In exclusive distribution the distributors are given sole rights to distribute the company products in a given geographic area. This type of distribution is favored when the products being marketed are exclusive, unique or prestigious. In intensive distribution the company sells its products through a large number of distributors and dealers to reach maximum number of consumers in the target segments. It is favored by companies that operate in intensively competitive sectors like the FMCG markets.
In selective distribution companies use very few distributions to sell their products in a given geographical area. Of late manufacturers are constantly tempted to shift from an exclusive or selective distribution strategy to a more intensive distribution strategy to reach more number of potential customers for their unique, exclusive and prestigious products. However though this shift may help the manufacturer to increase the sales in the short run it will have a major impact on long term results.
Because of this shift the product will loose its uniqueness, exclusivity and prestige of possession and the potential target customer may shift to more exclusive brands offered by the competitor. The company may also loose the loyalty and support of its existing distributors in marketing and service activities. The customers may also refuse to pay a higher price once the exclusivity is lost thus impacting the financial performance of the company in the long run.