Download THE FOUR P`S and TWO C`S OF INTERNATIONAL MARKETING:

The Final P: Place
PLACE (DISTRIBUTION)
International distribution is complex and requires a distribution plan. In many
cases an intermediary is required to help with distribution.
Place represents the location where a product can be purchased. Factors for
selecting a country may range from: A similar language, Close proximity, Free
trade agreements, Filling a demand for a new product in a foreign country.
Place also includes distribution. How are you going to get your product to your
consumer. Two types of MARTKETING STRATEGIES are available to
companies.
1. CENTRALIZED STRATEGY:
This strategy consists of all of the company’s manufacturing and marketing are
performed in one location- usually the home country.
Main Disadvantage: if the company becomes too large manufacturing and
shipping all over the world can become complicated and impossible.
2. DECENTRALIZED STRATEGY:
This is when the company sets up manufacturing plants in other nations or hires
a sale force in the other nations or licenses its brand to a local manufacturer in a
foreign market.
Examples Centralized and Decentralized Strategies include:
a. E-commerce: the easiest way to enter foreign markets. Also called EDistribution, this strategy is all about selling to consumers on line while
not having to open up foreign operations or stores. Different types of
transactions are defined as B2C (Business to Consumer), B2G (Business
to Government), B2B (Business to Business).
The level of success of an E-Commerce Strategy depends on :
i.
Quality of the website.
ii.
Payment Processing Options- Pay Pal, security, variety of credit
cards accepted.
iii.
Variety of Goods Offered.
iv.
Shipping Options- reduced or free shipping.
b. Sales Agents: this is a combo of both decentralized and centralized
strategies. Companies contract sales forces in foreign countries to market
their product. This foreign Sales Agent is then responsible for all contacts
within that foreign country.
c. Trade Shows: like home shows, companies used these as a place to gain
exposure to markets, importers and local sales agencies.
d. Branch Plants: are plants built and staffed in the target markets. This is
the most expensive market entry strategy but there are 3 major
advantages to this strategy;
i.
Shipping Costs are lower.
ii.
Import regulations and tariffs are no longer an issue.
iii.
Product modifications are easier.
e. Licensing Agreements: this is a contract given to someone giving them
the right to use a patent or trademark. The manufacturer receives a
ROYALTY (% of the revenue from the sale of the products). There are
3 main types of licensing agreements:
i.
Manufacturing Agreements- Brand Identification
ii.
Distribution Agreements- Exclusive Distribution Agreements
mean you are the only person allowed to sell that product in a
particular country.
iii.
Franchising Agreements- turns the ownership of accompany
over to a local franchisee (someone who buys a franchise.
f. Acquisitions: The most effective way to deal with competition is to buy
the company that competes with it and either close it down or use the
purchased company’s resources and marketing connections to expand its
market.