A food processing company is deciding between exclusive and selective distribution for its organic yoghurt product in the Indian market. Discuss the factors to consider, give the advantages and disadvantages of each option, and recommend the most suitable distribution strategy. Provide at least three arguments for your recommendation.
Answer
The company should adopt selective distribution because (i) it maintains product quality by choosing retailers that can handle perishable goods, (ii) it preserves brand prestige without the high costs of exclusive retail, and (iii) it reaches a broader, yet controlled, customer base in tier‑2 cities.
Step-by-step solution
- List factors: product perishability, brand image, cost, market coverage, retailer capabilities.
- Describe exclusive distribution: single retailer, high control, high cost, limited reach.
- Describe selective distribution: limited retailers, balance control and reach, moderate cost.
- Compare advantages of selective: quality control, brand prestige, wider coverage.
- Compare disadvantages: less control than exclusive, potential price competition.
- Recommend selective distribution citing three supporting reasons.
- Provide concise recommendation sentence.
Common mistake: Choosing exclusive distribution due to lack of cost analysis
Concept tested: Choosing distribution strategy
Published · How this solution was prepared and checked
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