Download distribution in international marketing

DISTRIBUTION IN
INTERNATIONAL MARKETING
Ing. Jiří Šnajdar
Mgr.Evžen Staněk
2013
Distribution and distribution politics
Distribution
• complex of methods and activities, by means of are goods
given at disposal to consumer or user in designated place
• less flexible toll of marketing mix
• building of distribution ways is very demanding and long-term
matter
Distribution politics – function
• approach offer to demand
• to secure fluent movement of goods from domestic product to
consumer on foreign market
Distribution strategy
1. respects other strategies of marketing mix (price, products,
communication)
2.
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solves :
density of distribution nest
length of distribution channels
position and election of distribution participants and
co-ordination of their activities
• logistic
Intensive strategy
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many purchase places
mass distribution
standard fast returning goods
purchase in routine way without comparison with competitive
products
raised expenses – more connecting links + higher expenses on
communication
risk of product commonplace
weaken of mark image
risk of loss of control over the distribution of products
Selective strategy
• limited number of purchase places, which fulfil
quantitative and qualitative requirements of producer
• product with strong image
• goods for long-term use, assess of all purchase
alternatives
• distribution control by producer
• creating of strong relationship between producer and
selected connecting links
• possibility to influence way of distribution and price level
by producer
Exclusive distribution
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very limited number of purchase places, one distributor
exclusive product
support of image of product exceptionality
higher prices
exclusive distribution in scope of franchisee
producer controls better level of provided services,
propagation and payment conditions
Determining factors
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customer (purchase and consumable behaviour)
culture and economic ambience
competition
targets of firm
financial sources of firm
product character
expenses on distribution
control
Direct distribution way
• direct contact producer (supplier) and consumer (user)
positives :
- direct contact, communication, immediate feedback,
control over price politics and level of costs
• negatives :
- difficulties connected with products presentation, difficulty
and non-effectiveness in case of goods of wholesale
character, necessary to secure professionally fluent
flow of goods – needs of contacts with some
subjects.
Indirect distribution way
• length is influenced by number of connecting links
positives :
- delegation of activities on connecting links, use of their
contacts and knowledge – more effective way of goods
sale, lower consumption of investment
• negatives :
- loss of control over the goods, price and sales channels,
insufficient supply of information about customers,
intermediaries need motivation to performance,
higher distribution costs and the risk of default of
payments and bad debts
Types of distribution connecting links :
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negotiators
intermediaries
business representatives
auxiliary connecting links (transport firms, banks) –
provide
services and facilitate exchange of goods
Organisation of distribution ways
- distribution ways and connecting links fulfil various
function and realise number of activities –
individual participants create between each other
connection and mutual dependency
- develop new organisational systems of distribution,
where is the activity of individual subjects regulated
and co- ordinated
• vertical
• horizontal marketing system
• more dimensional
- problems of distribution ways :
dissimilarity of participants ´ interests,
inconsistency of targets, unclear rights and duties
of participants, overly dependence of connecting
links on producer.
Vertical marketing system
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penetration of manufacturing and commercial activities
closed = one subject owns subjects of others
contractual = co-operation in form of franchise
administrative = dominant position against participants
mutual communication activity, co-operation by storing
strategic purchase alliance (between commercial firms,
mutual approach to suppliers, co-ordination of
marketing activities, co-operation by entering on
further foreign markets.
Horizontal marketing system
- connection (temporary, permanent) of sources or
programmes of 2 or more companies in
interest of use of new opportunity on market
- for example co-operation of supermarkets network
with banks and offer of financial services
directly on purchase places
- for example co-operation of firms of the same
branch – increasing of attraction of purchase
place, increasing of sale, decreasing of
expenses.
More dimensional marketing system
- uses 2 and more distribution ways to achieve
customers´ segments
positives :
• better covering of market, lower expenses, more
comfortable sale
negatives :
• bigger independence of new distribution ways can
lead to conflict situations, lost of control
Development trends in international distribution
• caused by process of concentration (on
organisation and operational level) and
internationalisation
• global commercial firms, strategic business
alliances, in retail network appear new form of sale
and their combination, sale without shops (TV,
internet, phone)
• increasing competition, polarisation of
salespersons (large assortment x specialised sale)
• decreasing of extent of distribution in wholesale
network sale under mark of distributor and under
his own (private label).