International Marketing Management, VTU


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International Marketing Management, VTU

  1. 1. Entry mode & Global DistributionPROF. RAGHAVENDRAN VENUGOPAL
  2. 2. Entry mode Exporting Joint venture Acquisition Assembly operations Turnkey operations Wholly owned subsidiary Licensing Strategic alliances Franchising Management contracts Free Trade Zones Contract Manufacture
  3. 3. Strategic Alliance Types of SA:  Technology based alliances  Production based alliances  Distribution based alliances  R&D alliances
  4. 4. OEM Original Equipment manufacturing a company selling an unbranded product or component to another company in global market.Problems solved through OEM:  Branding  Budget constraint  Eliminate bottle necks & improve efficiencyKey Aspects of working with OEM:  Quality  Manufacturers with best practices  Corrective action  Want ISO vendors  Competitive prices
  5. 5. Significance of OEM Low prototype costs Short lead time Min stock levels No need for costly post – cast machining Highly damped structure High dynamic Totally machine structure High dimensional accuracy Excellent supplier – customer relationship
  6. 6. Entry modes & Marketing ControlControl Direct Investment Co-operative Strategies Assembly JV Own Subsidiary SA Acquisition Direct Exporting Agents Distributors Management Contracts Franchising Direct marketing Indirect Export Piggybacking Ex management companies Risk Domestic Purchasing
  7. 7. Optimal entry strategyCompany Product/Market situationstrategicposture Emerging High-growth Mature ServicesIncremental IDExp IDExp Dexp Licen/AlliProtected JV IDExp Licen/Alli LicensingControl WOS Acqi/Alli WOS Fran/Alli/Exp
  8. 8. Global Distribution 3 essential functions have to be performed  Transfer of title  The physical movement of the products  Storage GD is complex, multimodal world of logistics, shipping, insurance, warehousing & documentation.
  9. 9.  Global Firms have 2 options when selecting distributing system  Indigenous channels of distribution  Develop a global distribution system Channel members in international distribution  Types of intermediaries  Indirect channel  Direct channel
  10. 10. International channels of distribution For Manufacturer •Export broker •Export agentDomestic •Cooperative exporter Agent •Foreign Distributor •Foreign Retailer For/Buyer •Purchasing or Buying office •State controlledC •Country controlled Buying trading companyh Agent •End usera •Resident Buyernn Indirecte •Export Merchantl •Export drop Shipper •Export distributor •Trading company Domestic Merchant Direct
  11. 11. Wholesaling  Vertical integration Wholesaler Merchant Agents & WH Brokers Manufacturer ’s WH Full Service Limited service WH Merchant WHGeneral Cash N Carry WHMerchandise Drop ShippersLimited line WH Mail Order WHRack Jobbers Truck WHSpecialty Line WHCooperatives
  12. 12. Retailing Self study, as discussed in depth in SADMAN
  13. 13. Global Logistics Operational factors  Warehouse management  Packaging  Inventory management  Material handling  Information systems  Transportation  Insurance  Shipment packing
  14. 14. Transportation Roadways Railways Waterways Inland water Rope ways Airways Pipelines Package service Intermodal transport
  15. 15. Parallel distribution Few mechanism to avoid parallel distribution:  Create different packaging for the different countries.  Maintain the price differentials & minimize the gaps in such a way as to make it less appealing for the parallel distributor.  Limit the quantity that distributors in lower priced markets can receive per order. Gray trade: it is known as parallel distribution.  3 main factors are  Price discrepancies between 2 national markets  Limited availability of certain models or version in one market.  Less logistics problem due to increased availability of global modes of transportation
  16. 16. Effects of gray trade Erosion of Brand equity Disturbed relationships with authorized channel members Legal liabilities Complicating international marketing strategiesMeasures against gray trade ( Reactive) Strategic confrontation, Collaboration participation, Acquisition price cutting supply interference Promotion
  17. 17. Measures against gray trade ( Proactive)Product DifferentiationStrategic pricingDealer developmentMkISLong term Image reinforcementEstablishing Legal ProceduresLobbying
  18. 18. Multiple Distribution Channel Internet Sales Catalogue Sales Sales Representative Multi-Level Marketing Infomercials Cross Consignment
  19. 19. Effective Global Distribution System Find out customers want, services, delivery, choice, technical help & so on. Find out about costs & feasibility for the company, Support systems & suppliers. Determine Management Objectives & Ideal global Distribution system. Compare given Options Evaluate assumptions by bringing present system. Develop plan to rectify the difference. Implement the plan.
  20. 20. International Retailing Home reading from SADMAN
  21. 21. Issue in International Retailing Legislation & Regulation Taxation & Cross Border Shopping Variation in Retail Practices– Consumer Perspectives Variation in Retail Practices– Salespeople & Management
  22. 22. Thank you