Level of Distribution Coverage

Some of the expenses can be passed along to customers (Example – Shipping costs) but others cannot (Example – Need for additional salespeople to handle more distributors). Thus, the process for determining the right level of distribution coverage often comes down to an analysis of the benefits (Example – More sales) versus the cost associated with gain the benefits.

There are three main levels of distribution coverage are describe as below

Mass/Instinctive Coverage

Under mass coverage strategy attempts are made to distribute products widely in nearly all locations in which similar type of products are sold. This level of distribution is only feasible for relatively low priced products that appeal to very large target markets. Example: Coca-Cola is available in a wide variety of locations including grocery stores, convenience stores, vending machines, hotels and many, many more. With such a large number of locations selling the product the cost of distribution is extremely high and must be offset with very high sales volume.

Selective Coverage

Under selective coverage the marketer deliberately seeks to limit the locations in which this type of product is sold. To the non-marketer it may seem strange for a marketer to not want to distribute their product in every possible location. However, the logic of this strategy is tied to the size and nature of the product’s target market. Products with selective coverage appeal to smaller, more focused target markets compared to the size of target markets for mass marketed products. Consequently, because the market size is smaller, the number of locations needed to support the distribution of the product is fewer.

Exclusive Coverage

Some high-end products target very narrow markets that have a relatively small number of customers. These customers are often characterized as discriminating in their taste for products and seek to satisfy some of their needs with high-quality, though expensive products. Additionally, many buyers of high-end products require a high level of customer service from the channel member from whom they purchase. These characteristics of the target market may lead the marketer to sell their products through a very select or exclusive group of resellers. Another type of exclusive distribution may not involve high-end products but rather products only available in selected locations such as company-owned stores. While these products may or may not be higher priced compared to competitive products, the fact these are only available in company outlets give exclusivity to the distribution.

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