International Distribution Management

1. International Distribution Management

2. A Comparative Study of International Brands • Compare SKUs • Compare Prices • Compare Channels • Compare Displays • Across time

3. DISTRIBUTION CHANNELS FOR BUSINESS GOODS

4. DISTRIBUTION CHANNELS FOR CONSUMER GOODS

5. Global Trends inDistribution Systems • Larger-Scale Retailers • International Retailers • Direct Marketing • Discounting • Information Technology

6. Wholesaling • Most European countries are on par, relative to the population • The United States has relatively few establishments, each of larger scale • The Japanese have many units and a large number of people in wholesaling • The size distribution of wholesalers in many countries seems to approximate the well-known “80-20” rule: 80 percent of the transactions are handled by 20 percent of the firms • Vertical Integration • Power and Competition • Efficiency

7. Retailing • Lifestyle • Shopping represents both a tiresome job and a leisure activity for individuals everywhere and is both a reflection of and a formative influence on the lifestyle of the people in a country • Creating New Channels • The rapid deployment of point-of-purchase information technology

8. Developments in the 1990s • The border-hopping of the 1980s has accelerated in the 1990s • German companies Metro, Rewe, and Tengelmann entered the Czech Republic, Hungary, and Poland • Growth in the scope of internationalization: companies entered many markets besides adjacent ones • Food retailers in Western Europe: Tengelmann (Germany); Ahold (Netherland); Delhaize Le Lion (Belgium) in the U.S., Central Europe, and the Far East • U.K. retailers: Marks & Spencer; The Body Shop; Laura Ashley; Tesco; Sainsbury • U.S. clothing chains: Talbots and T.K. Maxx have seen the U.K. as a bridgehead into the continental Europe

9. Classification of the Global Retailers Few Categories C A Benetton, Ikea, Habitat, Gap, H&M, C&A Toys R Us, Virgin, Douglas, Spar, Vobis Own-Label Focus Manufacturer Brands Focus B D Carrefour, Makro, Promodes, Auchan, IGA, Yaohan Marks & Spencer, Migros Many Categories

10. Global Distribution Players Process Home Market Channel Members Export Management Company Export Agent Direct Exporting Developing an International Distribution Strategy Factors Affecting Selection of Channel Members Locating and Selecting Channel Members Managing the Distribution Channels Foreign Market Channel Members Import Intermediaries Local Wholesalers Retailers Gaining Access to the Distribution Channels Global Supply Chain Management Trends in Global Distribution

11. Processes of Establishing A Global Distribution System • Develop a distribution strategy • Establish criteria for selecting distribution partners • Locate potential distribution partners • Solicit the interest of distributors • Screen and select distribution partners • Negotiate agreements

12. Channel Objectives • To create utility for customers • Place (the availability of a product or service in a location convenient to a potential customer) • Time (the availability of a product or service when desired by a customer) • Form (the product is processed, prepared, and ready to use and in proper condition) • Information ( answers to questions and general communication about useful product features and benefits are available)

13. Dimensions of Distribution Strategy • Distribution Density • Density refers to the amount of exposure or coverage desired for a product • Channel Length • The concept of channel length involves the number of intermediaries involved in bringing a given product to the market • Channel Alignment and Leadership • The area of alignment deals with the structure of the chosen channel members to achieve a unified strategy • Distribution Logistics • Logistics involves the physical flow of products as they move through the channel

14. Factors Influencing the Selection of Channel Members • Cost • Capital Requirement • Product and Product Line • Control • Coverage • Synergy

15. Channel Structure Alternatives for Consumer Products • Door-to-Door Sales Force • Internet Marketing • Mail-Order Marketing • Manufacturer-Owned Stores

16. Entry Strategy Framework Culturally Close A C Organic Chain Acquisition Easy to Enter Difficult to Enter B D Franchise Joint Venture Culturally Distant

17. Entry Strategy • Organic (Greenfield and Site Acquisition) • Using its own resources to acquire existing sites from other retailers or to start from scratch • Franchise • Master franchise: only one franchisee per country or region; a sub-franchisee network • Direct franchise: several franchisees within a country, usually on a location-by-location basis • Acquisition • Involves purchasing multiple outlets in the target market • Joint Venture

18. Gaining Access toDistribution Channels • The “Locked-Up” Channel • Alternative Entry Approaches • Piggybacking • Original Equipment Manufacturers (OEMs)

19. Rationalizing Local Channels • Changing Distributors • The termination of independent distributors’ or authorized dealers’ contracts • Creating a wholly owned sales subsidiary • Dual Distribution • To differentiate the offerings in different channels

20. Problems for Manufacturers • The shift of bargaining power in the channel • To serve local retailers and global retailers simultaneously • “Channel Captain” • Relationship Marketing • Development of global brands