International Marketing国际市场营销学国际市场营销学International Distribution ChannelsChapter 11Chapter Outline1. Nature of Distribution Channels 2. Distribution Channels Strategy3. Distribution Channel Structures4. Locating Selecting and Motivating Channel Members5. Internet and Distribution Channels1. Nature of Distribution Channelsl1.1 Distribution channelChannels of Distribution is known as Place in the 4 Ps model of Marketing. Distribution Channels provide the utility of place, of having products where the customer wants when the customer wants them. Channels of Distribution is defined as an organized network (system) of agencies and institutions which, in combination, perform all the functions required to link producers with end customers to accomplish the marketing task.Distribution has two dimensions:Logistics- Physical movement of goodsStrategy- Who participates and what they do1. Nature of Distribution Channelsl1.2 Distribution channel functions1.Information2.Promotion3.Contact4.Matching(including such things as manufacturing, grading, assembling, and packaging)5.Negotiation6.Physical Distribution(transporting and storing)7.Financing8.Risk Taking1. Nature of Distribution Channelsl1.3 Intermediaries (Middlemen)Intermediary within a channel of distribution used to transfer products from the manufacturer to the end user. Those who actually take title to the products and resell them are merchant middlemen. Those who act as brokers but do not take title are agent middlemen. Merchant middlemen include wholesalers and retailers. Agent middlemen include manufacturers representatives, brokers, and sales agents. Nature of Distribution ChannelsHome-Country Middlemen1.Manufacturers Retail Stores 2.Global Retailers 3.Export Management Companies 4.Trading Companies 5.U.S. Export Trading Companies 6.Complementary Marketers 7.Manufacturers Export AgentHome-country middlemen, or domestic middlemen, provide marketing services from a domestic base and find foreign markets for products for local manufacturersFrequently used types of domestic intermediaries include:8.Home-Country Brokers 9.Buying Offices 10.Selling Groups11.Webb-Pomerene Export Associations 12.Foreign Sales Corporation 13.Export Merchants 14.Export JobbersForeign-Country Middlemen1.Manufacturers Representatives 2.Distributors3.Foreign-Country Brokers 4.Managing Agents and Compradors 5.Dealers 6.Import Jobbers, Wholesalers, and RetailersSome of the more important foreign-country middlemen, who find markets for foreign manufacturers include: Think and AnswerlYouve probably heard someone say, “The reason products cost so much is all the intermediaries.”-Do intermediaries increase the cost of products?-Would consumers be better off or worse off without intermediaries?2.Channel-of-Distribution StrategieslTypes of intermediaries (Length of Distribution Channel)lDistribution Intensity (Width of Distribution Channel )2.Channel-of-Distribution StrategieslTypes of intermediaries (Length of Distribution Channel)Direct Distribution (short)A channel whereby goods and services are sold directly from producer to final user without involvement of other independent middlemen.Dell, Direct-distribution modelEliminates wholesalers and retailers.Complete control over inventory levels and distribution costs.Direct monitor its customers needs.“You can eliminate the middleman, but not the function.”2.Channel-of-Distribution StrategieslTypes of intermediaries (Length of Distribution Channel)Indirect Distribution (long)A channel whereby goods and services are sold indirectly from producer through independent middlemen to final users. Think and AnswerlDell Computer has used one simple supply chain systemdirect sales over the Internet or by phone to both business and consumer users.-If you were a marketing executive at Dell, what new supply chain options would you suggest?2.Channel-of-Distribution StrategieslDistribution Intensity (Width of Distribution Channel )Intensive Distribution (广泛分销)Stocking the product in as many outlets as possibleUsed for Convenience Goods Selective Distribution (选择性分销)Using more than one but fewer than all of the intermediaries who are willing to carry the companys products Used for Shopping Goods Exclusive Distribution (独家分销)Giving a limited number of dealers the exclusive right to distribute the companys products in their territories Used for Specialty Goods 3.Channel-of-Distribution StructureslAll consumer and industrial products eventually go through a distribution process.Physical handling and distribution of goodsPassage of ownershipBuying and selling negotiations between producers and middlemenBuying and selling negotiations between middlemen and customerslEach country market has a distribution structure through which goods pass from producer to user.Japan VS. US Channel structure (P251)German, Japan, US Retail structure (P251) Think and AnswerLearning the above materials, what can you tell the distinguishing differencies that Japans Distribution Channel structure has between USs?1.Cost2.Capital Requirements3.Control4.Coverage5.Character6.ContinuityChannel strategy itself is considered to have the following six specific strategicgoals:4.Choice of Channels- 6CsLocating Middlemen (a) reputation(b) creditworthiness(c) markets served(d) products carried(e) number of stores(f) store sizeIn selecting middlemen, the following criteria should be adopted.Motivating MiddlemenMotivational techniques may be grouped intofive categories: (1) financial rewards(2) psychological rewards(3) communications(4) company support, and (5) corporate rapportThere is a clear correlation between the middlemans motivation and salesvolume5.The InternetlWhen using the internet for distribution purposes, the following factors should be considered:1.Culture2.Adaptation (especially of language)3.Local contact information4.Payment form5.Delivery6.PromotionE-commerce is used to market business-to-business services, consumer services, and consumer and industrial products via the World Wide WebThe Internet is an important distribution method for multinational companiesChapter SummarylFrom the foregoing discussion, it is evident that the international marketer has a broad range of alternatives for developing an economical, efficient, high-volume international distribution system. To the uninitiated, however, the variety may be overwhelming.lCareful analysis of the functions performed suggests more similarity than difference between international and domestic distribution systems; in both cases the three primary alternatives are using agent middlemen, merchant middlemen, or government-affiliated middlemen. lIn many instances, all three types of middlemen are employed on the international scene, and channel structure may vary from nation to nation or from continent to continent. Chapter SummarylThe neophyte company in international marketing can gain strength from the knowledge that information and advice are available relative to the structuring of international distribution systems and that many well-developed and capable middleman firms exist for the international distribution of goods. lAlthough international middlemen are more numerous, more reliable, and more sophisticated within the past decade, traditional channels are being challenged by the Internet, which is rapidly becoming an important alternative channel to many market segments. lSuch growth and development offer an ever-wider range of possibilities for entering foreign markets.Key Termsldistribution process ldistribution structure lLarge-Scale Retail Store Location Act lagent middlemen lmerchant middlemen l compensation deallcounterpurchase lproduct buy-back agreement ltransfer pricing ladvanced pricing agreement ladministered pricing lcartel