Uluslararası Pazarlama GLOBAL MARKETING CHANNELS AND PHYSICAL DISTRIBUTION Lecture 9 &12. GLOBAL MARKETING CHANNELS AND PHYSICAL DISTRIBUTION Lecture 9CHANNEL OBJECTIVES PLACE (the availability of a product or service in a location that is convenient to a potential customer) TIME (the availability of a product or service when desired by a customer) FORM (the availability of a product processed, prepared, in proper condition and/or ready to use) INFORMATION (the availability of answers to questions and general communication about useful product features and benefits) CHANNEL OBJECTIVES A basic source of competitive advantage ? An important element of the firm ’ s overall ? value propositionThe Coca-Cola Company ’ s global marketing leadership position is based in part on its ability to put Coke “ within an arm ’ s reach of desire ”CHANNEL OBJECTIVES What are the target market? 1. Where are they located? 2. What are their information requirements? 3. What are their preferences for service? 4. How sensitive are they to price? 5.CHANNEL OBJECTIVES Retailers from Europe and Asia studied self service discount retailing in the USA and then introduced the self-service concept in their own countries. Similarly, governments and business executives from many parts of the world have examined Japanese trading companies to learn from their success. DISTRIBUTION CHANNELS: TERMINOLOGY AND STRUCTURE Distribution channels are systems that link manufacturers to customers. B2C Marketing – consumer channels are designed to put products in the hands of the people for their own use. B2B Marketing involves industrial channels that deliver products to manufacturers or other organizations that use them as inputs in the production process or in day-to-day operations. intermediaries play important roles in both industrial and consumer channels: A distributor is a wholesale intermediary that typically carries product lines or brands on a selective basis. An agent is a whole sale intermediary who negotiates exchange between 2 or more parties but doesn ’ t take title to the goods being purchased or sold. DISTRIBUTION CHANNELS: TERMINOLOGY AND STRUCTURE CONSUMER PRODUCTS AND SERVICES 1. INDUSTRIAL PRODUCTS 2.CONSUMER PRODUCTS AND SERVICES The number of individual buyers and their geographic distribution, income, shopping habbits, and reaction to different selling methods frequently vary from country to country and may require different channel approaches. Time utility PlaceNestle Door-to-Door Celia Silva Missio, left, offers Nestle products to Fabiana da Silva, center, and Alex Angelo de Souza while selling door-to-door in Paraisopolis, a slum in Sao Paulo, Brazil. (Douglas Engle) Low-cost, mass market non-durable products and certain services can be sold door-to-door via a direct sales. By the mid-1990s, AIG had 5,000 agents selling insurance policies door to-door in China. This innovative channel strategy was so successful that domestic Chinese companies such as People ’ s Insurance and Ping An Insurance had copied it. In Japan, the biggest barrier facing US auto manufacturers is the fact that half the cars are sold each year are sold door to door. Toyota and other Japanese companies employ more than 100,000 car sales people. Japanese car buyers never visit dealerships. Japanese car buyers expect numerous face-to-face meeting with a sales representative, during which trust is establised. The relationship constinues after the deal is closed; sales reps send cards and continually try to ensure the buyer ’ s satisfaction. manufacturer-owned store A company established worldwide chain of company-owned and operated outlets to sell and service sewing machines. Branded stores - to provide an interactive shopping experience and build brand loyalty. “ buy-in-bulk consumer mentality ” in affluent countries “ buy several times each day in a tiny, independent, mom-and-pop stores, kiosks and market stalls consumer mentality ” in emerging countriesCompanies can and should vary their strategies as market conditions change. INDUSTRIAL PRODUCTSESTABLISHING CHANNELS AND WORKING WITH CHANNEL INTERMEDIARIES Direct involvement (the company establishes ? its own sales forces or operates its own retail stores) Indirect involvement (the company utilizing ? independent agents, distributors, and agents)Channel strategy in a global marketing program must fit the company ’ s competitive position and overall marketing objectives in each national market. Direct involvement = expenses Companies entering emerging markets for the 1st time must exercise particular care in choosing a channel intermediary. Local distributor is required for limiting risks and expenses. GLOBAL RETAILING ……… ..IS ANY RETAILING ACTIVITY THAT CROSSES NATIONAL BOUNDARIES GLOBAL RETAILING The oldest covered shopping center in the world (with nearly 3,600 shops selling gold and souvenirs, about 500,000 visitors every day)GLOBAL RETAILING more products and lower prices GLOBAL RETAILING India- retailing sector is expected to exhibit double-digit growth. Giants of global retailing must compete with stores operated by local retail chains. In the last year, Reliance Retail Limited (RRL) continued to fulfill its commitment of enriching Indian consumer ’ s shopping experience and providing quality merchandise at an attractive value proposition. More than 3 years into operation, RRL has now expanded its presence in more than 85 cities across 14 states in India. RRL forged ahead with its expansion plans and rolled out stores across the country. http://www.ril.com/html/business/business_retail.htmltypes of retail operations Department stores ? Specialty retailers ? Supermarkets ? Convenience stores ? Discount retailers ? Hard discounters ? Hypermarkets ? Shopping malls ? Outlet stores ?department stores several departments under one roof, each representing a distinct merchandise line and staffed with a limited number of salespeople STORE ORIGINAL STORE LOCATIONS GLOBAL LOCATIONS HARVEY NICHOLS UK SAUDI ARABIA, HONG KONG, IRELAND, DUBAI SAKS FIFTH AVENUE US DUBAI, SAUDI ARABIA, MEXICO BARNEYS NY US JAPAN LANE CRAWFORD HONG KONG CHINA, TAIWAN H&M (HENNES-MAURITZ) SWEDEN AUSTRIA, GERMANY, KUWAIT, SLOVAKIA, US, 20 OTHERS Table 1: department stores with global branchesspecialty retailers Stores offer less variety than department stores. They are more narrowly focused and offer a relatively narrow merchandise mix aimed at a particular target market. a great deal of merchandise depth(styles,colors,sizes), ? high levels of service from knowledgeable staff ? value proposition (clear and appealing to consumers) ?supermarkets Single-story retail establishments that offer a variety of food and non-food items, mostly on a self-service basis. Home-country sales account %80 of overall sales, the company has operations in more than a dozen foriegn countries.convenience stores Offer some of the same products as supermarkets. Prices may be 15 to 20% higher than supermarket prices. Square footage of the shops is small. Stores are located in high-traffic locations and offer extended service hours to accomodate commuters, students, and others highly mobile consumers. Store (3,000square feet-0,279 m2) has a total of 26,000 locations. A trend in convenience store retailing is toward smaller stores placed inside malls, airports, office buildings, and in college and university buildings. discount retailers Emphasis on low prices Full-line discounters offer a wide range of merchandise, incl. non-food items and non perishable food, in a limited service format. Dollar stores sell a select assortment of products at a single price. hard discounters Sell a tightly focused selection of goods (900 to 1,600 items) at very low prices, account for about 10% of grocery sales in Europe, rely heavily on private brands. hypermarkets A hybrid retailing format combining the discounter, supermarket, and warehouse club approaches under a single roof. Size-wise, hypermarkets are huge, covering 200,000 square feet (18,581 m2)to 300,000 square feet (27,871 m2). superstores Sell vast assortments of a particular product category – toys or furniture- in high volumes at low prices. shopping malls Consist of a grouping of stores in one place. “ lifestyle centers ” http://www.youtube. com/watch?v=dGpuu II_FMcoutlet stores A variation on the traditional shopping mall: retail operations that allow companies with wellknown consumer brands to dispose of excess inventory, out-of-date merchandise, or factory seconds. Find impressive savings at Adidas, Balenciaga, Banana Republic, Burberry, Brooks Brothers, Calvin Klein, Coach, Dior, Giorgio Armani, Gucci, J.Crew, Lacoste, Last Call by Neiman Marcus, Nike, Polo Ralph Lauren, Prada, Saks Fifth Avenue Off 5th, Tod's and more.Global Retailing Market Expansion Strategies Culturally close (strong competitors,high) rent or real estate costs) Easy Difficult to enter to enter Culturally distant D ORGANIC A CHAIN ACQUISITIONS C FRANCHISE B JOINT-VENTURE, LICENCINGorganic growth Occurs when a company uses its own resources to open a store on a greenfield site or to acquire one or more existing retail facilities from another company. Fe: M&S, 1997, announced plans to expand from one store to 4 in Germany via the purchase of 3 stores operated by Gramer and Meerman. franchising Is the appropriate entry strategy when barriers to entry are low yet the market is culturally distant in terms of consumer behavior or retailing structures. acquisition Is a market entry strategy that entails purchasing a company with multiple retail locations ina foreign country. This strategy can provide the buyer with quick growth as well as access to existing brand suppliers, distributors and customers. joint ventures or licensing Is a market entry strategy for limiting risks when targeting unfamiliar, difficult-to-enter markets. Licensed storesPHYSICAL DISTRIBUTION, SUPPLY CHAINS, AND LOGISTICS MANAGEMENT Supply chain includes all the firms that perform support activities by generating raw materials, converting them into components or finished products, and making them available to customers. Logistics is the management process that integrates the activities of all companies to ensure an efficient flow of goods through the supply chain. the most important distributions activities: Order processing ? Warehousing ? Inventory management ? Transportation ?Order processing ? …… .provides information inputs that are critical in fulfilling a customer ’ s order. Order entry (the order is actually entered into a ? company ’ s information system) Order handling (involves locating, assembling, and ? moving products into distribution ) Order delivery (the process by which products are ? available to the customer) Warehousing ? ………… .are used to store goods until they are sold; another type of facility, the distribution center, is designed to efficiently recieve goods from suppliers and then fill orders for individual stores or customers. 3rd party warehousing is needed to reduce fixed costs and speed up delivery times to customersInventory management ? …… .ensures that a company neither runs out of manufacturing components or finished goods nor incurs the expense and risk of carrying excessive stocks of these items. Transportation ? ………… ..concern the method or mode a company should utilize when moving products through domestic and global channelsIntermodal transportation ………… .involves a combination of land and water shipping from producer to customer.