Global Marketing Channels and Physical

Distribution

Chapter 12

Channel Objectives

Place utility Time utility Form utility Information utility

These utilities can be a basic source of competitive advantage and comprise an important element of the firm’s overall value proposition.

Most Effective Channel Arrangement

Target Market

Location Information requirements Preferences for service Price Sensitivity

Distribution Channels

Business-to-Consumer marketing Direct transaction

Business-to-Business marketing Indirect Transaction

Distributor A wholesale intermediary that typically carries product lines

or brands on a selective basis Agent

An intermediary who negotiates transaction between two or more parties but does not take title to the goods being purchased or sold

Marketing Channel Alternatives: Consumer Products

Marketing Channel Alternatives: Industrial Products

Establishing Channels and Working with Channel Intermediaries

Direct Involvement Can entail considerable expense Requires a lot more management involvement Not beneficial for the company

Indirect Involvement Consist of involvement with distributors

Long-term commitment Cherry Picking

The practice of accepting orders only from manufacturers with established demand for products and brands

Global Retailing

Crossing national boundaries Not new

International trading Retail store operation

Retail stores Amount of square feet/floor space Level of service offered Width/depth of product offerings

Retail Store Categories

Department Stores Specialty Retailers Supermarkets Convenience Stores Discount Stores Hypermarkets Category Killers Outlet Stores

Cross-Boarder Retailing

Great deal of caution What are the advantages? Innovation

JC Penney Global Retailing Categories

Global Retailing Market Entry Strategy Framework

Organic Growth Franchising Acquisition Joint Ventures