Chapter Fifteen Global Distribution MKT568 Global Marketing Management Dr. Fred Miller 3-1

Sample Essay Question DeutscheDrives is German producer of computer storage devices and media. The firm wishes to build upon its success in European markets by expanding to Asia, Africa, North and South America. 1.Identify and describe the three general international marketing strategies. (6 points) 2.For each element of the marketing mix (product, price, promotion and distribution), identify and describe one benefit of a global strategy and one constraint to implementing such a strategy. (12 points) 3.Which of the three general marketing strategies do you recommend to DeutscheDrives? Explain why. (2 points)

Benefits of Standardized Distribution Cost reduction shipping and merchandising costs channel management costs Control of marketing strategy Consistency of positioning Logistic efficiency

Constraints on Standardization Wholesaling and Retailing StructuresRetailing wholesaling; types, business practices, integration retailing practices; integration, lifestyles, global retailing, retailing channel captains, PoP IT Adjusting Channel Relationships changing distributors, dual distribution shortening channels, integration creating new channels

Data Archaeology: Profiling Web Customers

Size and Number of Wholesalers in Selected Countries 14-2 Exhibit 14.1 Source: Retailing in the European Single Market, These figures are adapted from Table EUR1a: “Importance of Commerce in the EC—absolute values ( )” # of enterprisesEmployeesRevenueEmp/EntRev/Ent (thousands) (bill ECU)(mill ECU) Belgium ,771 Denmark ,676 Greece28115—4.1 France1321, ,356 Ireland ,429 Italy1931,084—5.6 Luxembourg ,632 Netherlands ,878 Portugal31200—6.4 United Kingdom ,172 United States4704,5781, ,684 Japan4364,3322, ,075

Size and Number of Retail Outlets in Selected Countries 14-7 Exhibit 14.4 Source: Retailing in the European Single Market, These figures are adapted from Table EUR1a: “Importance of Commerce in the EC—absolute values ( )” # of enterprisesEmployeesRevenue/ Ret to Whol Ratio Emp/EntRev/Ent (thousands) (bill ECU)(mill ECU) Belgium /41% Denmark /40% Greece France4622,090260/83% Ireland /92% Italy9302, Luxembourg4183/60% Netherlands /33% Portugal United Kingdom3483,030280/90% United States1,50419,0851,350/107% Japan1,6206,851682/26%4.2421

Japanese Import Distribution Alternatives - Distribution Route of Italian Spaghetti 14-3 Processing and packing plant Import agent Producer Primary wholesaler Intermediary wholesaler Small wholesaler Retailer Conventional Route Restructured Route Retail price: 170yen/300g package Retail price: 128yen/300g package Depots Distribution Wholesalers Distribution centers Retailer Processing and packing plant Importing company A/C Producer Savings: 25% Source: Allied Import Company, as reproduced in Michael R. Czinkota, and Jon Woronoff, Unlocking Japan’s Markets. Chicago, IL: Probus, 1991, p Used with permission. Exhibit 14.2

14-4 International comparison of Wholesale Trade Practices Exhibit 14.3 Source: Distribution Economics Institute, Survey on International Comparison on the Distribution Industry, May 1990.

Global Logistics and Channels Global Distribution issues of transportation between countries technology and competition Modes of Transportation air express; business and consumer markets ocean carriers; containerization overland; rail, truck, roll-on-roll-off inventory management; distribution centers

Global Logistics and Channels Parallel Distribution definition and effects supply, dealer, demand interference and strategic attack Global Channels availability, tie-up, coordination and control

Seiko’s Authorized and Unauthorized Channels of Distribution 14-8 Source: Jack Kaikati, “Parallel Importation: A growing Conflict in International Channels of Distribution,” Symposium on Export-Import Interrelationships, Georgetown University, November 14-15, Distributors Retailers Importer EuropeHong KongJapanNorth America Solid arrows denote the flow of Seiko watches through authorized channels of distribution. Broken arrows denote the flow of Seiko watches through unauthorized channels of distribution. Exhibit 14.5

KFC in Japan Video This video has content relevant for several topics in the course. Describe the challenges KFC has confronted in TWO of the following areas. Has the firm responded to these challenges effectively? Explain. Japanese management styles and practices Corporate strategies for international markets multidomestic, global, global with localization Product and branding strategies Market entry strategies Promotion strategies Distribution and locational strategies

Chapter Fifteen Global Distribution MKT568 Global Marketing Management Dr. Fred Miller 3-1

Cola Wars Video In which countries, with what strategy and with what success has Mecca Cola chosen to challenge Coca Cola?Mecca Cola In which countries, with what strategy and with what success has Qibla Cola chosen to challenge Coca Cola?Qibla Cola How has Coca Cola responded to these challenges?Coca Cola

Bond’s Vodka Article The promotional technique discussed in this article is product placement. Describe this technique and explain its value, especially for an alcoholic beverage product. Why did Brown Forman spend as much as it did to insure that James Bond would drink Finlandia in his most recent movie? How does this effort mesh with the firm’s marketing strategy? In your opinion, how valuable is product placement for global marketing strategies? Explain.