Question

My newly established FMCG brand launches its brand in a foreign country, which distribution should my brand use intensive, exclusive or selective distribution? What are their advantages and disadvantages? (international marketing perspective)

Answer 1

As we know that these strategies can be utilized by a firm as per its business objectives, market characteristics ( attractiveness, level of demand , challenges associated to selling this products etc. ) and any other unknown factors.

In intensive, a business will focus to open several or maximum outputs so as to reach to end users . In selective strategy, Only some specific locations and outlets will be identified for selling the products. In exclusive distribution, company owned outlets may be open to few locations.

I will recommend selective distribution strategy for a FMCG company entering into a foreign market.

The following are the advantages:

1) A exact response and trend related new product and brand name will be observed by company's sales and research executives.

2) Chances of failure will be reduced. A good response from customers will be a clue to start some new outlets in more locations.

3) If , products will be used by many customers then there will a good image of the brand may be established through mass media interventions.

4) It is a middle path between intensive and exclusive distribution . Hence, risks of losing immediate failure will be reduced.

Disadvantages:

1) The brand identity and popularity will be gain momentum gradually.

2) If, distributors will not selected appropriately then chances of failure will be occurred.

3) It may be possible that competitive brands doesn't provide chance to grow the sales of this newly launched brand.

4) It may be a problem that local channels will have to offer greater profit margin and this method will be excessive costly while launching days.