What is a selective distribution?
What is a selective distribution?
Selective distribution is considered to be a medium level of product availability that seeks to balance product availability with inventory and storage costs. Selective distribution is used when we don’t need to have the product on every corner market shelf. We can be more selective with our outlets.
Why selective distribution is important?
Selective distribution may also create business certainty as you may choose only to contract with the most lucrative outlets. Having fewer distributors may also mean that you can establish better communication and build more productive working relationships.
What is an exclusive distribution agreement?
An exclusive distribution contract means only one distributor is appointed in a specific marketplace by a supplier. As part of the agreement, the supplier promises not to allow the distribution of the products by any other party in the given market area.
What is an example of selective distribution?
A good example for products for which selective distribution is used is cars. For the low-end range and mid-level range cars, selective distribution is used. You would have observed that multiple, but not all, dealers in a certain locality deal in certain cars. Another example for this could be clothing.
Is Nike selective distribution?
On Appeal. In its July ruling, the appeals court confirmed the lower court’s decision, holding that Nike’s selective distribution agreement is, in fact, in line with EU competition law, and thus, valid in the case at hand.
What is an example of exclusive distribution?
Exclusive distribution definition is a kind of distribution a manufacturer or supplier authorizes only one distributor to carry out within a definite region. An example of exclusive distribution is Apple solely authorizing AT to be the distributor of the iPhone to end users.
What is the selective distribution strategy?
Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g., training) on them.
What are the characteristics of a selective distribution agreement?
A selective distribution agreement typically has no element of territorial exclusivity (or customer exclusivity) but is characterised instead by a restriction on the resale of contract goods to third party resellers who are not party to the selective distribution system.
Can a selective distribution arrangement be considered unobjectionable?
Although many selective distribution arrangements are considered to be unobjectionable for competition law purposes, there are strict conditions which must be met and the terms and conditions of such arrangements must be individually reviewed on a case-by-case basis.
Why are luxury products sold in selective distribution?
Luxury products sold under prestigious brand names which are heavily promoted to create an exclusive brand image. Suppliers of luxury products choose selective distribution in order to protect and further promote the brand image. Products which fall under this heading include perfumes and cosmetics, watches and jewellery.
What are the benefits of an exclusive distribution agreement?
Under an exclusive distribution agreement, the distributor will enjoy an exclusive sales territory within which it is protected from competing sales by the supplier and/or distributors appointed in other territories.