G LOBAL C HALLENGES A ND O PPORTUNITIES Teacher – Shahed Rahman

B ASICS !! Virtually its impossible for a single company to satisfy the all the consumers. Designing a global channel strategy that takes into full account the richness and diversity of the international market is difficult Partnership don’t always workout

R EASON FOR I NTERNATIONAL E XCHANGE R ELATIONSHIPS Facilitating Market Entry Boosting Market Share Introducing New Products through Existing Channels Improving Service Performance Responding and Adapting to Shifting Market Conditions

R EASON FOR I NTERNATIONAL E XCHANGE R ELATIONSHIPS Facilitating Market Entry Develop international exchange relationships to accelerate or ease entry into new markets Boosting Market Share Sometimes own the company to get a market share Introducing New Products through Existing Channels Existing distribution channel will help to market the new products

R EASON FOR I NTERNATIONAL E XCHANGE R ELATIONSHIPS Improving Service Performance May be the market is not good but a well known company can enter and increase the service performance of the industry Responding and Adapting to Shifting Market Conditions Channel members can also seek new technologies, more stable currencies or greater sales volume through their entry into international exchange relationships Some companies enter international relationship to block the entry of foreign competitors into their own market

T YPOLOGY OF G LOBAL E XCHANGE R ELATIONSHIPS Market Orientation Channel Domain Relationship Orientation Multinational MER InternationalPrespecified national boundaries Firm to firm partnership: based on market segments Transational TER RegionFlexible transcends national boundaries Nodal Partnership: based on regionalization Global GER GlobalUnlimited transcends regional boundaries Channel network: based on a boundary less market

D IRECT M ARKETING C HANNELS A direct Marketing Channel is one in which the exchange partner takes a membership position in the home country or region Becomes a player in the domestic economy. Local Facility Develop a company based management team operating in the host country Involvement may range from having a local manufacturing facility to simply having a domestic salesforce. Market Subsidiary In this mode channel members established a subsidiary company in the host country or region. Tries to develop a strong local presence Subsidiary’s management is typically based in the host country Foreign Sales Agent Company designates that for the most part, function as a sales and support staff for goods produced in home-country locations Do not take the title of the goods

I NDIRECT M ARKETING C HANNELS When indirect entry is used, the domestic channel member manages the distribution of products or services in a foreign target country through foreign designates. Foreign designates are also responsible for ensuring customer satisfaction. Export Management Companies Piggybacks Foreign Distributors Trading Companies

E XPORT M ANAGEMENT C OMPANIES Offer the services of a manufacturer's representative who specialize in cultivating international exchange relationships in particular locales Generally based in the country or region Has expertise and experience critical to the market of interest.

P IGGYBACKS Involves a joint effort at international market entry generally shared among several channel members One channel member may provide logistics and another inventory control, another provide customer service. Its challenging to coordinate in foreign market.

F OREIGN D ISTRIBUTORS Most common way Distributor operating at a wholesale or retail level is contracted to develop and cultivate exchange relationships within the entry market. Distributors stock inventories and provide local marketing activities.

T RADING C OMPANIES Trading companies are large, international channel members that have a worldwide presence Expanse ( Area) of their market coverage Trading Companies engage in global distribution

I NDIRECT AND D IRECT M ARKET E NTRY S TRATEGIES Activities performed in Host Country Company’s involvement in Activities Indirect/ Low Direct/High Marketing Only Indirect exporting Direct exporting Marketing and Production Contractual methods Foreign direct investment

I NTERFACE BETWEEN I NTERNATIONAL M ARKETING C HANNELS AND THE E NVIRONMENT Economic Factors Political /Legal Factors Socio cultural factors Technological Factors Physical /Geographical factors

S ELECTING I NTERNATIONAL E XCHANGE P ARTNERS FIVE C’s Costs Coordination Coverage Control Cooperation

C OSTS Cost associated with the selection of particular exchange program Initial Cost Initial marketing channel setup cost Identifying and initiating communications and negotiation with prospective exchange partners Preservation Cost Cost to maintain a relationship. Eg. Promotional material or travel expense – accounting expenses Logistic Cost Reflect the expense related to transporting goods and managing invenntories. Who will be responsible for stocking inventories Who recieves return goods

C OORDINATION How each of the necessary marketing functions will be allocated among the channel participants? Which partner will perform what channel functions?

C OVERAGE Will a single exchange partner provide sufficient coverage for the target market ? Or Several exchange partner required?

C ONTROL Who will control key channel resources?

C OOPERATION The degree of cooperation- Try identify by doing more research.