SOMTU Part IV: Designing the global marketing program-Distribution decisions

Lecture No. 8-1

Distribution decisions
(03 Sept 2021)

Global Marketing Strategy

By: Roshendra Dhoj Khadka 1
 SOMTU Chapter
Part IV: Designing the global marketing 16 Dis tribution decisions
program-Distribution decisions

Figur e 16.1 Channel decis ions Channel decisions

(Source: Hollensen & Banerjee, 2010, p.515)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 2
 SOMTU Part IV: Designing the global marketing program-Distribution decisions

• Customer’s income and product experience

• Perception of the target
customers hold
• Customer’s income, product Nature of
experience demand/locatio • Exclusivity with the foreign wholesaler
n

Nature of
Competition
product

External Legal
Customer determinants regulation/local
characteristics of channel business
decisions practices

• Consumer product channel is • Law for specific channel

longer than the industrial • Long intermediaries
product channel

(Source: Hollensen & Banerjee, 2010, p.516-517)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 3
SOMTU Part IV: Designing the global marketing program-Distribution decisions

The structure of the Market • Intensive; Selective & Exclusive

coverage
• Longer: Convenience & mass distribution
Channel length
channel

Example: Japan
• Price increases

• Consistent image of quality and service

Control/cost • Strategic role assigned to different market
• Trade-off of the control mechanism

• One channel system/Unification

Degree of • Vertical integration & Horizontal integration
integration

(Source: Hollensen & Banerjee, 2010, p.519-522)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 4
SOMTU Part IV: Designing the global marketing program-Distribution decisions
Part IV Des igning the global m arketing programm e

Three strategies for Market coverage

Figur e 16.4 Three s tr ategies for mar ket coverage

Source: Lewison, 1996, p. 271.

(Source: Hollensen & Banerjee, 2010, p.420)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 5
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Figur e 16.5 Factor s influencing channel widthchannel length

Factors influencing

Source: adapted from Lewis on, 1996, p. 279. (Source: Hollensen & Banerjee, 2010, p.420)
Global Marketing Strategy
By: Roshendra Dhoj Khadka 6
he global marketing programme
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Figure 16.6 Vertical integration Vertical integration

(Source: Hollensen & Banerjee, 2010, p.522)

1 vertical integration : seeking control of channel members at different levels of the7
Global Marketing Strategy
By: Roshendra Dhoj Khadka
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Managing & controlling distribution channels

Source: Hollensen & Banerjee, 2010, p.522)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 8
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Screening &
selecting
intermediaries

Contracting
Termination (distributor
agreements)
Managing
&
controlling
distribution
channels

Controlling Motivating

(Source: Hollensen & Banerjee, 2010, p.523-527)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 9
 SOMTU Part IV: Designing the global marketing program-Distribution decisions
Part IV Des igning the global m arketing program m e

Screening & selecting intermediaries

Figur e 16.7 Cr iter ia for evaluating for eign dis tr ibutor s
Criteria for evaluating foreign distributors

Source: Adapted from Cavus gil et al. (1995). (Source: Hollensen & Banerjee, 2010, p.524)
Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Inventory (at the

Freight forwarders
factory base)

Storage/warehousin
Transportation g (in foreign
markets)

Most common
Packaging
export documents

Order handling
Managing Third-party logistics

logistics (contract logistics)

• Material management
• Physical distribution
(Source: Hollensen & Banerjee, 2010, p.527-533
Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
 SOMTU Part IV: Designing the global marketing program-Distribution decisions

The
Figure 16.9 The expor t procedure export procedure

Source: Albaum et al., 1994, p. 419.

(Source: Hollensen & Banerjee, 2010, p.528)
Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Transportatio
Government n

Commercial Banking
Common
export
document

(Source: Hollensen & Banerjee, 2010, p.528)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Implication of the internet for distribution decisions

Disintermediatio
n

Intermediation Reintermediation

E-
Commerce

(Source: Hollensen & Banerjee, 2010, p.533-535)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Global Marketing Strategy

By: Roshendra Dhoj Khadka 1
 SOMTU Part IV: Designing the global marketing program-Distribution decisions

Implication of the internet for distribution decisions

• Conflict between resellers in Leave internet

different territory Leave internet business to • Competition with its own
• Manufacturer’s website rather business to the distributors
than reseller’s website resellers manufacturer • Compaq: Different line of
only products

Present only Open internet

product info business to
on the internet Internet everybody
distribution
strategies
• Relationship with distributors
(manufacturer)
• Product information • Open to direct sales and resellers
• Appropriate industry: Aircraft
manufacturing
• Fear of cannibalization of the
distributors

(Source: Hollensen & Banerjee, 2010, p.533-535)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

International Retailing

Internationalization of retailing

Stages of internationalization

Cross border alliance (Source: Hollensen & Banerjee, 2010, p.535-540)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Channel Power In International Retailing

(Source: Hollensen & Banerjee, 2010, p.540)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Currency fluctuation

(Source: Hollensen & Banerjee, 2010, p.540)

Global Marketing Strategy
By: Roshendra Dhoj Khadka 1
SOMTU Part IV: Designing the global marketing program-Distribution decisions

Thank you

Global Marketing Strategy

By: Roshendra Dhoj Khadka 2