Which method involves handling distribution functions internally rather than outsourcing?

The method that involves handling distribution functions internally rather than outsourcing is integration. This approach allows a company to control various aspects of the supply chain, providing greater oversight and the ability to align distribution strategies closely with overall business objectives. Integration can take several forms, such as vertical integration, where a company acquires its suppliers or distributors, thus managing the entire supply chain from production to distribution.

In contrast, selective distribution involves choosing specific intermediaries to carry products, which does not inherently imply that distribution is managed internally. Intensive distribution aims for widespread availability by distributing products through as many outlets as possible, often relying on external channels. Exclusive promotional efforts focus on marketing strategies rather than distribution methods. Therefore, integration stands out as the method that emphasizes internal management of distribution functions.