Intensive distribution and exclusive distribution are the terms used in the context of marketing, when a company or producer produces a product than it needs to distribute that product to the end-users that are the customers and that is where the company or producer has two options one is intensive distribution and other is exclusive distribution. In order to understand more about both these concepts, one should look at some of the differences between intensive and exclusive distribution –
Intensive VS Exclusive Distribution
Meaning
Intensive distribution refers to that distribution strategy in which the producer of the goods appoints multiple retailers so as to sell its products while exclusive distribution refers to that distribution strategy where the company or producer ties up with 1 or 2 retailers to sell the products of the company or producer. In simple words, intensive distribution is similar to you having your birthday and you inviting the whole class while exclusive distribution is similar to you inviting 1 or 2 of your best friends and excluding the other students of the class.
Scope
Intensive distribution is wider in scope because there is no limit on the number of retailers which company can appoint and hence company’s products can reach to far and flung areas while as far as exclusive distribution is concerned its scope is limited in the sense that company appoints only a few retailers and hence far-flung areas are beyond the reach as companies prefer to appoint retailers in big cities only thus ignoring the semi-urban and rural areas.
Quantity Purchased by Retailers
In case of intensive distribution, retailers purchase limited quantity from the companies as there is no exclusive agreement with the company which results in a large number of retailers for the product, and retailer cannot take the risk of purchasing large quantities for the product as chances of product remaining unsold are high while as far as exclusive distribution is concerned retailers can purchase huge quantity from the company and hence achieve economics of scale as only a few retailers can stock goods according to the exclusive agreement done by them with the company.
Category of Products
Intensive distribution is ideal for those products which are used daily by the consumers, have a high turnover rate, and are relatively low priced but as far as exclusive distribution is concerned it is ideal for those products which have a high price and are not purchased daily or in daily routine.
Management
In case of intensive distribution, it becomes very difficult as far as the company is concerned to manage a large number of retailers which in turn results in the formation of a separate department in the company to manage a large number of retailers but as far as exclusive distribution is concerned it is much easier to manage retailers due to lesser number of retailers and hence there is no need to have a separate unit or department to manage the retailers.
Dependence
In case of intensive distribution since the company has many retailers and distributors it removes the risk of the company being dependent on few retailers while as far as exclusive distribution is concerned company is dependent on few retailers or distributors and hence there is always this risk of retailers or distributors making company suffer due to over-dependence on them.
As one can see from the above that intensive distribution and exclusive distribution are completely different from each other and that is the reason why any company thinking of adopting either of the two strategies should carefully read the above differences and then only should select the strategy best suited for its product or service.