International Marketing Channels 8 International Marketing Channels 8.01 International Channel Design

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

Warm-up video http://www.youtube.com/watch?v=Tb8bF2hCyLw A quick overview of channel management Chapter 8

MARKETING CHANNELS channel of distribution logistics 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 Chapter 8

Channel Length marketing intermediary an independent business that assists the flow of goods and services from producer to customers Chapter 8

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 Chapter 8

Channel Length (continued) Chapter 8

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 Chapter 8

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 Chapter 8

Channel Length (continued) Channels of distribution have become a key to international competitiveness because they can: facilitate just-in-time (JIT) inventory lower costs speed up distribution support expansion into new markets Chapter 8

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 Chapter 8

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 Chapter 8

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 Chapter 8

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/operations-worldwide 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 Chapter 8

>> C H E C K P O I N T Name four ways distribution channels aid in developing competitive advantages. Chapter 8

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 Chapter 8

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 Chapter 8

Finding International Partners There are a number of ways for international marketers to find partners. government sources from commerce departments trade show contacts Internet Chapter 8

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 Chapter 8

>> C H E C K P O I N T Name four ways that businesses can find international partners. Chapter 8