FB602: Global Marketing Management

24/3/2014Russell Preston

Recap

• World Communications

Distribution

Learning Objectives:

• Evaluate channels of distribution/logistics

• To differentiate complexities of international distribution

• To contrast service & product distribution

Background

4

• Efficiently & Effectively

• Decreases in transportation costs

• Reliability increased

• Opening up of markets

• Increases chance of success

Definition

• “defined as the design and management of a system that directs and controls the flows of materials into, through and out of the firm across national boundaries to achieve its corporate objectives at a minimum total cost”

source: Kotabe & Helsen, (2011) Global Marketing Management, 5th edn, p500

Global Logistics

• Materials management

• Physical distribution

• Sourcing Strategy

EU

• Single European Market 1992

Complexity of Physical distribution

• Distance –higher costs, eg insurance and transport, pilferage, warehousing

• Exch Rate fluctuation

• Foreign Intermediaries – in Asia its who you know to get things moving

• Regulation – US domestic shipping regs

• Security – 9/11

Modes of Transport

• Value-to-volume ratio determined by how much value

is added to the materials used in the product

• Perishability – quality degradation over time

• Cost of transportation – see above dependencies

How do we get there Sir?

• Ocean shipping – Liners or Bulk Shipping (container cargoes)

• Air freight – expensive, prob high value egsemi conductors

Global distribution

..And on time, maximising cargo space

Key issues

How do you hedge against inflation/currency fluctuations?

Tax differentials transfer from country A to B to C

so an export from country B? assembled in country C gets tax breaks?

Logistical Integration/Rationalisation

E-Commerce – so what happens once you are on the web?

E-commerce

• Amazon.com

• 5 million books

• Which one? Who do you buy from?

• Dymocks Australia

• 100,000 books

• Who is truly global? Why?

Sourcing Strategy

International distribution channel

• Lo

Local or foreign agent

international wholesaler

E-Commerce?

Channel Management

An indirect distribution channel threatens control

Some guidelines:

• Seek intermediaries capable of developing markets, not just those with good contacts

• Regard intermediaries as long term partners – not as a means to get entry

• Actively search and select intermediaries

• Support your intermediaries with mktg/know how

• Attempt to control as much as you can over marketing

Retailing

• Growth

• Own label lines

• e-tailing

• Wal-Mart are P&Gs largest customer, buying more than the whole of Japan

SWOT

• Choose:• Nike or

• Adidas or

• Puma

• Complete a SWOT for one of the above in Germany (Nike), Adidas (China), Puma (Brazil)

Retailing differences acrossthe world

• Japan, historically tight regulation, department stores led, no cars for shopping, smaller stores/head of population, no parking

• Germany –no Sunday opening, close at 6pm, open 1 Saturday in a month

• UK Sunday opening is the only limitation

• Asia, fresh produce, markets very strong. Low incomes

Question

• Carrefour, being the 2nd largest retailer in the world, what are the implications of its pull-out from Japan for other global retailers such as Wal-Mart which is struggling to survive ?

Resources

• Ch15 core text, Kotabe & Helsen Global marketing Management