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journal article
Determinants of Distribution IntensityJournal of Marketing
Vol. 60, No. 4 [Oct., 1996]
, pp. 39-51 [13 pages]
Published By: Sage Publications, Inc.
//doi.org/10.2307/1251900
//www.jstor.org/stable/1251900
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Abstract
Within many categories of consumer products, manufacturers differ markedly in how intensively they distribute their brands among retailers. The authors enhance understanding of why such differences in distribution intensity occur. Literature in the marketing and economics disciplines on brand and channel management, agency theory, and credible commitments, combined with extensive field interviews, provides the foundation for a conceptual framework that centers on proposed moderator effects. Data collected from manufacturers in the consumer electronics industry are used to test the conceptual framework. Credible commitments by retailers in the form of contractual agreements and investments are shown to moderate the relationships of manufacturer brand strategy and channel practices with distribution intensity.
Journal Information
The Journal of Marketing [JM] develops and disseminates knowledge about real-world marketing questions relevant to scholars, educators, managers, consumers, policy makers and other societal stakeholders. It is the premier outlet for substantive research in marketing. Since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline?
Publisher Information
Sara Miller McCune founded SAGE Publishing in 1965 to support the dissemination of usable knowledge and educate a global community. SAGE is a leading international provider of innovative, high-quality content publishing more than 900 journals and over 800 new books each year, spanning a wide range of subject areas. A growing selection of library products includes archives, data, case studies and video. SAGE remains majority owned by our founder and after her lifetime will become owned by a charitable trust that secures the company’s continued independence. Principal offices are located in Los Angeles, London, New Delhi, Singapore, Washington DC and Melbourne. www.sagepublishing.com
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INTRODUCTION TO MARKETING
PRACTICE SHORT ANSWER QUESTION
Explain, using your own examples [fictional or real companies], the
levels of distribution intensity.
Organisations have three options for intensity of distribution: intensive, selective or exclusive
distribution. These distribution intensities refer to the degree to which a product is made
physically available in the market.
Intensive distribution is a form of distribution “aimed at having a product available in every
outlet at which target customers might want to buy” [Lamb et al. 2018, p. 173]. Simply, it is a
form of distribution that aims to maximise market coverage. Typically, intensive distribution
is reserved for convenience products, those products that are frequently consumed out of
necessity and which require little customer decision making. An example of a brand that is
distributed intensively is Coca Cola. Coca Cola is a product that is made available everywhere
drinks are sold, including supermarkets, service stations, restaurants and bars. This intensive
distribution has enabled Coca Cola to become a market leader as a result of the benefits of
high market spread and subsequent relatively low product price.
Selective distribution is a form of distribution which eliminates all but a few retailers in the
distribution channel. Compared to intensive distribution, products sold through selective
channels are typically harder to access, but are not difficult to access. A characteristic of
selective distribution is that consumers must actively seek out the product, but not in a way
that causes issues in purchasing out of scarcity. Selective distribution is typically employed
by those organisations that sell shopping products, as it is too costly to distribute these
items intensively but are demanded too heavily to employ exclusive distribution. An example
of a product that uses selective distribution is Levi’s jeans. While Levi’s does not stock their
products in almost every store that sells jeans, they still have a significant presence with
their own storefronts as well as select retailers like Myer and David Jones.
Finally, exclusive distribution is a form of distribution which offers the most restrictive form
of market coverage. It eliminates all but one retailer in specific geographic region, meaning
that customers must actively seek out the product to a much higher degree than selective
distribution. Exclusive distribution benefits organisations by applying a prestigious element
of the brand through scarcity, however this can backfire if demand for a product is high and
distribution is so exclusive that customers cannot actually purchase the product. As a result,
exclusive distribution is typically reserved for specialty products and some shopping
products which have very specific target markets. An example of this is Beyonce’s Lemonade
album. Originally, and for two years after its launch, Lemonade was only available through
Tidal’s streaming service. This exclusive agreement with Tidal saw subscriptions skyrocket
during the launch of Lemonade.