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Monthly Archives: June 2016

About Intensive Distribution

At the point when an company or business makes an item, it receives different strategies and procedures to make the item effectively accessible to the shopper. One such promoting strategy is conveyance. Without a well-laid circulation arrange, no item or administration achieves the craved client. To make the item accessible to the intended interest group, organizations use dispersion channels. While selecting the right circulation channel, advertisers use conveyance procedures, which are intensely impacted by the structure of the business sector and the organization’s assets.

There are three main types of distribution strategies―intensive, selective, and exclusive strategies. The paragraphs below will explain the characteristics of the intensive distribution strategy along with its pros and cons.

What is Intensive Distribution?
Intensive distribution strategy concentrates on making the product available everywhere, at any time.
The company employs as many market outlets as possible to sell its products.
It uses all the distribution channels available and covers a majority of the market.
The products sold are generally used on a daily basis, and those which do not require an extensive brand awareness.
The product is marketed in such a way that consumers are likely to encounter the product at every possible place. They are likely to find the product at the supermarket, gas station, pharmacy, etc.
The intention is to make the product available in abundance, distribute the product over a vast geographical area in many retail locations, and make sure that consumers are never deprived of the product.
The image that such products have are ‘easily available, not elusive’. To employ an intensive strategy or not largely depends on the type of product, resources, customer demand, use, and marketing funds.
This strategy has certain pros and cons, depending on which the manufacturer decides if he wants to pursue this strategy or not.

Advantages

Product Awareness
Since the products are available everywhere (practically), consumers are aware of the same.
They know the product well enough and trust the company (depending on the marketing tactics and success of the product, of course).
The main aim of the manufacturer is to improve the recognition of the product in the market.
The product gains even more popularity through commercials, newspaper ads, and word-of-mouth publicity.

Increased Sales and Earnings
FMCGs and similar products are frequently used; therefore they are produced in a huge amount.
The products are distributed via many retail outlets, and since they are regularly used, they are sold rather quickly too. Thus, making sufficient money.
You may have experienced this yourself―you may have gone to the supermarket to buy something and found that it is out of stock. The same product may be available at another discount store or the gas station. Thus, ultimately, the company benefits through the high availability of goods.

Marketing Efficiency
Intensive distribution helps increase marketing efficiency.
As a manufacturer, you are aware of how much and where the product is being used, you know exactly how to change your marketing technique to make a profit.
You may have seen commercials where a toothpaste brand offers 25% extra at the same price. Or, perhaps a free product is offered on the purchase of another product, etc.
When you know the demand for your product, you can devise ways to control the marketing campaign.

Impulsive Purchase
Impulsive purchase may act as a double-edged sword.
The fact is, since goods that use impulsive strategy are used regularly, the public does not give a lot of thought to what is being purchased and why.
Most of the shopping is impulsive. If they do not like one brand, they will easily switch to the other.
With efficient advertising, products may gain the customers’ loyalty. More often than not, the same products are used by the customers; in general, the product is so easily available that they may try a new brand for a change, but prefer buying the old one and stick to their preferences.

Huge Customer Recognition
Frequently-used and readily-available products gain widespread consumer attention.
After all, this is what the objective of intensive distribution strategy is―to make the product easily available such that the consumer encounters the name wherever he goes.
Over a period, the product becomes an important part of the consumer’s life, and irrespective of whether he uses a brand or not, billboards and print ads help make brand recall of the product.

Disadvantages

Distribution Expenses
Despite the fact that the huge number of products are likely to result in huge revenue, manufacturers face the problem of varying sales.
The sale of goods changes as per the retail outlets―some outlets may sell a lot, while some may have a comparatively lesser sale.
When an outlet has lesser than expected sales, some products may remain unsold; however, the cost of production and distribution will not change.
Thus, the company will have to put up with the distribution costs to multiple locations despite low sales, resulting in a loss of capital.

Difficulty in Managing Retailers
The number of retail locations is spread over a large area, and sometimes, it becomes difficult to manage such a huge number of retail outlets.
There are times when the manufacturer may not even be aware of some retail outlets that may be located in far-off areas, perhaps in the outskirts or suburbs.

Dependence on the Middleman
Intensive distribution follows all the distribution channels―producer-consumer, producer-wholesaler-consumer, and producer-wholesaler-retailer-consumer.
This strategy uses so many retailers that the use of an agent/go-between becomes inevitable.
Distribution to the retailer is handled by the agent, and in such a scenario, the firm has to trust the middleman, which could be a little risky in certain situations.

Low Price Products
FMCG is the best example of low price and high volume of goods.
These low price products have a low-margin, and whatever revenue is earned is the money that is left after all the expenses are subtracted.
These goods require a fast turnover to make profit and benefit the company.

Most Effective Marketing Strategies

Associations invest such a large amount of their energy, exertion and cash on thinking of them, the answer is entirely basic. The point of any business is to create benefits, and marketing strategies do precisely that they produce more business and income. They are contrived not just concerning offering and advancing an item, additionally about the sort of client administration that the associations will give. The following is a rundown of the absolute most fruitful strategies, which organizations have been actualizing in today’s cutting edge, focused business situation, to procure incomes and to keep the opposition under control.

Effective Marketing Strategies

Build Relationships

People are very important in business, whether they are customers, suppliers, or employees of the organization.
It is necessary to form relationships with one’s customers so that they come again to make repeat purchases.
Relationships need to be built with employees as well so that the organization has a positive word of mouth in the market.

Differentiate from Competition

One of the most successful of marketing techniques is to create your own identity, which is totally different from the rest of the competitors.
A good way to do that is to stay ahead of the competition by offering innovative, technologically-advanced products.
For this, a business’ market research should be very strong, so that change is anticipated in advance and action taken accordingly.

Create Advertising Campaign

The advertising campaign should be such that it highlights all the advantages and strengths that a company’s product and services have over the one’s offered by competition.
The unique selling point, also known as USP of the business, can be something like an excellent after sales service or a guarantee period, which is much longer than what is offered by competition.
This should be creatively stressed upon in the advertising campaigns.

Offer New Products and Schemes

This is one of the most effective and commonly-used tactic by many businesses today – new products as well as new schemes are offered to customers from time to time.
When a business introduces new products in the market, its customer base increases as new customers purchase this product.

At the same time, when old customers see some new innovative features in the latest product, they make further purchases too.

This increases the sales volume as well as revenue for the business.
Another way to increase sales, is to offer some new schemes during the festival and holiday seasons, such as one product at fifty percent discount on another one, especially if the business has some unsold stock of goods lying beforehand.

Implementation of the Strategies

The strategy that is set should be very realistic and measurable. It should also be applicable for a very long time.
For proper strategy implementation, measurable goals should be set.

Goals can be defined in monetary terms, such as doubling the sales revenue in six months.
Once the goals are set, a strategy that sets the business apart from competition should be devised and implemented at the right time in the market.

Proper formulation as well as appropriate implementation of strategies is equally important for them to be truly successful. This however does not end here. Post their implementation, measuring how successful they have been in generating revenue and sales, helps in the formulation of strategies for the next year.