Global Marketing Channels Flashcards
What are channels of distribution for? What are the two major categories of channel members?
Provide essential linkage between manufactured products and the consumers.
- Home market channel members
- Foregin market channel members
What is the global marketing dilemma for distribution?
Standardized distribution vs. adapted distribution
Who are the four home market channel members?
- Export management companies: handle export operations under agreement
- Export agents: assist manufacturers in exporting goods
- Direct exporting: in house personnel or export department
- Internet: foreign buyer can access info properly.
Who are the four foriegn market channel members?
- Import intermediaries: purchase good in their own name, use their own marketing+close contact with surved markets
- Local wholesalers (dealers/distributors): take title to product, may receive exlcusive distribution right in a geographic area
- Local agents: no title, work on commission
- Retailers: final member of the channel, size and accessibility vary by country
What is the difference between a wholesaler and a retailer?
Wholesaler: person or comany that sells goods to other businesses
Retailer: purchases goods in large quantities from manufacturer/wholesaler and then sells smaller quantities to the consumer for profit
Do B2B channels have longer or shorter channels than B2C consumers?
They often have shorter channels! Because export agents, import intermediaries, or manufacturers contact business customers directly
What is distribution density? What are the three levels?
It’s the amount of exposure or coverage desired for a product, particularly the number of sales outlets necessary to cover entire market.
- Intensive: many outlets per marketing area (consumer goods, consumers not likely to exert much shopping effort)
- Selective: fewer outlets per marketing area (appliances/clothing, consumer may visit a couple stores)
- Exclusive: a minimal number of outlets per marketing area (specialty goods/products)
What is channel length? What factors influence it?
The # of intermediaries involved in bring a given product from the firm to the consumer
3 factors: product’s distribution density, average order quantity, availability of channel members
What is channel alignment and leadership?
The structure of the chosen channel members to achieve a unified strategy
What is a channel captain?
Dominant member of the channel who frequently dictates terms of:
pricing, delivery and product design
What are some of the factors that influence the selection of channel members?
Costs: Initial costs (all costs of locating and setting up a channel), Maintain costs (costs of the company’s salespeople, sales managers, travel etc.) logistics costs (costs related to transportation, storage etc.)
Distribution logistics - they physically flow of products as they move through the channel. Need to decide: traffic/transport, inventory, order processing, materials handling and warehousing.
Product and product line Perishables = shorter channel necessary, technical product= direct sales/highly technical partner, Broader product line=a broader product line is more desirable for channel members
How do distribution systems change by market development?
In developed countries: shorter+efficient distribution systems. but locked up channels are common!
In developing countries: long, fractured inefficient distribution systems. marketer as channel education. (prepare manuals, middlemen etc.)
What information do you need to acquire from distributors before making a selection?
Current product lines, annual volume, # of people, geographic territory, credit and bank references, physical facilities, relationship with local government, knowledge of english or other relevant languages.
How can firms control channel participatns:
Distribution rights made for a limited time “trial period”: subject to social norms and local laws.
Intermediaries can be terminated.
What is a “locked up channel”?
When newcomer cannot easily convince any channel member to participate.
- distributors have exclusive agreements with competitors or unwilling to take risk with unknown product
