The process involves determining the total sales across all product categories within a defined market area. It is often expressed as a percentage, representing a brand’s or product’s sales relative to the overall market’s sales. For example, if a company’s products are sold in 50% of the stores within a specific geographic region and are stocked with a representative amount of inventory, its distribution level would be 50%. This measurement quantifies how widely available a product is to potential customers.
Understanding the depth and breadth of product distribution is critical for manufacturers and retailers alike. It allows for the assessment of market penetration, identification of potential growth opportunities, and informed decisions regarding resource allocation. Historically, tracking this required laborious manual audits. Today, technology offers more efficient and accurate data collection methods, enabling a more precise understanding of market dynamics and competitive landscapes.
