Products, Such as Crest Toothpaste

¶ … products, such as Crest Toothpaste and M&Ms, an intensive, wide-ranging distribution strategy is demanded. These products are not specialty products. Almost everyone uses toothpaste, and Crest Toothpaste is a fairly moderately priced, mid-market beauty item. Similarly, M&Ms are a low-priced confectionary item with a wide appeal. These products are dependent upon volume-based sales, rather than upon a core, loyal market of consumers. In contrast, a more selective distribution intensity level is demanded for Land Rover sport utility vehicles. Although SUVs have gained in popularity, SUVs have a more specific appeal in markets where consumers do a fair amount of driving or there is an interest in off-road applications for sporting purposes (such areas include the West and Southwest, in particular). SUV demand is far lower in areas of the country (like New York City) where parking is a premium and public transportation is widespread. In some markets, where gas prices are high, like California, demand may be even lower. Similarly, high-priced Barbie dolls have a market amongst collectors, rather than upon individuals buying children's toys. An exclusive distribution strategy, where the brand's cache of being 'hard to get' is part of its appeal amongst consumers with enough money to spend a large amount of money on a luxury purchase is manifest in the case of Rolex watches and Coach purses. Few consumers have enough disposable income to spend so much money on a watch or purse, and those that do like the fact that their accessories communicate the fact they are part of an 'in group.'

Discussion 2

Retail space is at a premium at Sephora because of limited sizes of its store. Customers come to Sephora because of the unique access it provides to specialty, high-end make-up projects. They seek personal attention. Sephora is not a 'low end' store -- customers come for the perceived benefits the cosmetics give to their appearance. Makeup is not a necessity marketed at a low price point. Because the Sephora flagship store is located in New York, customers often expect to come in and out quickly, and if the product is not there, they may not patronize the store again, because of the availability of other retailers only a few stores away. This is why keeping detailed information about its inventory is essential. Inventory strategists closely monitor the numbers flow of various products throughout the store. Sephora cultivates a relationship with its brands even before brand appears in the store, negotiating exclusivity contracts and how to position the product.

Discussion 3