1. International Marketing 国际市场营销学 School of International Trade, Shandong Economic University 山东经济学院 · 国际贸易学院

2. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University International Distribution Channels Chapter 11

3. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Chapter Outline 1. Nature of Distribution Channels 2. Distribution Channels Strategy 3. Distribution Channel Structures 4. Locating Selecting and Motivating Channel Members 5. Internet and Distribution Channels

4. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 1. Nature of Distribution Channels 1.1 Distribution channel – Channels of Distribution is known as "Place" in the "4 P's" model of Marketing. Distribution Channels provide the utility of place, of having products where the customer wants when the customer wants them. – Channels of Distribution is defined as an organized network (system) of agencies and institutions which, in combination, perform all the functions required to link producers with end customers to accomplish the marketing task. – Distribution has two dimensions:  Logistics- Physical movement of goods  Strategy- Who participates and what they do

5. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 1. Nature of Distribution Channels 1.2 Distribution channel functions 1. Information 2. Promotion 3. Contact 4. Matching (including such things as manufacturing, grading, assembling, and packaging) 5. Negotiation 6. Physical Distribution (transporting and storing) 7. Financing 8. Risk Taking

6. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 1. Nature of Distribution Channels 1.3 Intermediaries (Middlemen) – Intermediary within a channel of distribution used to transfer products from the manufacturer to the end user. – Those who actually take title to the products and resell them are merchant middlemen. Those who act as brokers but do not take title are agent middlemen. – Merchant middlemen include wholesalers and retailers. Agent middlemen include manufacturer's representatives, brokers, and sales agents.

7. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Nature of Distribution Channels

8. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Home-Country Middlemen 1. Manufacturers’ Retail Stores 2. Global Retailers 3. Export Management Companies 4. Trading Companies 5. U.S. Export Trading Companies 6. Complementary Marketers 7. Manufacturer’s Export Agent Home-country middlemen, or domestic middlemen, provide marketing services from a domestic base and find foreign markets for products for local manufacturers Frequently used types of domestic intermediaries include: 8.Home-Country Brokers 9.Buying Offices 10.Selling Groups 11.Webb-Pomerene Export Associations 12.Foreign Sales Corporation 13.Export Merchants 14.Export Jobbers

9. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Foreign-Country Middlemen 1. Manufacturer’s Representatives 2. Distributors 3. Foreign-Country Brokers 4. Managing Agents and Compradors 5. Dealers 6. Import Jobbers, Wholesalers, and Retailers Some of the more important foreign-country middlemen, who find markets for foreign manufacturers include:

10. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Think and Answer You’ve probably heard someone say, “The reason products cost so much is all the intermediaries.” – --Do intermediaries increase the cost of products? – --Would consumers be better off or worse off without intermediaries?

11. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 2.Channel-of-Distribution Strategies Types of intermediaries (Length of Distribution Channel) Distribution Intensity (Width of Distribution Channel )

12. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 2.Channel-of-Distribution Strategies Types of intermediaries (Length of Distribution Channel) – Direct Distribution (short)  A channel whereby goods and services are sold directly from producer to final user without involvement of other independent middlemen.  Dell, Direct-distribution model – Eliminates wholesalers and retailers. – Complete control over inventory levels and distribution costs. – Direct monitor its customers’ needs.  “You can eliminate the middleman, but not the function.”

13. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 2.Channel-of-Distribution Strategies Types of intermediaries (Length of Distribution Channel) – Indirect Distribution (long)  A channel whereby goods and services are sold indirectly from producer through independent middlemen to final users.

14. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Think and Answer Dell Computer has used one simple supply chain system—direct sales over the Internet or by phone to both business and consumer users. --If you were a marketing executive at Dell, what new supply chain options would you suggest?

15. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 2.Channel-of-Distribution Strategies Distribution Intensity (Width of Distribution Channel ) – Intensive Distribution ( 广泛分销 )  Stocking the product in as many outlets as possible  Used for Convenience Goods – Selective Distribution ( 选择性分销 )  Using more than one but fewer than all of the intermediaries who are willing to carry the company's products  Used for Shopping Goods – Exclusive Distribution ( 独家分销 )  Giving a limited number of dealers the exclusive right to distribute the company's products in their territories  Used for Specialty Goods

16. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 3.Channel-of-Distribution Structures All consumer and industrial products eventually go through a distribution process. – Physical handling and distribution of goods – Passage of ownership – Buying and selling negotiations between producers and middlemen – Buying and selling negotiations between middlemen and customers Each country market has a distribution structure through which goods pass from producer to user.

17. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Japan VS. US Channel structure (P251)

18. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University German, Japan, US Retail structure (P251)

19. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Think and Answer Learning the above materials, what can you tell the distinguishing differencies that Japan’s Distribution Channel structure has between US’s?

20. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 1. Cost 2. Capital Requirements 3. Control 4. Coverage 5. Character 6. Continuity Channel strategy itself is considered to have the following six specific strategic goals: Channel strategy itself is considered to have the following six specific strategic goals: 4.Choice of Channels- 6Cs

21. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Locating Middlemen (a) reputation (b) creditworthiness (c) markets served (d) products carried (e) number of stores (f) store size In selecting middlemen, the following criteria should be adopted.

22. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Motivating Middlemen Motivational techniques may be grouped into five categories: (1) financial rewards (2) psychological rewards (3) communications (4) company support, and (5) corporate rapport There is a clear correlation between the middleman’s motivation and sales volume There is a clear correlation between the middleman’s motivation and sales volume

23. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University 5.The Internet When using the internet for distribution purposes, the following factors should be considered: 1. Culture 2. Adaptation (especially of language) 3. Local contact information 4. Payment form 5. Delivery 6. Promotion E-commerce is used to market business-to-business services, consumer services, and consumer and industrial products via the World Wide Web The Internet is an important distribution method for multinational companies

24. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Chapter Summary From the foregoing discussion, it is evident that the international marketer has a broad range of alternatives for developing an economical, efficient, high-volume international distribution system. To the uninitiated, however, the variety may be overwhelming. Careful analysis of the functions performed suggests more similarity than difference between international and domestic distribution systems; in both cases the three primary alternatives are using agent middlemen, merchant middlemen, or government-affiliated middlemen. In many instances, all three types of middlemen are employed on the international scene, and channel structure may vary from nation to nation or from continent to continent.

25. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Chapter Summary The neophyte company in international marketing can gain strength from the knowledge that information and advice are available relative to the structuring of international distribution systems and that many well- developed and capable middleman firms exist for the international distribution of goods. Although international middlemen are more numerous, more reliable, and more sophisticated within the past decade, traditional channels are being challenged by the Internet, which is rapidly becoming an important alternative channel to many market segments. Such growth and development offer an ever-wider range of possibilities for entering foreign markets.

26. 山东经济学院 · 国际贸易学院 School of International Trade, Shandong Economic University Key Terms distribution process distribution structure Large-Scale Retail Store Location Act agent middlemen merchant middlemen compensation deal counterpurchase product buy-back agreement transfer pricing advanced pricing agreement administered pricing cartel