Channel Decisions

Chapter 13

Global Marketing

Keegan and Green, Chapter 13

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Distribution

• Distribution is the physical flow of goods through channels

• Channels are made up of a coordinated group of individuals or firms that perform functions that add utility to a product or service

Keegan and Green, Chapter 13

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Channels Create Utility

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Distribution Terminology

• Distributor – wholesale intermediary that typically carries product lines or brands on a selective basis

• Agent – an intermediary who negotiates transactions between two or more parties but does not take title to the goods being purchased or sold

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Marketing Channel Alternatives: Consumer Products

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Marketing Channel Alternatives: Industrial Products

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Guidelines for Dealing with Channel Intermediaries

• Select distributors – don’t let them select you

• Look for distributors capable of developing markets, rather than those with a few good customer contacts

• Treat local distributors as long-term partners, not temporary market-entry vehicles

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Guidelines (cont.)

• Support market entry by committing money, managers, and proven marketing ideas

• From the start, maintain control over marketing strategy

• Make sure distributors provide you with detailed market and financial performance data

• Build links among national distributors at the earliest opportunity

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Global Retailing

• Department stores• Specialty retailers• Supermarkets• Convenience stores• Discount stores and

warehouse clubs

• Hypermarkets• Supercenters• Category killers• Outlet stores

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Global Retailing Categories

Fewer Categories

Many Categories

Own-labelfocus

Manufacturer brands focus

ABenetton, Ikea,

Gap, C&A

BMarks & Spencer

Migros

CToys R Us, Virgin,

Douglas, Spar

DCarrefour, IGA,

Promodes

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Global Retailing Market Entry Strategy Framework

Difficult to Enter

EasytoEnter

Culturally Close

Culturally Distant

DOrganic

AChain

Acquisition

CFranchise

BJoint Venture

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Transportation Considerations

• Rail

• Truck

• Air

• Water– Inland water transportation– Ocean transportation

• Pipeline