Selective Distribution

Selective distribution is one of three levels of distribution intensity that companies may choose from as they develop their marketing channels; intensive and exclusive are the others. Each manufacturer must determine the extent of market coverage it considers adequate for providing consumers access to its products. This decision is affected by a number of factors, including the type of product being distributed and the target markets (consumer segments) being pursued.

For example, a candy manufacturer such as M&M/Mars wants to have its markets thoroughly covered because consumers buy candy frequently, so its products are available in grocery stores, convenience stores, and many other retail outlets. This is intensive distribution. In contrast, other products are bought less frequently, involve more risks, and require that consumers spend more time in the decision-making process.

Selective distribution is used by manufacturers of automobiles and furniture, among others. Consumers like to compare prices, so retailers tend to locate relatively close to each other. This is why one sees automobile dealers clustered together along a major highway, or furniture stores located within several blocks of each other in a city's downtown area.

A pharmacy chain store such as Walgreen's follows this selective strategy in locating its pharmacies in smaller [Page 498]cities. If the city is big enough, Walgreen's will open more than one pharmacy location, much like one finds several Ford dealerships in a major metropolitan city.