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					   International
Marketing Channels
Global Perspective A Single Stick of Doublemint
         Today – 18 Billion Tomorrow
• A product must be made accessible to the target market at an
  affordable price
• Getting the product to the target market can be a costly
  process
• Forging an aggressive and reliable channel of distribution may
  be the most critical and challenging task facing the
  international marketer
• Competitive advantage will reside with the marketer best able
  to build the most efficient channel from among the alternatives
  available



                                                                14 - 3
Peking Ducks – No Free Enterprise




      Guangzhou’s Farmers Market
                                    14 - 5
  Import-Oriented Distribution Structure

• Demand exceeds supply
• The customer seeks the supply from a limited number of
  middlemen
• Distribution systems are local
• Few countries fit the import-oriented model today


  In an import-oriented or traditional distribution
  structure, an importer controls a fixed supply of goods
  and the marketing system develops around the
  philosophy of selling a limited supply of goods at high
  prices to a small number of affluent customers.

                                                            14 - 6
 Comparison of Distribution Channels between
        the United States and Japan
• Insert Exhibit 14.1




                                               14 - 8
Retail Structures




             Source: Euromonitor, 2003
                                         14 - 10
Large-Scale Retail Store Law and Its Successor

• Daitenho – the Large-Scale Retail Store Law
   - Large stores must have approval from the prefecture
     government
   - All proposals first judged by the Ministry of International Trade
     and Industry (MITI)
   - Then, if all local retailers unanimously agreed, the plan was
     approved
   - Could be a lengthy process
   - Applied to both domestic and foreign companies
• Replaced by the Large-Scale Retail Store Location Act of June
  2000
   - MITI out of the process
   - Relaxed restrictions

                                                                    14 - 13
Trends: From Traditional to Modern Channel
                Structures




Russian Home Depot (Super Home) in St. Petersburg


                                                14 - 15
 Trends: From Traditional to Modern Channel
                 Structures
• European retailers merging with former competitors and other
  countries to form Europe-wide enterprises
• Foreign retailers attracted by the high margins and prices
• The Internet may be the most important trend affecting
  distribution
• Covisint
• GlobalNetXchange
• E-commerce
• 7-Eleven competes with FedEx and UPS




                                                            14 - 16
Distribution Patterns




Mexico vs. Malaysia
                        14 - 18
Retail Patterns




              Source: Euromonitor, 2003



                                          14 - 20
Alternative Middleman Choices




                                14 - 22
         Home-Country Middlemen

                         Nike European
                         Distribution Center,
                         Laakdal, Belgium




Nike Sport Store,
St. Petersburg, Russia
                                                14 - 24
Home-Country Middlemen




                         14 - 26
Foreign-Country Middlemen


             Tokyo Tsukigi   Fish
             Market




                                    14 - 27
Foreign-Country Middlemen




                            14 - 28
  Factors Affecting Choice of Channels

                    Stockmann’s Department
                    Store, Helsinki, Finland




Grand Bazaar
(Kapali Carsi),
Istanbul, Turkey


                                               14 - 31
  Locating, Selecting, and Motivating Channel
                    Members
• Locating middlemen
• Selecting middlemen
   - Screening
   - The agreement
• Motivating middlemen
• Terminating middlemen
• Controlling middlemen




                                                14 - 33
                       The Internet

• E-commerce is used to market:
   - Business-to-business (BSB) services
   - Consumer services
   - Consumer and industrial products
• E-commerce is more developed in the U.S. than in the rest of
  the world
• B2B enables companies to cut costs in three ways:
   - Reduces procurement costs
   - Allows better supply-chain management
   - Makes possible tighter inventory control



                                                                 14 - 34
    Concerns for e-Vendors




Fedex at Roissy Airport, Paris, France
                                         14 - 35

				
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