example of intense distribution. They follow a strategy where their products are distributed through every conceivable form of outlet that could be selling consumer packaged goods. From supermarkets to convenience stores, you can find Proctor & Gamble products everywhere.
Mars, Inc: The manufacturer of many popular chocolates such as M&M’s, Snickers, and Mars bars follows intensive distribution to ensure their products are available wherever their customers are, including all supermarkets, vending machines, convenience stores, gas stations and online stores.
Frequently Asked Questions about Intensive Distribution
1. What is Intensive Distribution?
Intensive Distribution refers to a marketing strategy where a company tries to market and sell its products or services as much as possible. The main objective of this strategy is to saturate the markets by ensuring that the product or service is available in every outlet where the potential customers go.
2. What are the benefits of Intensive Distribution?
Intensive Distribution can lead to increased sales, improved market presence, and higher customer convenience. Also, having products available at as many outlets as possible enhances visibility and brand exposure.
3. What are the drawbacks of Intensive Distribution?
Drawbacks might include dilution of brand image, increased distribution costs, and potential overcrowding in the market. Additionally, it might lead to lower profit margins due to increased competition.
4. Is Intensive Distribution suitable for all products?
No, Intensive Distribution is not suitable for all products. It’s more suitable for convenience goods like soda, chips, or chocolate bars. Higher-priced and specialty goods are typically distributed more selectively.
5. What is the difference between Intensive Distribution and Selective Distribution?
While Intensive Distribution aims to saturate the market, Selective Distribution is a strategy where a producer sells its products or services in selective outlets. Preference is given to high grown outlets which can provide the best possible conditions for the product or service to reach the customers.
Related Entrepreneurship Terms
- Market Penetration
- Supply Chain Management
- Consumer Accessibility
- Retail Coverage
- Product Availability
Sources for More Information
- Investopedia: An extensive online resource for finance and investment terms and concepts.
- Business Dictionary: This provides easy-to-understand definitions and explanations of business terms and concepts.
- Financial Times: A leading global business publication that offers deep insights into the world of finance.
- The Economist: The site offers in-depth analysis of global business, finance, economic and political news.
