chapter fifteen global distribution mkt568 global marketing management dr. fred miller 3-1
TRANSCRIPT
Chapter Fifteen Global Distribution
Chapter Fifteen Global Distribution
MKT568
Global Marketing Management
Dr. Fred Miller
3-1
Sample Essay Question
DeutscheDrives is German producer of computer storage devices and media. The firm wishes to build upon its success in European markets by expanding to Asia, Africa, North and South America.
1. Identify and describe the three general international marketing strategies. (6 points)
2. For each element of the marketing mix (product, price, promotion and distribution), identify and describe one benefit of a global strategy and one constraint to implementing such a strategy. (12 points)
3. Which of the three general marketing strategies do you recommend to DeutscheDrives? Explain why. (2 points)
Benefits of Standardized Distribution
Cost reduction shipping and merchandising costs
channel management costs
Control of marketing strategy
Consistency of positioning
Logistic efficiency
Constraints on Standardization
Wholesaling and Retailing Structureswholesaling; types, business practices, integration
retailing practices; integration, lifestyles, global retailing, retailing channel captains, PoP IT
Adjusting Channel Relationshipschanging distributors, dual distribution
shortening channels, integration
creating new channels
Data Archaeology:Profiling Web Customers
Size and Number of Wholesalers in Selected Countries
Size and Number of Wholesalers in Selected Countries
14-2
Exhibit 14.1 Source: Retailing in the European Single Market, 1993. These figures are adapted from Table EUR1a:“Importance of Commerce in the EC—absolute values (1987-91)”
# of enterprises Employees Revenue Emp/Ent Rev/Ent
(thousands) (thousands) (bill ECU) (mill ECU)
Belgium 48 202 85 4.2 1,771
Denmark 36 166 60 4.6 1,676
Greece 28 115 — 4.1
France 132 1,049 312 7.9 2,356
Ireland 4 40 12 11.5 3,429
Italy 193 1,084 — 5.6
Luxembourg 2 11 5 5.7 2,632
Netherlands 72 360 135 5.0 1,878
Portugal 31 200 — 6.4
United Kingdom 143 921 310 6.5 2,172
United States 470 4,578 1,260 9.8 2,684
Japan 436 4,332 2,651 9.9 6,075
Size and Number of Retail Outlets in Selected Countries
Size and Number of Retail Outlets in Selected Countries
14-7
Exhibit 14.4 Source: Retailing in the European Single Market, 1993. These figures are adapted from Table EUR1a: “Importance of Commerce in the EC—absolute values (1987-91)”
# of enterprises Employees Revenue/Ret to Whol Ratio
Emp/Ent Rev/Ent
(thousands) (thousands) (bill ECU) (mill ECU)
Belgium 128 275 35/41% 2.1 274
Denmark 48 200 24/40% 4.2 499
Greece 175 338 20 1.9 114
France 462 2,090 260/83% 4.5 563
Ireland 29 131 11/92% 4.5 375
Italy 930 2,401 230 2.6 247
Luxembourg 4 18 3/60% 5.2 857
Netherlands 95 638 45/33% 6.7 474
Portugal 173 366 20 2.1 115
United Kingdom 348 3,030 280/90% 8.7 804
United States 1,504 19,085 1,350/107% 12.7 898
Japan 1,620 6,851 682/26% 4.2 421
Japanese Import Distribution Alternatives - Distribution Route of Italian Spaghetti
Japanese Import Distribution Alternatives - Distribution Route of Italian Spaghetti
14-3
Processing and
packing plant
Import agent
Producer
Primarywholesaler
Intermediary wholesaler
Small wholesaler
Retailer
Conventional Route
Restructured Route
Retail price: 170yen/300g package
Retail price: 128yen/300g package
Depots Distribution Wholesalers Distribution
centers
Retailer
Processing and
packing plant
Importing company
A/C
Producer
Savings: 25%
Source: Allied Import Company, as reproduced in Michael R. Czinkota, and Jon Woronoff, Unlocking Japan’s Markets. Chicago, IL: Probus, 1991, p. 104. Used with permission.
Exhibit 14.2
14-4 International comparison of Wholesale Trade Practices
International comparison of Wholesale Trade Practices
Practice Japan United States Britain
Returned Goods
• Returning unsold goods is common
• Doesn't exist except for imperfect or damaged goods
• Doesn't exist except for imperfect or damaged goods
Rebate system • Diverse complicated structure (volume, fixed date, evaluation, promotion)
• Long term in pay unit (yearly, half-year, etc.)
• Rebates are not necessarily open
• No rebates but discounts and allowances exist
• Open rule • Pay unit depends
• Quantitative and date fixed rebates exist
• Open rule • Pay unit depends
Quotations • MSRP’s exist • Written materials and
certain drugs and cosmetics are allowed to maintain resale prices
• Manufacturer's suggested retail prices exist
• Doesn't exist in principle
• Books and drugs are allowed to maintain resale prices Exhibit
14.3Source: Distribution Economics Institute, Survey on International Comparison on the Distribution Industry, May 1990.
Global Logistics and Channels
Global Distribution
issues of transportation between countries
technology and competition
Modes of Transportation
air express; business and consumer markets
ocean carriers; containerization
overland; rail, truck, roll-on-roll-off
inventory management; distribution centers
Global Logistics and Channels
Parallel Distribution
definition and effects
supply, dealer, demand interference and strategic attack
Global Channels
availability, tie-up, coordination and control
Seiko’s Authorized and Unauthorized Channels of Distribution
Seiko’s Authorized and Unauthorized Channels of Distribution
14-8
Source: Jack Kaikati, “Parallel Importation: A growing Conflict in International Channels of Distribution,” Symposium on Export-Import Interrelationships, Georgetown University, November 14-15, 1985.
Distributors Distributors Distributors Distributors
Retailers Retailers Retailers Retailers
Importer Importer Importer
Europe Hong Kong Japan North America
Solid arrows denote the flow of Seiko watches through authorized channels of distribution.Broken arrows denote the flow of Seiko watches through unauthorized channels of distribution.
Exhibit 14.5
KFC in Japan Video
This video has content relevant for several topics in the course. Describe the challenges KFC has confronted in TWO of the following areas. Has the firm responded to these challenges effectively? Explain.
Japanese management styles and practicesCorporate strategies for international markets
multidomestic, global, global with localization
Product and branding strategiesMarket entry strategiesPromotion strategiesDistribution and locational strategies
Chapter Fifteen Global Distribution
Chapter Fifteen Global Distribution
MKT568
Global Marketing Management
Dr. Fred Miller
3-1
Cola Wars Video
In which countries, with what strategy and with what success has Mecca Cola chosen to challenge Coca Cola?
In which countries, with what strategy and with what success has Qibla Cola chosen to challenge Coca Cola?
How has Coca Cola responded to these challenges?
Bond’s Vodka Article
The promotional technique discussed in this article is product placement. Describe this technique and explain its value, especially for an alcoholic beverage product.
Why did Brown Forman spend as much as it did to insure that James Bond would drink Finlandia in his most recent movie? How does this effort mesh with the firm’s marketing strategy?
In your opinion, how valuable is product placement for global marketing strategies? Explain.