Module 9 Global Marketing Distribution

Distribution Channels

• A strategy to transport products from manufacturing locations to the consumer, which can be done by the manufacturer or through intermediaries (agents, wholesalers, distributors, and retailers)

Channel Members in International Markets

• Import Intermediaries: identify needs in local markets and search the world to satisfy those needs, purchasing goods in their own name and acting independently of manufacturers
• Local Wholesalers or Agents: move manufacturer products to retailers, with varying roles by country
• Retailers: purchase products for resale to customers, taking title to goods, selling directly to end-users, and making a margin on sales or earning commissions

Analyzing National Channels

• Distribution Density: the number of sales outlets or distribution points used for a given geographic area, which affects consumer shopping behavior
• Channel Length: the number of intermediaries involved to bring a product from the manufacturer to the consumer, influenced by distribution density, average order quantity, and availability of channel members
• Channel Alignment: the coordination of channel members to provide a unified marketing strategy, with the dominant channel member (Channel Captain) often dictating terms of pricing, delivery, and product

Factors Influencing the Selection of Channel Members

• Costs: initial, maintenance, and logistics costs affect channel selection
• Product Considerations: perishability, technical level, and breadth of product line influence channel selection
• Control, Coverage, and Synergy: control, geographic coverage, and complementary skills affect channel selection

Alternative Approaches for Market Entry

• Piggybacking: an arrangement where one company distributes another company's products through its established channels
• Joint Ventures: when two companies form a new legal entity
• Acquisitions: purchasing an existing company to gain immediate access to a distribution system
• Locked-Up Channel: a situation where a manufacturer is unable to convince an intermediary to work with them, often due to competitive agreements or cultural forces

Global Logistics

• Planning, implementing, and controlling the physical flow of materials and finished products from points of origin to points of consumption
• Traffic or Transportation Management: deals with modes of transporting products, considering cost, lead time, and transit time
• Inventory Control: ensuring adequate inventories to avoid breakdowns in the logistics system
• Order Processing: quickly processing orders, with efficient ordering systems providing a competitive advantage
• Materials Handling and Warehousing: storing and preparing materials for transportation, with climatic changes and warehousing practices influencing storage
• Fixed Facilities Location Management: locating production facilities and warehouses to serve customers worldwide, balancing timely delivery with logistics costs

Predictions and Trends in Supply Chain and Logistics

• International companies need to balance timely delivery and logistics costs, while considering differences in local habits and culture
• Technology is reshaping and adding greater efficiency to global distribution

Test your knowledge on strategies to transport products from manufacturing locations to consumers, including the role of intermediaries like agents, wholesalers, distributors, and retailers in international markets. Explore how import intermediaries identify local market needs and develop their own marketing strategies.