Distributors serve as the link between manufacturers and their downstream distribution or distributor brand channel or supply chain. This could be an individual agent or business firm, working in specific market segments or product genres.
Distributors usually collaborate with manufacturers in order to distribute their products to retailers, value-added resellers, or wholesalers. Some maintain exclusive buying agreements.
Distributor Brand – Intensive Distribution
Intensive distribution is a marketing strategy that ensures products are available in as many retail outlets as possible distributor brands, with the goal of improving accessibility and convenience for consumers, ultimately increasing sales and market share.
- Fast-moving consumer goods
This strategy is often employed by fast-moving consumer goods (FMCG) such as soft drinks or newspapers. An intensive distribution strategy typically involves mass producing the product, which reduces unit cost and makes it more accessible for consumers’ distributor brands. This can be an advantageous approach for brands with low-profit margins as it will help them boost sales.
- Range of retail partners
Companies using this strategy often collaborate with a range of retail partners, from large electronics stores to smaller independent shops. The purpose is to make their products accessible, boost brand awareness, and make it simple for customers to locate the device they need.
Redbox, for instance, utilizes an extensive distribution or distributor brand strategy to rent DVDs in vending machines located at grocery stores and other convenient locations where customers frequently shop. This strategy has enabled the company to expand rapidly.
- Electronics manufacturers
Electronics manufacturers often employ this strategy to maximize their product availability across different retail channels. They typically collaborate with multiple partners, such as large electronics stores and online marketplaces, in order to achieve this objective.
Advantage of this strategy
Another advantage of this strategy is that it promotes brand loyalty among consumers who purchase similar items frequently. This approach works especially well for items that are usually bought once daily or as needed, like toothpaste or laundry detergent.
The disadvantage of this strategy
The disadvantage of this distribution brand strategy is that it requires a substantial investment of financial resources to get products to customers. This could include advertising campaigns and manufacturing costs, both of which could prove expensive for the manufacturer.
Exclusive distribution is a distribution strategy or distributor brand that grants distributors exclusive authority to sell a manufacturer’s product in one area or region. This facilitates more efficient and effective supply chain management compared to more traditional methods of selling the same product through multiple channels.
Exclusive distribution is increasingly popular in luxury automobiles, designer clothing, and high-end mobile phones. This method of distribution provides your brand name with potential customers without needing to spend money on marketing or advertising that could otherwise be put towards expanding your business.
- This strategy offers manufacturers and distributors the greatest benefit, as they can focus on their primary tasks.
- they stand a better chance at making profits since they won’t need to compete with other businesses for distribution contracts.
- this strategy is an effective way to guarantee products arrive at their intended market on schedule and undamaged. As a result, companies that choose this approach create a more reliable and valuable brand image for themselves.
This distribution strategy may not be ideal for every industry, but it has become a go-to choice for many companies looking to establish an exclusive brand image in an emerging market. Furthermore, companies producing technically challenging or high-quality goods that require specialized skills to sell successfully may find this approach the most advantageous.
Direct distribution is a business model in which manufacturers send their products directly to end consumers without the involvement of intermediaries. This model is commonplace within production industries and gives companies control over both the process of product distribution as well as setting their own prices.
Key advantages of direct distribution
One of the key advantages of direct distribution is that it helps businesses cultivate a strong customer relationships. Companies can reach out more closely to their clients and offer personalized services. Furthermore, companies have the opportunity to respond promptly with discounts for future purchases or use customer feedback for improvement purposes.
A key benefit of this type of distribution
Another key benefit of this type of distribution is that it helps businesses save money on logistics and shipping expenses. This is particularly advantageous if a business has many products in inventory and needs to ensure they get out quickly.
Finally, this type of distribution can be advantageous for companies expanding into new markets or regions. It also serves to eliminate channel partners who do not align with the company’s overall strategic vision or sales targets, so they can focus on optimizing their strongest channels.
Joint Ventures – Efficient way to expand your distribution
Joint ventures are an efficient way to expand your distribution by drawing upon another business’ expertise, resources, or experience. These relationships can be beneficial in many scenarios, from manufacturing to distribution and marketing.
Business partnerships allow businesses to enter new markets without investing heavily or taking on debt. This type of arrangement may be especially advantageous when entering international markets if one party already has access to an effective distribution channel or sales force in that territory. Joint ventures typically take the form of a business partnership, but can also be organized as an unincorporated association or corporation
Structure of joint venture:
The structure of a joint venture is critical since it determines how much each partner must pay in taxes, what duties they have towards one another, and how profits and losses will be shared. Companies considering forming a joint venture should carefully assess if it’s the best move for their business. If it is, they should consult an experienced attorney who can craft an organized agreement that meets all relevant objectives and legal complexities.
OPT for a joint venture:
Many companies opt for joint ventures when entering a new market or developing an innovative product. Not only can they save money through shared advertising expenses, but they also gain access to industry clout that might otherwise go unused.
To achieve success in a joint venture, it is essential to find an appropriate partner with the skills, experience, and market insight. After that, they should collaborate with an attorney to draft an agreement outlining each party’s roles within the relationship as well as how profits and losses will be shared between them.
It is essential to remember that joint ventures, like any profit-seeking business, involve risks and liabilities which must be managed. To guarantee their profitability and success, both parties must dedicate themselves to thinking long-term rather than just short-term gains.
Brand Distributors serve as the link between manufacturers and their downstream distribution channel or supply chain. This could be an individual agent or business firm, working in specific market segments or product genres. Distributors usually collaborate with manufacturers in order to distribute their products to retailers, value-added resellers, or wholesalers.