Market coverage is essential for making the blueprint of a marketing plan that may include advertising, selling, and distribution. An organization may choose all the segments or select some sectors to distribute its products and services. While assessing a particular market, a firm considers factors like estimated Returns on Investment (ROI), the economic factor of the proposed market segment, buying power of the consumers, their cultural pattern and preferences for the goods, etc. While determining a market coverage plan, a business house has to measure its financial strength, target customers, internal, external factors, the productivity and profitability of market segments.
The firm with restricted resources may focus upon only a few selected market segments and generate enough revenue from those target places. While, on the contrary, large firms may concentrate on the greater market or the whole of it as they have huge materials and workforce at their disposal. There is a simple and interesting way to measure the share of the market. First, the companyâ€™s total revenue has to be found out, then divide by the total industryâ€™s market sales, which could determine the organizationâ€™s market share.
Exclusive Distribution- Through the exclusion policy, this market coverage strategy chooses and picks up the target customers only in the selected marketing sectors. Here, the firmâ€™s aim is not to include a wider range of customers or operate as random dealers; rather, the firms reserve their distribution and sales channels within few yet prospective buyers. In this way, it can enhance the quality of sales and profitability to a much higher degree. The firms adopting exclusive market coverage restrict the supply of their products within a particular group of customers and limit the brand. This strategy helps eliminates competitors and maintains exclusivity within a particular geographical area. This is most common in luxury items like expensive smartphones, fancy cars, costly luxury garments, etc. The company sets up specific outlets where products are made available. Lamborghini, Gucci, Apple, etc., are some examples of exclusive distribution.
Inclusive Distribution- Such a market coverage strategy includes almost the whole chunk of customers and reaches out to most low-income groups. Retailers and distributors are the target sectors. Following this strategy, a company has to conduct extensive market research to meet the local demand and preference of products. Micro enterprises and rising entrepreneurs are motivated towards this distribution strategy as it is general and includes diverse items. Danone Kiteiras is a notable example of an inclusive distribution that encourages women from the poorest community of Brazil to sell their goods.
Selective Distribution- This exclusively focuses on the best-performing outlets in the most profitable and productive market segment. Here the producer and the marketing team invest their men and materials in the selected shops of the chosen zones. This is successful for the consumers who love trolling while shopping, as they can reach the specific outlets and buy the products of a particular brand. This ensures maximum market coverage, more profit, and lesser cost of marketing.
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