Tuesday, March 2, 2010

Exclusive Distribution

The textbook defines exclusive distribution as giving a limited number of dealers the exclusive right to distribute the company’s products in their territories (307). This technique can enhance a product’s image and allow for higher markups.

One example of a company that has utilized this idea in a manner slightly different from what is described in the textbook is Whole Foods. The textbook describes exclusive distribution predominantly as a producer strategy in which a company gives the rights to sell their product to only a select number of the many distributors who are willing to sell it. Whole Foods is primarily a distributor, but they have still managed to use this strategy to their advantage. Rather than waiting for producers to approach them with an offer, Whole Foods actively seeks out the producers of attractive products that are new to the U.S. market and asks for exclusive distribution rights. They also work directly with some suppliers to develop products specifically designed for their stores.

The Whole Foods website lists a total of 77 items carried exclusively by their store (http://www.wholefoodsmarket.com/products/exclusive-products.php?CID=&P=2). Each of these items has been evaluated by Whole Foods to ensure that they meet the company’s quality standards. Customers can identify products that are exclusive to Whole Foods by looking for their exclusive symbol (shown below) on the packaging.

Scott Hardy, Section E

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