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Topic: Student Questions
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This question has been answered, and points have been awarded.
Posted by Anonymous on
1/17/2010 at 3:39 PM ET
What is exclusive distribution and will you recommend exclusive distribution for FMCGs?
Give two examples of products being exclusively distributed in the market along with the reason for selected examples.
Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers
Another type of exclusive distribution may not involve high-end products but rather products only available in selected locations such as company-owned stores
Exclusive distribution is a distribution strategy whereby a producer sells its products or services in only one retail outlet in a specific geographical area.
A distribution system, in which a company grants exclusive rights on its products or services to another company, for example, the right to exclusive territory . The supplier grants exclusivity to incentives the distributor to promote the product and provide better service to customers.
I'll not recommend exclusive distribution for FMCGs because FMCGs means FAST MOVING CONSUMER GOODS. These are typically personal consumables, such as shampoo, dry food. Nestle, Proctor & Gamble and Unilever are some of the biggest FMCG companies
1/17/2010 at 4:00 PM
OK, nicely done. You're the first in your class to actually provide your thoughts to this question (appears about 3 or 4 other times).
I agree with your assessment of exclusive distribution and I like your two examples - EXCEPT - can you provide the brand of a high end vehicle that is through exclusive distribution? Given the advantages and disadvantages of exclusive distribution, as you very well defined it, why would a high end auto company go exclusive?
Same questions for the not-so-high end products through company owned stores. Why would they go through their own store versus with lots of dealers?
For the FMCG - why do they NOT go exclusive? Why wouldn't P&G and Unilever go with company owned stores or exclusive distributors? What characteristics of their business model doesn't fit within the definition you gave?
I hope this helps.
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