Research Outline-Channel Strategies
Channel Strategies
This section of the readings explains the three generic distribution strategies:
- Intensive
- Selective
- Exclusive
The choice of which of these distribution strategies would be best for any given product depends on those factors outlined in the readings as follows:
- Type of customer
- Type of product
- Channel partner capabilities
- Business environment and technology
- Competing products’ marketing channels
For example, Lexus automobiles are distributed selectively. Customers tend to be upper middle class who want an affordable (as they define it) luxury car that is highly dependable. Because of the service component, dealerships need to be all-inclusive for services needed for a Lexus and be as close to their target market as possible, e.g., upscale neighborhoods. But because Lexus is a car dealership, it can’t be directly located in an upscale neighborhood. The car dealer needs to be able to serve a geographic area that is easy to reach and where customers are willing to drive, and the best choice may be locations visible from highways driven by upscale members of the target market as they drive between home, work, and errands. A Lexus dealership wants to be located near competitive offerings to ensure the target market considers Lexus. It also makes it easy to shop the competition and to increase the value of the brand by being associated with like products. Do not use Lexus!
Do the same type of description for each of the three distribution strategies with a product of your choice.
