Provide examples of the three levels of distribution intensity.
The three levels of distribution intensity are intensive, selective and exclusive.
Intensive distribution (also called Mass Distribution) is where a company supplies their product to all markets (essentially they are found everywhere). These products can be found in almost every place a person shops (grocery stores, gas stations, supermarkets, etc.). These are also the type of product a person can buy both at home and abroad. Examples of products which use intensive distribution are Coke, Pepsi, most major cigarettes brands (like Marlboro), and major brewing companies (like Budweiser).
Selective distribution pays attention to very specific geographical locations regarding the availability of a specific product. Companies who want to maintain a specific quality store for their product will use selective distribution. An example would be high end clothing (such as Dolce and Gabbana products are sold at Neiman Marcus and not at Walmart or JC Penneys).
Exclusive distribution is, essentially, an extreme modification of selective distribution. Companies are far more selective with where their product can be purchased at. Exclusive distribution uses one distributor for entire regions. An example of a product which falls under exclusive distribution is high-end luxury vehicles. For example, Rolls Royce vehicles are exclusively distributed. Rolls Royce only has 33 dealerships in the United States (5 in California).
There are three levels of distribution intensity.
The first is intensive distribution. In this type of distribution, the company sells its products to as many outlets as possible. The main aim is to ensure the product is available everywhere in the market. The strategy is used for convenience products like soda, bread, cooking oil, and newspapers. The rationale behind the strategy is that more sales will be achieved with more customer exposure.
The second level is selective distribution. In this type of distribution, the company chooses a few retailers to sell their products. The level of customer service required to sell the product is higher compared to products sold through intensive distribution. The strategy is used for specialty items like engine spark plugs, watches, and some cosmetic lines.
The third level is exclusive distribution. In this type of distribution, the company limits the number of distributors by only allowing one or very few retailer(s) to carry its brand in a select geographical territory. The strategy is aimed at protecting brand image, and the products include luxury and industrial goods and brands like Porsche, DeWalt, and Audemars Piguet watches.
The first level of distribution intensity is intensive. At this level, a product is available on a widespread basis at many outlets, and the customer service necessary to sell the product is minimal. An example is Coca-Cola or any other nationally (and internationally) distributed soda or candy.
The second level of distribution is selective; at this level, products are distributed to many dealers but are not available everywhere. Examples include Chevrolet cars or Sony televisions. To buy these products, a consumer needs to go to a specific kind of dealer and receive specialized customer service to make a purchase.
The third level of distribution is exclusive; at this level, products are available at very few outlets, and consumers most likely have a very high level of tailored customer service. Examples include high-end jewelry stores such as Bulgari or Tiffany or high-end car dealerships such as Bentley or Rolls Royce. There are very few of these types of outlets or stores in existence.