Ch10
20
Use with INTERNATIONAL MARKETING STRATEGY: Analysis, development and implementation 5 TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE ch10/1 MANAGEMENT OF INTERNATIONAL DISTRIBUTION AND LOGISTICS Session 10
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Transcript of Ch10
Use with INTERNATIONAL MARKETING STRATEGY:
Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE
ch10/1
MANAGEMENT OF INTERNATIONAL DISTRIBUTION AND LOGISTICS
Session 10
Use with INTERNATIONAL MARKETING STRATEGY:
Analysis, development and implementation 5TH edition ISBN 13: 978-1-84480-763-5 Published by Cengage Learning DOOLE AND LOWE
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CONSIDERATIONS
• Selection of foreign country intermediaries• How to build a relationship with them• How to deal with variety of retailing structures• How to maximise new and innovative forms of
distribution• How to manage logistics of physical
distribution
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ch10/3
DISTRIBUTION CHANNELS FOR BUSINESS GOODS
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DISTRIBUTION CHANNELS FOR CONSUMER GOODS
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11 C MODEL:Selecting Appropriate Channel Intermediaries
Customer characteristics
Culture
Competition
Company objectives
Character of the market
Cost
Source: Czinkota & Ronkainen (2006)
Capital required
Coverage needed
Control issues
Continuity provided
Communication effectiveness
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USING A COMPANY OWNED SALES FORCE
• Advantages
– far greater control over sales and marketing effort
– facilitates formation of closer manufacturer-customer relationships
– can be used to identify and exploit new international marketing opportunities
• Disadvantages
– relatively larger resource commitment
– higher exit costs– increased exposure to
unexpected changes in political/social environment of host country
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• Traditional retailing• Intermediary retailing • Structured retailing• Advanced retailing
– Interactive customer marketing– Mass customisation– Data mining– Category management– Effective consumer response
DIFFERING PATTERNS OF RETAILING
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RETAILERS - TYPICAL DIFFERENCES BETWEEN DEVELOPING & DEVELOPED
COUNTRIES
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PUSH FACTORS OF THEINTERNATIONALISATION OF RETAILING
• Saturation of the home market or over-competition
• Economic recession or limited growth in spending
• A declining or ageing population• Strict planning policies on store development• High operating costs - labour, rents, taxation• Shareholder pressure to maintain profit
growth• The ‘me too’ syndrome in retailing
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PULL FACTORS OF THEINTERNATINALISATION OF RETAILING
• Underdevelopment of some markets or weak competition
• Strong economic growth or rising standards of living• High population growth or high concentration of young
adults• A relaxed regulatory framework• Favourable operating costs - labour, rents, taxation• The geographical spread of trading risks• Opportunity to innovate under new marketing
conditions
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Top 10 Global Food Retailers
www.supermarketnews.com (2006)
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GLOBAL RETAILER CATEGORIES
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IMPLICATIONS FOR DISTRIBUTION STRATEGY DEVELOPMENT
• Power shifts in supply chains towards retailers• Intense concentrated competition with
significant buyer power across country markets• Rapidly advancing technology facilitating global
sourcing and global electronic transactions• Unrelenting performance measures being
demanded of suppliers by international retailers• Smart, demanding consumers expecting high
levels of customer service
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RETAILERS DEMAND
• Streamlined and flexible supply chains• Suppliers who can guarantee quality and
reliability across global markets• The ability to supply high volumes and
conduct intense relationships with intermediaries in the supply chain
• Suppliers who can meet the global sourcing requirements of large-scale retailers seeking to buy centrally across the globe
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International Market CharacteristicsFavouring internet based distribution
• Inefficiencies in traditional distribution channels
• Market fragmentation
• Minimum scale barriers
• Commodity-type products
• Short life-cycle products
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LOGISTICS APPROACH TO PHYSICAL DISTRIBUTION
Customer Service
• Order to delivery time• Consistency and
reliability of delivery• Inventory availability• Order, size constraints• Ordering convenience• Delivery time and
flexibility
• Invoicing procedures, documentation and accuracy
• Claims procedure• Condition of goods• Salesperson’s visits• Order status information• After-sales support
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LOGISTICS APPROACH TO PHYSICAL DISTRIBUTION
IT and Physical Distribution
• Information Technology– Electronic data
interchange (EDI)– ‘New silc road’– Tracking progress of
products
• Restructuring Physical Distribution Operations– Changes in trading
structures– Physical movement
is high-cost activity
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EFFECTIVE SYSTEM OF PHYSICAL DISTRIBUTION
• Requirements– clearly define areas of
responsibility– highly developed
planning system– comprehensive
information support system
– expertise in distribution management
– centralising planning body
• Considerations – How intermediaries can
enhance service– modes of transportation
to be used– how to make use of
export processing zones– documentation required– packaging requirements
for transit & the market– how should the export
sales contract be organised
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EXPORT PROCESSING ZONES
• The concept of EPZ– duty-free manufacture or processing of products for export
purposes within a customs-controlled environment
• Advantages– All goods entering the EPZ are exempted from customs duties
and import permits– Firms can use foreign currency to settle transactions– EPZs can be used for assembly of products and so help
reduce transportation costs– EPZs give greater flexibility, and help avoid unwanted
bureaucracy of customs and excise
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THE EXPORT ORDER & PHYSICAL DISTRIBUTION
