Chapter 12 - Global Marketing Channels and Physical Distribution Flashcards
List the guidelines companies should follow when establishing channels and working with intermediaries in global markets.
- Select distributors - don’t let them select you
- Look for distributors capable of developing markets, rather than those with a few good customer contacts
- Treat local distributors as long-term partners, not temporary market-entry vehicles
- Support market entry by committing money, managers, and proven marketing ideas
- From the start, maintain control over marketing strategy
- Make sure distributors provide you with detailed market and financial performance data
- Build links amoing national distributors at the earliest opportunity
Name Channel objectives regarding utility
Place utility:
- availability of a product or service in a location that is convenient to a potential customer
Time utility:
- availability of a product or service when desired by a customer
Form utility:
- availability of a product processed, prepared, in proper condition and/or ready to use
Information utility:
- availability of answers to questions and general communication about useful product features and benefits
Explain the terminology and structure of distribution channels
- distribution is the physical flow of goods through channels
- channels are made upp of a coordinated group of individuals or firms that perform functions that add utility to a product or service
Explain the terms distributor and agend in terms of distribution channels
Distributor: (Einkauf, wie zb bei Supermarkt)
- wholesale intermediary that typically carries product lines or brand on a selective basis
Agent: (Kommission)
- an intermediary who negotiates transactions between two or more parties but does not take title to the goods being purchased or sold
Explain Peer-to-Peer Marketing
- The Internet and other related media are dramatically altering (ändern) distribution
- Interactive TV may become a viable direct marketing channel in the future
- eBay pioneered P2P (Helped Disney and IBM set uo auction sites for B2C auctions)
- Interactive TV is coming when homes are wired for 2-way
Explain Door-to-Door Selling
- Matrue form in the U.S.
- Growing popularity in China (AIG insurance, Mary Kay, Tupperware, Avon, Amway)
- 1/2 care are sold door-to-door in Japan with 100.000 salespeople
Name consumer channels
Manufacturer-owned stores
- Walt Disney 600 new stores globally
- Nike, Levi Strauss, Apple
Independent Franchise
Independent Retailers
Flagship retail stores for Apple, Sony, well-known fashion houses, Nokia, Nike
- to build brand loyalty, showcase products, and help gather marketing intellingence
Explain retailing in developing countries
- consumers purchase food, soft drinks and other items at “Mom & Pop” stores (Tante Emma Laden), kiosks, and market stalls (Marktstände) in single use packages
- 70% of Mexicans shop at these stores
- P&G supports stores that carry at least 40 P&G products with displays (Werbeanzeigen), promo materials (Werbematerial)
Explain establishing channels via direct and indirect involvement
Direct involvement:
- the comapny establishes its own sales force or operates its own retail stores
Indirect involvement:
- the company utilises independent agents, distributors and /or wholesalers
-> Channel strategy must fit the company’s competitive position and marketing objectives within each national market
List ways of global retailing and explain smth about it.
- Department stores
- Specialty retailers
- Supermarkets
- Convenience stores
- Discount stores and warehouse clubs
- Hypermarkets
- Supercenters
- Category killers (sehr spezifisches Sortiment)
- Outlet stores
European retailers spread to colonies in the 19Th, early 20th century
Global retailers serve developing nations with more products & better prices
Organised retail refers to modern, branded chain stores
Name the top 5 Global Retailers in 2012
- Walmart Stores
- Carrefour
- Tesco PLC
- Metro AG
- Aldi
Types of retailers - describe convenience stores (Kleine shops, häufig To Go, häufig in Bahnhöfen etc)
- High-turnover convenience & impulse goods
- prices 15-20% higher than grocery stores
- 7-11 worlds largest (26000 locations)
- Trend towards locating in malls, airports, office buildings, and college & university
Types of retailers - describe department stores (Kaufhaus)
- have a product mix unter one roof
- expansion outside of the home market is usually limited to a few countries
- Two Views on it:
(1) Difficult to go global because you need to adapt your offer which dilutes your brand
(2) Easy to go global, because department stores are global brands as we all travel a lot between cities and countries
Types of retailers - describe specialty retailers
- less variety than department stores
- offer merchandise depth & high level of service
(The Body Shop, Victoria’s Secret, Starbucks)
Types of retailers - describe supermarkets
- Between 50.000 & 60.000 sq. ft. (qm)
- Grocers haven’t spread outside the US because market size is vast
- UK Tesco is global
Types of retailers - describe discount retailers and different types of it
Full-line discounters
- wide variety of merchandise (e.g. Walmart)
Warehouse Clubs
- Memberships feed (e.g. Sam’s Costco)
Dollar stores
- sell at a single low price (e.g. Familiy Dollar, Dollar Tree)
Hard discounters
- limited assortment, rock bottom prices
Types of retailers - describe hypermarkets (eg real)
- hybrid retailers combining discounter, supermarket & warehouse club (20.000-30.000 qm)
Types of retailers - describe supercenters
- have lower priced groceries + general merchandise (half of size of hypermarket)
Types of retailers - describe superstores
- aka Category Killers & Big Box
- sell vast assortment of a product category
Types of retailers - describe shopping malls
- groups of stores in one place
- enclosed or outdoor
- leisure destinations offer entertainment & convenience
Types of retailers - describe Outlet stores
- shops that offer excess inventory, out-of.date merchandise or factory seconds
- Popular in the US, expanding into Europe & Asia
What are environmental factors (Gründe/Motive) and the critical question regarding Global Retailing?
Environmental Factors:
- Saturation in the home country market
- Recession or other economic factors
- Strict regulation on store development
- High operating costs
Critical Q:
- What advantages do we have relative to the local competition?
Name and explain 4 Global Retailing Strategies
Organic growth:
- compan uses its own resources to open a store on a greenfield site or acquire one or more existing retail faclities
Franchise:
- appropriate strategy when barriers to entry are low but the market is culturally distant (entfernt) in terms of consumer behaviour or retailing structures
Chain Acquisition:
- A market entry strategy that entails purchasing a company with multiple eistion outlets in a foreign country
Joint Venture:
- This strategy is advisable when culturally distant, difficult-to-enter markets are targeted
What are the 4 Global Retailing Categories? (in a diagramme)
A Fewer categories C
Own-label focus + Manufacturers brands focus
B Many categories D
Explain/Draw the Global Retailing Market Entry Strategy Framework
D Culturally Close A
Easy to enter + Difficult to enter
C Culturally distant B
D= Organic
C = Franchise
B = Joint Venture, Licensing
A = Chain Acquisition
Define supply chain and logistics
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:
- The management process that intergrates the activities of all companies to ensure an efficient flow of goods through the supply chain
Physical Distribution, Supply Chains and Logistics Management - Explain Order Procession
includes
- order entry in which the order is actually entered into a company’s information system; - order handlung, which involves locating, assembling, and moving products into distribution; and
- order delivery
Physical Distribution, Supply Chains and Logistics Management - Explain Warehousing
- warehouses are used to store goods until they are sold
- Distribution centers are designed to efficiently receive goods from suppliers and then fill orders for individual stores or customers
Physical Distribution, Supply Chains and Logistics Management - Explain Inventory Management
- ensures that a company neither runs out of manufacturing components or finished goods nor incurs the expense and risk of carrying excessive stock of these items
Physical Distribution, Supply Chains and Logistics Management - Explain Transportation
- method or mode a company should utilise when moving porducts through domestic and global channels
- the most common modes of transportation are rail, truck, air and water
Draw the process of order processing by an example of ikea
Raw Materials ————————> Factories ————-> Retail Distribution —->Consumer
(Wood) inbound logistics Outb. logistics (IKEA stores) |———–| |
| channel of distribution
|———————————————————————————————————————–|
The supply Chain
Rate transportation ways by their mode, reliability, cost, speed, accessibility, capability, ease of tracing
Mode Reliability Cost Speed Accessibility Capability Ease of Tracing
Rail Average Average Average High High Low
Water Low Low Slow Low High Low
Truck High Varies Fast High High High
Air High High Fast Low Moderate High
Pipeline High Low Slow Low Low Moderate
Internet High Low Moderate-fast Mod.-increasing Low High
