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Global Marketing Management
Warren J. Keegan
Chapter 13 Global Marketing Channel and Physical Distribution Decisions
Keegan:Global Marketing Management Chapter 13 / 2
Overview
Channel Objectives & ConstraintsDistribution Channels International Channel InnovationChannel Strategy for New Market EntryPhysical distribution & logistics Case Example: JapanSummary
Keegan:Global Marketing Management Chapter 13 / 3
Learning Objectives
Recognize the complexity of global channels & distribution
Know which characteristics influence the design of distribution channels for international markets
Know how new developments reshape international distribution
Keegan:Global Marketing Management Chapter 13 / 4
Channel Objectives
Create utility of place, time & information Can be a source of competitive advantageImportant because of number & nature of
relationshipsMust analyze each marketMust fit overall marketing objectives of
company
Keegan:Global Marketing Management Chapter 13 / 5
International Channel Strategies
Two forms of channel strategy direct involvement
Own sales force, retail stores, etc. indirect involvement
Independent agents, distributors, wholesalers
Keegan:Global Marketing Management Chapter 13 / 6
Characteristics Impacting on Channel Design and Strategy I
Customer characteristics customer number, geographic distribution,
income, shopping habits, reactions to different selling methods
Need for multiple channels increases as the number of customers increased
Product characteristics perishability, service requirements, bulk
Keegan:Global Marketing Management Chapter 13 / 7
Characteristics Impacting on Channel Design and Strategy II
Middleman characteristics attitude towards the manufacturer
selection & care of distributors & agentsdistributor & agent performancetermination
Environmental characteristics economic, social & political dimensions
Keegan:Global Marketing Management Chapter 13 / 8
Distribution Channels for Consumer Products
Door-to-doorManufacturer-owned storeFranchise operationsCombined structures
Keegan:Global Marketing Management Chapter 13 / 9
Top 5 Food Franchises Abroad
Chain: Intl share
1. McDonald’s 49%
2. KFC 52
3. Pizza Hut 35
4. Burger King 21
5. Tim Hortons 97Source: Restaurant Business
Keegan:Global Marketing Management Chapter 13 / 10
Distribution Channels for Industrial Products
3 Options Manufacturer’s sales forces Distributor Wholesaler
B2B is rapidly growing
Keegan:Global Marketing Management Chapter 13 / 11
International Channel Innovation
Only in the most highly developed systems
Directly related to level of economic development
Helped or hindered by local demographic/geographic factors, social mores, government action, competitive pressures & infrastructure
Accelerated by actions of aggressive individual firms
Keegan:Global Marketing Management Chapter 13 / 12
Strategy for New Market Entry
Use established channels, build own channels or abandon the market
Must provide incentive to channel agents to take on a new product
Either using existing channels or establishing their own direct distribution is expensive
Direct distribution is most effective
Keegan:Global Marketing Management Chapter 13 / 13
Physical Distribution & Logistics
Order processingWarehousing Inventory managementTransportation
Keegan:Global Marketing Management Chapter 13 / 14
Summary
Channel decisions are difficult to manage globally A global marketer must
tailor the marketing program to different types of channels
or introduce new retail concepts
Retailing will see an increasing trend towards globalisation of operations