Chapter 13 - MBA Program Resources
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Transcript Chapter 13 - MBA Program Resources
Global Marketing
Management
A European Perspective
GLOBAL LOGISTICS AND
CHANNEL DECISIONS
Warren J. Keegan
Bodo B. Schlegelmilch
Overview
The Nature of Global Logistics and Channel
Decisions
In-Bound and Out-Bound Logistics
International Channel Strategies
Characteristics Impacting on Channel Design and
Strategy
Global Trends in Channel Design and Strategy
Summary
Keegan/Schlegelmilch
Global Marketing Management: A European Perspective
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Learning Objectives
Recognise the complexity of global logistics
Know the key decisions within in-bound logistics and
the factors impinging on these decisions
Learn about out-bound logistics and know which tasks
need to be taken care of in this respect
Know which characteristics influence the design of
distribution channels for international markets
Know how new developments reshape international
distribution
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The Nature of Global Logistics and
Channel Decisions I
International distribution encompasses two areas
of responsibility:
Channel management
identifying, selecting and supporting distribution partners
distribution partners bridge the gap between manufacturer and
customer
Global logistics
ensuring adequate supply
the right products are made available to customers when and
where they want them
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The Nature of Global Logistics and
Channel Decisions II
The value chain
In fo rm atio n &
R esearch
T arget M ark etin g
Selectio n
Pu rch asin g
Inbo und
L o g istics
R & D
Pro d u ct Po licy &
Strategy
Pricin g Po licy &
Strategy
A ssem b ly &
M an u factu rin g
D istributio n P o licy
& Stra teg y
O utbo und
L o g istics
C o m m u n icatio n
Po licy & Strategy
M ark etin g
In stallatio n & T estin g
Serv ice
M argin
-
M essages, ap p eals
M ed ia Strategy & Plan
A d v ertisin g Plan
Pro m o tio n Plan
Perso n al Sellin g
D irect M ark etin g Plan
D irect M ail
T elem ark etin g
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The Nature of Global Logistics and
Channel Decisions III
The value chain provides a useful framework for
integrating various organisational activities related
to global distribution
Today, distribution activities are becoming
increasingly intertwined, i.e.
sourcing material and parts for production
taking care of product shipment
selecting suitable distribution partners
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Global Marketing Management: A European Perspective
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In-Bound Logistics I
In-bound logistics describes the process of moving
products and materials from suppliers to the
factory
Six factors must be taken into account
factor costs and conditions
transport costs
country infrastructure
political risk
market access
currency issues
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Global Marketing Management: A European Perspective
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In-Bound Logistics II
Factor costs and conditions
land
labour, including the cost of workers
manufacturing and production
professional and technical
management
capital cost
The cost of these factors depends on
availability
relative abundance
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Global Marketing Management: A European Perspective
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In-Bound Logistics III
World factor costs that affect manufacturing
industrialised countries
factor costs are tending to equalise
industrialising countries (Singapore, other Pacific
Rim countries)
offer significant factor costs savings
offer an increasingly developed infrastructure and
political stability
Russia and other countries
lower factor costs (especially wages) are offset by limited
infrastructure development and greater political
uncertainty
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Global Marketing Management: A European Perspective
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In-Bound Logistics IV
Transport Costs
Country Infrastructure
Political Risk
Market Access
Foreign Exchange
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Global Marketing Management: A European Perspective
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Out-Bound Logistics
Moving products from
customers
It involves aspects of
the
factory
to
transportation,
inventory control,
order processing and
warehousing
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Global Marketing Management: A European Perspective
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International Channel Strategies
The purpose of marketing channels is to
create utility for customers
place
time
form
information
Two forms of channel strategy
direct involvement
indirect involvement
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Characteristics Impacting on
Channel Design and Strategy I
Customer characteristics
customer number, geographic distribution, income,
shopping habits, reactions to different selling methods
Product characteristics
perishability, service requirements or unit price
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Characteristics Impacting on
Channel Design and Strategy II
Middleman characteristics
attitude towards the manufacturer
selection and care of distributors and agents
distributor and agent performance
termination
Environmental characteristics
economic, social and political dimensions
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Global Trends in Channel Design
and Strategy I
Global Retailing
today
future
Direct Marketing
distribution system, where sales to customers are
carried out via telephone, mail or door-to-door
one-on-one approach is effective for products which
need demonstration or complex explanation
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Global Trends in Channel Design
and Strategy II
E-Commerce and International Distribution
Strategies
Design of appropriate distribution systems
E-Tailing
describes the increasing trend of retail operations
globalising via the Internet
presenting and selling a product range over the
Internet gains increasing importance
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Global Marketing Management: A European Perspective
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Global Trends in Channel Design
and Strategy III
Alternative Channel Responses
C
h
an
n
el D
ecision
E
lectron
ic
C
om
m
erce
M
anufacturer
D
irect
P
h
ysical
D
istrib
u
tion
E
xisting
R
etailerO
nline
T
raditional
R
etailer
C
y
berm
ediary
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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
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