Page 406 - Foundations of Marketing

Marketing Channels and Supply-Chain Management | Chapter 13 373

INTENSITY OF MARKET COVERAGE LO 3 . Identify the intensity of
market coverage.
In addition to deciding which marketing channels to use to distribute a product, marketers
must determine the appropriate intensity of coverage—that is, the number and kinds of outlets
in which a product will be sold. This decision depends on the characteristics of the product
and the target market. To achieve the desired intensity of market coverage, distribution must
correspond to behavior patterns of buyers. In Chapter 10 , we divided consumer products into
four categories—convenience, shopping, specialty, and unsought—according to how con-
sumers make purchases. In considering products for purchase, consumers take into account
such factors as replacement rate, product adjustment (services), duration of consumption, and
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time required to locate the product. These variables directly affect the intensity of market
coverage. The three major levels of market coverage are intensive, selective, and exclusive
distribution.

Intensive Distribution

Intensive distribution uses all available outlets for distributing a product. Intensive dis-
tribution is appropriate for products that have a high replacement rate, require almost
no service, and are often bought based on price cues. Most convenience products like
bread, chewing gum, soft drinks, and newspapers are marketed through intensive distri-
bution. Multiple channels may be used to sell through all possible outlets. For example,
goods such as soft drinks, snacks, laundry detergent, and pain relievers are available at
convenience stores, service stations, supermarkets, discount stores, and other types of
retailers. To satisfy consumers seeking to buy these products, they must be available at
a store nearby and be obtained with minimal search time. For these products, consumers
want speed in obtaining them while receiving a reliable level of quality and flexibility
to buy the product wherever it is most convenient to them at the lowest price possible.
For example, Fage yogurt, featured in the advertisement, faces strong competition from
other brands of Greek-style yogurt. To maintain market share and an acceptable level of
profit, consumers can find Fage, which is marketed as a more authentic and higher-quality
Greek yogurt, in a range of supermarkets, specialty shops, gourmet shops, and conve-
nience stores. As you can see in the ad, Fage emphasizes the purity of its ingredients and
flavors, such as the blueberries shown here, and stresses that it is a healthier snack than
other yogurts.
Sales and availability of low-cost convenience products may be directly related to product
availability. For example, CVS no longer carries Johnson & Johnson’s Tylenol-brand prod-
ucts in many of its stores after years of supply-chain problems with the wholesaler, McNeil
Consumer Healthcare, which resulted in frequent stockouts. Rather than deal with dissatisfi ed
customers, CVS chose to stop carrying Tylenol products altogether and instead offers its own
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generic versions of the products.
Selective Distribution

Selective distribution uses only some available outlets in an area to distribute a
product. Selective distribution is appropriate for shopping products, which includes durable
goods like televisions or stereos. Shopping products are more expensive than convenience
goods, and consumers are willing to spend more time and possibly visit several retail outlets
intensive distribution Using all
to compare prices, designs, styles, and other features. available outlets to distribute a
Selective distribution is desirable when a special effort, such as customer service from product
a channel member, is important to customers. Shopping products require differentiation selective distribution Using
at the point of purchase. Selective distribution is often used to motivate retailers to pro- only some available outlets in
vide adequate service. Dealers can offer higher-quality customer service when products are an area to distribute a product

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