Imagine you are about to take a road trip with your best friend.
Your bags are packed, your itinerary is set, and you're ready to hit the road for an adventure.
As your friend starts the car, you smile and ask them, "Hey, want me to pull up my GPS?"
They smile back. "Oh no. I don't need directions. I've got this."
You shake your head in confusion. "But we don't know how to get there!" "Yeah," they say, rubbing their chin. "I figured I'd just drive around till we find the place."
Ten hours later, you're still driving in circles, nowhere close to your destination.
Does leaving for an adventure without a roadmap in mind sound like lunacy? It's definitely no way to plan a road trip. But that's exactly how you'd sound if you attempted to execute a national or global marketing campaign without a distribution strategy.
Solid distribution strategy marketing acts as your GPS, giving you direction and outlining a no-fluff roadmap to your destination—your destination, in this case, being products that are profitable, consistent, and on-brand.
In this guide, we're going to tell you everything there is to know about distribution in marketing, including insight on how to create an awesome distribution strategy.
Distribution Strategy in Marketing—Quick Overview
Handing out sweets to kids in the neighborhood is distribution. So is giving out concert tickets on a first-come, first-serve basis. In marketing, however, the term "distribution" wears a completely different face.
Distribution in marketing refers to the practice of working with a third party or local partner to take products or services to market. In other words, distribution empowers you to focus on making your product perfect while other people do the hard work of selling.
But that's just the most basic definition of it. For companies that have got both a corporate (central) marketing function and a local (distributed) marketing function, distribution means much, much more. It even takes a completely new name: distributed marketing or channel marketing, or national-to-local marketing.
Distributed marketing is a model where organizations craft marketing messages at the corporate level and execute them locally through dealers, retailers, and partners (otherwise called channel partners). Local partners then customize these marketing assets to fit their locality and target customers while staying on brand.
Although distribution strategy marketing is often used by large brands that offer several products to a broad market base in a localized manner, it also applies to small businesses. For instance, a company that produces artisanal pickles can increase customer reach by partnering with specialty gourmet shops that will sell the pickles in their local stores.
Overall, having a rock-solid distribution strategy is incredibly useful for marketing because it:
- Enables companies to cater to their local markets while keeping content consistent and on message across all points
- Combines the power of corporate leadership and resources with partner's invaluable local knowledge in a way that centralized marketing cannot
- Creates a unified, cohesive experience for both existing and potential customers
- Leads to wide-scale cost savings as a result of increased production
- Allows companies to retain total control over their brand and marketing strategy
Distribution Channels and Examples
Distribution channels are the paths that products take when traveling from the provider or manufacturer to the final consumer. Today's channels are many and varied.
1. Direct
In this kind of setup, the producer sells directly to the consumer, with zero intermediaries in between. It's the fastest of all distribution channels. However, it's not the most feasible and may not be the most suitable or economical either.
Perhaps the biggest perk of direct selling is that it gives companies complete control over the whole consumer process. They control the consumer experience, the brand image, as well as have the added benefit of direct interaction and relationship building with the consumer.
Clothing brands, fast-food brands, and hotels are all examples of direct distribution strategies. You wouldn't believe it, but some of the most iconic brands in the world today once got by without any intermediaries. Instacarts, Bonobos, and All birds used to appeal to their local markets way before they blew up to become global sensations.
2. Indirect
For a manufacturer or producer, indirect distribution means selling wholesale to local agents or partners so they can distribute the products for you. They store it, display it, and employ the sales force to put it into the hands of customers.
In indirect selling, supermarkets, convenience stores, big-box stores, and departmental stores all act as intermediaries and the point of contact for customers.
Brands such as Nestle and Pepsi are great examples of indirect distribution strategy. No matter where you are or how many hands a Pepsi drink passes through, it'll still get to you in the same shape, form, identity, and—dare we say?—sweetness.
3. Intensive
Under the intensive distribution strategy, a company tries to explore all possible outlets to distribute its offering.
At a more localized level, however, intensive distribution is more suited to products that rarely:
- Enjoy a great deal of customer loyalty
- Appeal to a large group of people
Coca-Cola is a great intensive distribution strategy marketing example. You can find the famed "coke drink" in virtually any convenience store and supermarket in the United States, regardless of the market or location. Coca-Cola has an enormous market penetration and is one of a handful of soft drink brands that are ubiquitous across the country.
4. Exclusive
The goal of this distribution model is just one: to generate a high-end product image. As such, products are only distributed in very specific channels and in a limited way. In this model, product scarcity isn't just acceptable—it's expected.
A brand need not always push itself onto its target market. There are some brands that have such high value that having exclusive region-based showrooms serve their purpose better. Rolex and Mercedes are two outstanding examples of exclusivity in distribution.
The two companies partner with one wholesaler in each market to control precisely where their products are sold and the way they're represented. Five bucks, you'll never find a Rolex outlet in your neighborhood unless you live right in the heart of Manhattan or any other major city.
5. Selective
Selective distribution is a lot like exclusive distribution. However, unlike the latter, selective distribution allows for a few more retailers or outlets per every geographical area.
This kind of strategy best serves brands whose products are highly unlikely to be purchased at certain locations. As such, they actively position their distribution channels in select markets.
High-end companies that produce exceptional quality clothing and accessories are likely to use selective distribution. For instance, you might find Gabbana and Dolce in stores like Neiman Marcus but not at Walmart or Penneys. This is done to set standards and keep a close eye on channel partners.
6. Dual
This form of distribution is pretty much self-explanatory. It basically involves extending an offering through two or more channels in order to reach customers. For example, a wholesale company might have its own brand and a private retailer brand where it sells the same products. For brands looking to extend their grip on the local market, dual distribution might be the best fit.
How Distribution Strategy Informs Your Marketing
A distribution strategy is to marketing as butter is to bread or laces are to shoes. The two concepts are, quite simply, inseparable. It's impossible to run a hyper-effective local marketing campaign without a concrete distribution strategy in place. After all, distribution (or placement) is an indispensable member of the 4P's, aka the marketing mix.
But we're getting ahead of ourselves here. Let's start from the beginning. The nature of the 4P's has evolved greatly in response to digitization (subscription-based services replacing physical products, for instance), but none have been impacted to the degree that placement has. Now more than ever, marketers have a behemoth of distribution channels to consider, with their target audiences spread out across various digital platforms. Not to mention, physical distribution channels haven't gone anywhere either. For distribution channels to reach wider audiences and drive significant revenue in the digital age, they need to be accounted for in marketing strategies and business models.
On the back of this reality, including strategy in marketing plans shouldn't just be an important consideration for marketers—it should be a no-brainer. Where are people going to find your products and other offerings? When can they purchase them? Where are they going to use them? How are you going to manage inventory? These questions are difficult to answer if distribution strategy is still a buzzword to you.
Then there's the question of brand messaging and integrity. You'll hear nothing but crickets if you attempt to create a consistent brand experience from the national to the local level without a well-fleshed-out distribution strategy in place. After all, no one understands your local customers more than that dealer or retailer around the corner. What's more, you need to leverage all of your channel partners to keep content consistent and on-point at all points in the distribution flow. In other words, having a distribution strategy is key to making your marketing initiatives—both national and local—tick.
As distribution strategies evolve to meet the needs of a digital world, it's more important than ever for brands to have a clear vision for their marketing efforts. Distributed marketing platforms not only allow for a high degree of customization and personalization, but they also ensure brand messaging integrity and a consistent brand experience no matter where customers are engaging with your product.
How a Distributed Marketing Platform can Help
A distributed marketing platform is, namely, the same as a local marketing automation platform, but with a more global reach. By that, we mean that the software enables you to manage your local marketing efforts from a single interface, regardless of where in the world you or your customers are located.
This is extremely valuable for businesses with a widespread customer base, as it enables them to communicate with all of their customers in a culturally relevant and consistent manner. A distributed marketing platform also helps businesses maintain brand integrity across all distribution channels, ensuring that customers have a positive experience no matter where they engage with the company.
While your national marketing team may be the brand experts, it's the local channel partners that know your customers best. Crafting a distribution marketing strategy ensures all of your teams—both national and local—are reading from the script.
At Marvia, we help large national brands market their business on both a large and small scale. Thanks to our dynamic templates, branded marketing shop, and more, brands like yours can make marketing a team effort and let local partners make on-brand marketing materials in mere minutes. This ultimately gives your national and regional teams to focus on polishing up your brand's mission, identity, and distribution strategy.
Want to know more? Learn more on how Marvia solves distributed marketing challenges with their tools.