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International Marketing Channels

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

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International Marketing Channels

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  1. International Marketing Channels

  2. 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

  3. Peking Ducks – No Free Enterprise Guangzhou’s Farmers Market

  4. 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.

  5. Comparison of Distribution Channels between the United States and Japan • Insert Exhibit 14.1

  6. Retail Structures Source: Euromonitor, 2003

  7. 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

  8. Trends: From Traditional to Modern Channel Structures Russian Home Depot (Super Home) in St. Petersburg

  9. 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

  10. Distribution Patterns Mexico vs. Malaysia

  11. Retail Patterns Source: Euromonitor, 2003

  12. Alternative Middleman Choices

  13. Home-Country Middlemen Nike European Distribution Center, Laakdal, Belgium Nike Sport Store, St. Petersburg, Russia

  14. Home-Country Middlemen

  15. Foreign-Country Middlemen Tokyo Tsukigi Fish Market

  16. Foreign-Country Middlemen

  17. Factors Affecting Choice of Channels Stockmann’s Department Store, Helsinki, Finland Grand Bazaar (Kapali Carsi), Istanbul, Turkey

  18. Locating, Selecting, and Motivating Channel Members • Locating middlemen • Selecting middlemen • Screening • The agreement • Motivating middlemen • Terminating middlemen • Controlling middlemen

  19. 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

  20. Concerns for e-Vendors Fedex at Roissy Airport, Paris, France

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