What is exclusive distribution?
Exclusive distribution is a situation where they are just right to sell a specific product in a specific territory. The legality of the exclusive distribution contract may vary depending on the specifics of the case. In some cases, such agreements are completely legal, while in others rivals can create legal challenges. If the company can show that the exclusive distribution agreement harms the competition in some way, it can be able to claim that the agreement is not legal. In an example of an exclusive distribution agreement, a car manufacturer could only agree with three retailers to sell their cars in a particular country. Sellers other than the three who tried to sell new vehicles from this manufacturer would do so without permission; One of the consequences could be that the manufacturer would refuse to honor the guarantees or provide support for cars sold by naneautorized dealers. From the perspective of people who move the product to consumers, they have an exclusive contract, which means consumers to themmust come if they want a product. For example, if a mobile phone provider has an exclusive agreement with a mobile phone manufacturer, people who want to use mobile phones created by the manufacturer must go through this provider of mobile phones.
manufacturers can appreciate that they have control over how their products are commissioned, launched and branded. Exclusive distribution allows companies to tightly control the image of the brand, which can be particularly important for luxury products. Exclusive offers can actually add to the image of the brand by strengthening the idea that the product is special, rare and difficult to obtain, which is more desirable. If something can be purchased at any store, it is considered secular, while if it can only be purchased in certain stores, it will add a lack of a component that can be more attractive.
Exclusive distribution is often listed in advertising onproducts. If advertising says something like "available only in the following stores" or provides a list of stores where the product can be purchased, this may indicate that the manufacturer has an exclusive agreement and the product cannot be obtained elsewhere. This type of agreement tends to be less favorable for low -end products, because the goal with these products is to quickly saturate the market and move units, which would be prevented from limiting distribution sources.