Distribution (A.K.A. Place or Placement)
Marketing Channels or Distribution Channels include everyone who has a part in getting finished goods to the consumer. They are comprised of Intermediaries or Distribution Partners who work in concert to get the right amount of product to the right place for consumers to buy it. A given distribution channel may include a Manufacturer, a wholesaler, and a retailer.
One of the first things to consider in developing a distribution strategy is the distribution Intensity. There are 3 levels
Intense distribution takes advantage of all available channels. This strategy works best for products that do not require an involved purchasing decision. Often, they are impulse items.
For example, Tic Tacs are sold just about everywhere. They can be purchased in grocery stores, liquor stores, mini marts, movie theaters, and out of vending machines.
This strategy is primarily for more expensive items that consumers will put some thought into before buying. For manufacturers, the selective strategy allows them to build stronger relationships with the distributors. These relationships often allow the manufacturer to be more involved in the pricing and marketing process.
Examples of items suited to selective distribution include home electronics, clothing, and jewelry.
This strategy only allows one outlet in any defined geographic region. Generally, this strategy works best for big ticket, luxury items.
For Example, at the time I developed this lecture, there were 6 authorized Ferrari dealerships in California.
Beverly Hills Ferrari
Beverly Hills California Ferrari Dealer
9372 Wilshire Boulevard, Beverly Hills CA 90212
Los Gatos Ferrari
Los Gatos California Ferrari Dealer
66 East Main Street, Los Gatos CA 95030
Newport Beach Ferrari
Orange California Ferrari Dealer
P.O. Box 701, Orange CA 92856
Rancho Cordova California Ferrari Dealer
11511 Folsom Boulevard, Rancho Cordova CA 95742
San Francisco Ferrari
Mill Valley California Ferrari Dealer
595 Redwood Highway, Mill Valley CA 94941
Santa Cruz California Ferrari Dealer
1025 Water Street No. F, Santa Cruz CA 95062
(By comparison, there were approximately 55 BMW dealerships.)