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What is intensive distribution?

04 April 2023

Intensive Distribution: The key to reaching maximum customers

Intensive distribution is a marketing strategy that aims to distribute a product as widely as possible through a variety of retail channels. The goal of this approach is to make the product readily available to as many customers as possible, regardless of location or market segment. It is a common strategy employed by businesses in the fast-moving consumer goods (FMCG) sector, such as food and beverage companies, personal care products, and household cleaning items.

In an intensive distribution strategy, the manufacturer (or import distributor) works closely with distributors, wholesalers, and retailers to ensure that the product is available in as many retail outlets as possible. This may include everything from small mom-and-dad stores to large national supermarket chains. The idea is to make the product available wherever and whenever the customer wants it.

Intensive distribution can be an effective strategy for products that have a broad appeal and are priced competitively. For example, products that are frequently used and purchased, such as soap or shampoo, are likely to be distributed intensively. By making these products available in as many retail outlets as possible, manufacturers can increase their sales volume and market share.

Intensive distribution - Advantages

Intensive distribution builds brand recognition and loyalty. By making products widely available, the marketer ensures that customers are exposed to their brand regularly. This can help to create a sense of familiarity and trust, making customers more likely to choose that brand over others.

The obvious key advantage of intensive distribution is that it enables manufacturers to reach a large number of customers.

Intensive distribution - Disadvantages

However, there are some potential drawbacks to an intensive distribution strategy. One of the most significant is that it can lead to price competition, as retailers compete to offer the product at the lowest price.

In Australia it is almost impossible to achieve intensive distribution without including the major national retail chains.

Inevitably, the large retail chains will use their buying clout to pressure the manufacturer (or import distributor) to drop their price so the retailer maintains their retail margin while offering the product at a lower price and thus gaining market share and sales volume. This can lead to lower profit margins for manufacturers and can make it difficult to maintain consistent pricing across different retail channels.

Overall, intensive distribution can be an effective strategy for manufacturers looking to maximize their reach and sales volume. By working closely with distributors and retailers to make their products widely available, manufacturers can increase brand recognition and loyalty, while also achieving economies of scale in production and distribution.

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