International Distribution and Logistics

1. International Distribution and Logistics • Swatch’s channel design • Today’s system of exchange • Rationalising local channels • Wholesaling • Nike’s ‘Do it yourself’ • Retailing • Creating new channels • Kodak’s own airfreight hub • Global logistics

2. Global Channel Design • Chosen intermediaries must meet criteria • work closely with distributors • build sustain brand • avoid discounting • ‘shops in shops’ approach e.g department stores

3. Today’s system of exchange Promotion Contact Negotiation Transporting and storing Users Financing Producers Packaging Money Goods

4. Rationalising Local Channels • Changing distributors - where a poor job is being done e.g. Nike took on distributors • Dual distribution - multiple channels may emerge e.g Goldstar in USA (OEM deal with Sears, later under own brand)

5. Wholesaling • Vertical integration • power and competition 80/20 rule e.g. Malaysia a dozen European import houses handle half of the trade, whilst hundreds of smaller companies handle the remainder • Efficiency • trend towards integration by technology e.g. Wal-Mart • Types of wholesaler • fit all bills e.g. full-service wholesalers

6. Nike’s ‘Do it yourself’ • 1970s independent distributors • successful brand at home • 1980s established own subsidiaries overseas • Now controls most subsidiaries • even bought some distributors

7. Retailing • Middlemen who sell directly to the consumer • Retailing and lifestyles • many in developed world • retailers are globalising • Problems for marketer? • Gillette blades through drugstores in USA, tobacco shops in Italy, department stores in Germany, street in Moscow, counters in Thailand, travelling vans in India

8. Creating New Channels • Retailing is dynamic • Innovative over recent years • self-service • discounting • vending machines • mail-order houses • fast-food globally diffused • Global retailing • success for Carrefour in Brazil and Argentina • Marks and Spencer had problems in Canada and pulled-out

9. Kodak’s own airfreight hub • Minimise shipping errors and product handling • loaded onto trucks at Rochester plant • All paperwork is already completed • flight approval is obtained before truck arrives at airport (JFK)

10. Global Logistics • Focus on channels within a country • ‘the transportation and storage activities necessary to transfer the physical product from manufacturing plants and and warehouses in different countries to the various local market countries’ Johansson (1999) • Supply chain management • e.g. Nissan trucks sold in France come from their Tennessee plant, Micras from Sunderland, Maximas from Japan via Amsterdam. • Competition and technology

11. Air Express e.g. FedEX, DHL, UPS and Airborne • Ocean carriers • Global carrier alliances e.g. Sea-Land Service of Seattle and Maersk of Denmark have a global partnership. • Overland transportation • roll-on-roll-off (RORO) containers are moved from ships directly onto rail (USA) • Warehousing and inventory management • e.g. SKF bearings new distribution centre in Belgium reduced distribution points from 24 to 5