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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. • • • solves : density of distribution nest length of distribution channels position and election of distribution participants and co-ordination of their activities • logistic Intensive strategy • • • • • • • • 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 • • • • • • 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 • • • • • • • • 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 : • • • • 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 • • • - 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).