Distribution intensity levels and channel structure in product marketing

Distribution Levels

Rolex watches: Rolex deploys an exclusive distribution strategy. Its high pricing is part of its appeal, given that wearing a Rolex signifies one's economic status. Rolexes can be bought at high-end jewelers, department stores, and select shopping areas which high-income consumers are likely to patronize.

Coach purses: Coach similarly has an exclusive distribution strategy. They are expensive items of clothing, usually sold at select Coach retailers. These stores are often in exclusive malls or in high-rent districts of urban locations.

Land Rover sport utility vehicles: Although these vehicles are not the most expensive means of transportation available, they are not universally desired by all consumers. People in cities will likely have less desire for SUVs given that they do not need all-terrain vehicles and are more concerned about the price of gas than their suburban counterparts. However, within certain pockets of the country, and also within certain consumer segments (such as people who go camping and desire off-road capacity), using select dealerships across the nation to reach these consumers can increase sales.

M & M's: Mars, which manufactures M&Ms, uses an intensive distribution strategy. M&Ms is a form of mass-marketed milk chocolate with wide consumer appeal. Selling the candy at supermarkets, drug stores, and other places where consumers are budget-conscious or are shopping with small children is Mars' usual, preferred venue of distribution.

Special edition Barbie dolls: While Barbie is a mass market toy, collectors of Barbies are usually adults looking for exclusive, unique items. Thus, a selective distribution strategy is preferred, through specialty hobby stores and a few high-end toy stores patronized by adults as well as children

Crest toothpaste: Crest toothpaste deploys an intensive distribution strategy. Crest is a fairly standard toothpaste, without a specific market 'niche' and consumers are inclined to purchase it because of convenience rather than price at drug stores and supermarkets.

Sephora - Supply Chain Management

The makeup retailer Sephora deliberately keeps extremely low inventories but showcases a wide variety of products. It offers medium to high-end products for consumers at a centralized location. It is important that Sephora does not build up too much inventory, given the 'trendiness' of makeup. Inventory from last years' lines Sephora cannot sell it is forced to discount and take a loss. However, on the other hand, it cannot simply keep inventories extremely low. Makeup is frequently needed 'here and now' and if a consumer cannot purchase his or her favorite makeup immediately he or she may go somewhere else, thus losing Sephora a potential customer.