International Distribution and Logistics Swatch’s channel design Today’s system of exchange Rationalising local channels Wholesaling Nike’s ‘Do it yourself’ Retailing Creating new channels Kodak’s own airfreight hub Global logistics

Global Channel Design Chosen intermediaries must meet criteria work closely with distributors build sustain brand avoid discounting ‘shops in shops’ approach e.g department stores

Today’s system of exchange Promotion Contact Negotiation Transporting and storing Users Financing Producers Packaging Money Goods

Rationalising Local Channels Changing distributors - where a poor job is being done e.g. Nike took on distributors Dual distribution - multiple channels may emerge e.g Goldstar in USA (OEM deal with Sears, later under own brand)

Wholesaling Vertical integration Efficiency Types of wholesaler power and competition 80/20 rule e.g. Malaysia a dozen European import houses handle half of the trade, whilst hundreds of smaller companies handle the remainder Efficiency trend towards integration by technology e.g. Wal-Mart Types of wholesaler fit all bills e.g. full-service wholesalers

Nike’s ‘Do it yourself’ 1970s independent distributors successful brand at home 1980s established own subsidiaries overseas Now controls most subsidiaries even bought some distributors

Retailing Middlemen who sell directly to the consumer Retailing and lifestyles many in developed world retailers are globalising Problems for marketer? Gillette blades through drugstores in USA, tobacco shops in Italy, department stores in Germany, street in Moscow, counters in Thailand, travelling vans in India

Creating New Channels Retailing is dynamic Innovative over recent years self-service discounting vending machines mail-order houses fast-food globally diffused Global retailing success for Carrefour in Brazil and Argentina Marks and Spencer had problems in Canada and pulled-out

Kodak’s own airfreight hub Minimise shipping errors and product handling loaded onto trucks at Rochester plant All paperwork is already completed flight approval is obtained before truck arrives at airport (JFK)

Global Logistics Focus on channels within a country ‘the transportation and storage activities necessary to transfer the physical product from manufacturing plants and and warehouses in different countries to the various local market countries’ Johansson (1999) Supply chain management e.g. Nissan trucks sold in France come from their Tennessee plant, Micras from Sunderland, Maximas from Japan via Amsterdam. Competition and technology

Air Express e.g. FedEX, DHL, UPS and Airborne Ocean carriers Global carrier alliances e.g. Sea-Land Service of Seattle and Maersk of Denmark have a global partnership. Overland transportation roll-on-roll-off (RORO) containers are moved from ships directly onto rail (USA) Warehousing and inventory management e.g. SKF bearings new distribution centre in Belgium reduced distribution points from 24 to 5