Question

1. What kind of companies might prefer to use direct channels, please give at least three examples to illustrate.

2. Please give some examples of companies that take an intensive distribution, selective distribution and exclusive distribution strategy. Three examples for each one.

Answer 1

Direct Channels is the oldest ways of directly selling goods or products to the consumers. This channel of selling does not need any intermediate or middle man to link the seller and buyer. Best illustration of Direct Channel would be:

a. A bakery makes breads & cakes and the consumers directly walks in to the bakery and buy the products he wants to eat. So it is just the seller and the buyer involved in this transaction.

b. A Local Meat Shop sells poultry and pork meat, the customer directly walks in to the meat shop and buys the quantity of meat he requires.

c. A Jewellery shop, where the customer directly comes in to the shop, chooses the stuffs he wants to buy and leaves.

In all the above illustration it is just the seller and the buyer interacting with direct transaction with out involvement of any third agent.

Intensive distribution is a market segment where the company decides to supply their product to every market available. Comapnies that follow Intensive distribution model are

a. The Coco Cola Company (Beverages Company) that sells Soft drinks.

b. Carlsberg Group (Brewing Company) that sells Bears.

c. Indian Tobaco Company (ITC) that sells Cigarettes.

Some examples of Intensive distribution are softdrinks, cigarettes, newspapers, toothpastes etc.

Selective distribution is a distribution segment where only a few selective outlets or stores are chose for the product to be made available to the consumers. It is the most effective distribution model for high end brands and products. Companies that follow Selective distribution segment are

a. Philips that sells Home Appliances.

b. General Electricals (GE) that sells electrical prodcuts.

c. Dolce and Gabbana fashion house that sells high-end brand stuffs.

Some examples of Selective distribution are home appliances, furnitures, clothing brands etc.

Exclusive distribution is a segment model where the manufacturer manufacturing the product and the distributor come to an agreement stating that the manufacturer will exclusively sell his products only through that distributor and will not sell the product to anyone else nor sell them directly.

a. Samsung Mobile Company that sells its mobile exclusively through their distributors.

b. Apple Company that sells their MacBook through their exclusive distributors.

c. BMW that sells their cars through exclusive distributors.

Some examples of Exclusive distribution are Mobile Phone, Computers, Automobiles, Designer brands etc.