This document discusses global marketing management and international distribution. It defines international distribution as designing and managing material flows across borders to achieve corporate objectives at minimum cost. Key topics covered include: - The complexity of international physical distribution due to factors like distance, exchange rate fluctuations, and regulations. - Modes of transport like ocean shipping, air freight, and how value and perishability determine optimal modes. - Issues in global distribution like hedging inflation/currency risks and tax differentials between countries. - The role of e-commerce and how online retailers operate internationally. - Sourcing strategies and managing international distribution channels.

1. FB602: Global Marketing
Management
24/3/2014Russell Preston

2. Recap
• World Communications

3. Distribution
Learning Objectives:
• Evaluate channels of distribution/logistics
• To differentiate complexities of international
distribution
• To contrast service & product distribution

4. Background
4
• Efficiently & Effectively
• Decreases in transportation costs
• Reliability increased
• Opening up of markets
• Increases chance of success

5. Definition
• “defined as the design and management
of a system that directs and controls the
flows of materials into, through and out of
the firm across national boundaries to
achieve its corporate objectives at a
minimum total cost”
source: Kotabe & Helsen, (2011) Global Marketing
Management, 5th edn, p500

6. Global Logistics
• Materials management
• Physical distribution
• Sourcing Strategy

7. EU
• Single European Market 1992

8. Complexity of Physical
distribution
• Distance –higher costs, eg insurance and
transport, pilferage, warehousing
• Exch Rate fluctuation
• Foreign Intermediaries – in Asia its who
you know to get things moving
• Regulation – US domestic shipping regs
• Security – 9/11

9. Modes of Transport
• Value-to-volume ratio determined by how much value
is added to the materials used in the product
• Perishability – quality degradation over time
• Cost of transportation – see above dependencies

10. How do we get there Sir?
• Ocean shipping – Liners or Bulk Shipping
(container cargoes)
• Air freight – expensive, prob high value eg
semi conductors

11. Global distribution
..And on time, maximising cargo
space

12. Key issues
How do you hedge against inflation/currency
fluctuations?
Tax differentials transfer from country A to B to C
so an export from country B? assembled in country
C gets tax breaks?
Logistical Integration/Rationalisation
E-Commerce – so what happens once you are on
the web?

13. E-commerce
• Amazon.com
• 5 million books
• Which one? Who do
you buy from?
• Dymocks Australia
• 100,000 books
• Who is truly global?
Why?

14. Sourcing Strategy

15. International distribution
channel
• Lo
Local or foreign agent
international wholesaler
E-Commerce?

16. Channel Management
An indirect distribution channel threatens control
Some guidelines:
• Seek intermediaries capable of developing
markets, not just those with good contacts
• Regard intermediaries as long term partners – not
as a means to get entry
• Actively search and select intermediaries
• Support your intermediaries with mktg/know how
• Attempt to control as much as you can over
marketing

17. Retailing
• Growth
• Own label lines
• e-tailing
• Wal-Mart are P&Gs largest customer,
buying more than the whole of Japan

19. SWOT
• Choose:
• Nike or
• Adidas or
• Puma
• Complete a SWOT for one of the above in
Germany (Nike), Adidas (China), Puma (Brazil)

20. Retailing differences across
the world
• Japan, historically tight regulation, department stores
led, no cars for shopping, smaller stores/head of
population, no parking
• Germany –no Sunday opening, close at 6pm, open 1
Saturday in a month
• UK Sunday opening is the only limitation
• Asia, fresh produce, markets very strong. Low incomes

21. Question
• Carrefour, being the 2nd largest retailer in
the world, what are the implications of its
pull-out from Japan for other global
retailers such as Wal-Mart which is
struggling to survive ?

22. Resources
• Ch15 core text, Kotabe & Helsen Global marketing
Management