Selective distribution is used when selling to more than one but fewer than all of the intermediaries who are willing to carry a company's products in a given market.
A system in which a provider agrees to supply only approved distributors who fulfill certain minimal standards, and the distributors agree to supply only end consumers, other distributors, or dealers inside the approved network.
Consider a huge food chain that sells franchise stores to individual owners who meet particular criteria established by the main business. Consider an e-commerce behemoth that permits a select number of vendors to sell on their platform.
Selective distribution enables differentiation between expensive and possibly competitive - albeit more "common" - products. It primarily provides for the management of scarcity and prestige, two fundamental qualities of luxury products.
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