Distribution (marketing)

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In marketing, distribution refers to the method by which a service or product reaches the final consumer. This method encompasses various tactics, including intensive, selective, and exclusive distribution, and employs diverse channels such as retailers, wholesalers, and importers. It’s crucial to effectively manage and incentivize the intermediaries within these channels to guarantee efficient delivery. Presently, the evolution of e-commerce and multi-channel retailing is transforming distribution procedures. Additionally, the idea of disintermediation, or the elimination of intermediaries, is gaining prominence, especially in the context of online shopping trends. Lastly, regulations like the Insurance Distribution Directive in the EU significantly influence distribution practices. Compliance with these regulations is vital for businesses, particularly for those operating in the insurance sector.

Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution (or place) is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.

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Decisions about distribution need to be taken in line with a company's overall strategic vision and mission. Developing a coherent distribution plan is a central component of strategic planning. At the strategic level, as well as deciding whether to distribute directly or via a distribution network, there are three broad approaches to distribution, namely mass, selective and exclusive distribution. The number and type of intermediaries selected largely depend on the strategic approach. The overall distribution channel should add value to the consumer.

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