Global Distribution Channel Decisions

Keegan and Green, Chapter 13

DistributionDistribution is the physical flow of goods through channelsChannels 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

Channels Create Utility

Keegan and Green, Chapter 13

Distribution TerminologyDistributor wholesale intermediary that typically carries product lines or brands on a selective basisAgent an intermediary who negotiates transactions between two or more parties but does not take title to the goods being purchased or sold

Keegan and Green, Chapter 13

Marketing Channel Alternatives: Consumer Products

Keegan and Green, Chapter 13

Marketing Channel Alternatives: Industrial Products

Keegan and Green, Chapter 13

Guidelines for Dealing with Channel IntermediariesSelect distributors dont let them select youLook for distributors capable of developing markets, rather than those with a few good customer contactsTreat local distributors as long-term partners, not temporary market-entry vehicles

Keegan and Green, Chapter 13

Guidelines (cont.)Support market entry by committing money, managers, and proven marketing ideasFrom the start, maintain control over marketing strategyMake sure distributors provide you with detailed market and financial performance dataBuild links among national distributors at the earliest opportunity

Keegan and Green, Chapter 13

Physical Distribution and Logistics ManagementOrder ProcessingWarehousingInventory ManagementTransportation

Keegan and Green, Chapter 13

Transportation ConsiderationsRailTruckAirWaterInland water transportationOcean transportationPipeline

Keegan and Green, Chapter 13

Comparison of Transport Modes

Keegan and Green, Chapter 13

Factor

Highest/

Longest

Lowest/

Shortest

Cost

Air

Truck

Rail

Water

Time/

Capability

Water

Rail

Truck

Air

Reliability/

Accessibility

Truck

Rail

Air

Water

Ease of

Tracing

Truck

Air

Rail

Water