Transcript 8.01 Channel Design

Chapter 8
International Marketing
Channels
8.01 International Channel Design
International Marketing
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Winning Strategies - read
Open All Night Everywhere
 7-Eleven stores are open 24 hours a
day.
 7-Eleven stores have improved their
efficiency through the use of
technology.
 There are almost 28,000 7-Elevens
around the world.
Chapter 8
Slide 2
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Warm-up video
 http://www.youtube.com/watch?v=Tb8b
F2hCyLw
 A quick overview of channel
management
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MARKETING CHANNELS
 channel of distribution
 the path used to move products from their
source to the customer
 logistics
 activities that create an orderly and timely
acquisition and transportation of products
through the channel of distribution
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Channel Length
 marketing intermediary
 an independent business that assists the
flow of goods and services from producer
to customers
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Slide 5
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Types of marketing
intermediaries
 Agent/broker
 Place buyers and sellers together
 Facilitate transactions
 Do not take ownership of product
 Wholesaler
 Re-distributes to retailers
 Take ownership of products
 Retailer
 Redistributes to consumers
 Take ownership of products
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Channel Length (continued)
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Channel Length
(continued)
 short channel of distribution
 Few intermediaries
 direct channel
 From producer directly to consumer
 long channel of distribution
 Many intermediaries
 indirect channel of distribution
 Used primarily for consumer goods
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Role of Intermediaries
 Breaking bulk shipment into smaller
quantities
 Provide information to other channel
members
 Storage of products
 Transportation of products
 Provide financing
 Promote products
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Channel Length
(continued)
 Channels of distribution have become a
key to international competitiveness
because they can:




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facilitate just-in-time (JIT) inventory
lower costs
speed up distribution
support expansion into new markets
International Business
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Just-in-time inventory
 Products arrive just as they are needed
 Utilize computerized inventory and
point-of-sale systems to monitor
inventory levels and place orders
 http://www.youtube.com/watch?v=AqK8VcLOxH8
 http://www.youtube.com/watch?v=AAcX0SRjOCw
 Two videos on just in time
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International Channel Design
 When entering new markets,
international marketers can either:
 establish a new channel of distribution
 High risk strategy
 Need to develop new relationships with
suppliers
 work within an existing channel of
distribution
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Total Cost Concept
 total cost concept
 all costs must be taken into consideration
when designing a channel of distribution
 Added shipping costs
 Transportation time must also be considered
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IBH – 8.01 Activity
 Students pair with someone other than their IBP partner
 Research an automobile manufacturer who has opened
up a manufacturing plant in a foreign country in order to
lower total cost of distribution to that country
 http://www.kia.com/#/about/
 http://corporate.honda.com/america/facilities.aspx
 https://www.bmwusfactory.com/
 http://corporate.ford.com/our-company/operationsworldwide

http://media.gm.com/autoshows/Chevrolet_Centennial/2010/public/intl/en/chevrolet/news.detail.html/
content/Pages/news/intl/en/2011/centennial/03_01_the_first_100_years.html
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Slide 14
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>> C H E C K P O I N T
Name four ways distribution channels aid
in developing competitive advantages.
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CHANNEL RELATIONSHIPS
 All distribution systems seek to achieve
the lowest cost possible.
 Can result in disintermediation
 the removal of channel members to save costs
 http://www.youtube.com/watch?v=LACYuGoP4IE
 Examples of results due to disintermediation
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Channel Power
 Some channel members have more
power than others
 channel captain – example UD
 takes the leadership role in organizing a
distribution system
 gains power through their ability to reward
or punish channel members and through
their knowledge of their product-market
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Finding International Partners
 There are a number of ways for
international marketers to find partners.
 government sources from commerce
departments
 trade show contacts
 Internet
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Finding International Partners
(continued)
 export management companies
(EMCs)
 specialize in helping businesses distribute
products
 agent
 brings together buyers and sellers, but
does not take ownership of product
 http://www.youtube.com/watch?v=qDbnx6nLrQo
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Slide 19
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>> C H E C K P O I N T
Name four ways that businesses can find
international partners.
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Slide 20
International Business
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