Weighted Distribution (WD)

Weighted distribution definition

Weighted distribution is a measure of the percentage of shops in which a product is available, giving each store a weighting proportional to its sales. Unlike numerical distribution, which measures only the percentage of shops carrying the product, weighted distribution takes into account the volume of sales generated by each shop.

Calculation of weighted distribution

It is calculated by dividing the total sales of the shops where the product is present by the total sales of the whole market and multiplying the result by 100 to obtain a percentage.  For example:

• if a market has 3 outlets A, B, and C, which respectively account for 50%, 30%, and 20% of a specific product category’s total market sales.
• If the company sells its product to  A and C only,

Then the DV of this product will be: DV = weight of A + weight of C = 70%.

Why you should care about weighted distribution

Weighted distribution provides a more accurate measure of a brand's market penetration and performance than numerical distribution. It takes into account the fact that some shops may generate a higher volume of sales than others and gives a more refined indication of a brand's overall market share. By comparing Numerical Distribution to Weighted Distribution, companies can determine the quality of distribution of a product:

• if ND > WD, the product is distributed through a significant number of outlets, but not through those with the highest market value
• if ND < WD, the product is distributed through a limited number of outlets, but these are the ones with the highest market value