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ChapterChapterChapterChapter

International Marketing Channels

8.01 International Channel Design8.01 International Channel Design

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Chapter 8Slide 2

Winning Strategies - read

7-Eleven stores are open 24 hours a day.

7-Eleven stores have improved their efficiency through the use of technology.

There are almost 28,000 7-Elevens around the world.

Open All Night Everywhere

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Warm-up video

http://www.youtube.com/watch?v=Tb8bF2hCyLw

A quick overview of channel management

Chapter 8Slide 3

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Chapter 8Slide 4

MARKETING CHANNELS channel of distribution

the path used to move products from their source to the customer

logistics activities that create an orderly and timely

acquisition and transportation of products through the channel of distribution

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Chapter 8Slide 5

Channel Length

marketing intermediary an independent business that assists the

flow of goods and services from producer to customers

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Types of marketing intermediaries Agent/broker

Place buyers and sellers together Facilitate transactions Do not take ownership of product

Wholesaler Re-distributes to retailers Take ownership of products

Retailer Redistributes to consumers Take ownership of products

Chapter 8Slide 6

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Chapter 8Slide 7

Channel Length (continued)

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Chapter 8Slide 8

Channel Length (continued)

short channel of distribution Few intermediaries

direct channel From producer directly to consumer

long channel of distribution Many intermediaries

indirect channel of distribution Used primarily for consumer goods

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Role of Intermediaries

Breaking bulk shipment into smaller quantities

Provide information to other channel members

Storage of products Transportation of products Provide financing Promote products

Chapter 8Slide 9

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Chapter 8Slide 10

Channel Length (continued)

Channels of distribution have become a key to international competitiveness because they can: facilitate just-in-time (JIT) inventory lower costs speed up distribution support expansion into new markets

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Just-in-time inventory

Products arrive just as they are needed Utilize computerized inventory and

point-of-sale systems to monitor inventory levels and place orders

http://www.youtube.com/watch?v=AqK8VcLOxH8 http://www.youtube.com/watch?v=AAcX0SRjOCw Two videos on just in time

Chapter 8Slide 11

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Chapter 8Slide 12

International Channel Design

When entering new markets, international marketers can either: establish a new channel of distribution

High risk strategy Need to develop new relationships with

suppliers

work within an existing channel of distribution

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Chapter 8Slide 13

Total Cost Concept

total cost concept all costs must be taken into consideration

when designing a channel of distribution Added shipping costs Transportation time must also be considered

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IBH – 8.01 Activity Students pair with someone other than their IBP partner Research an automobile manufacturer who has opened

up a manufacturing plant in a foreign country in order to lower total cost of distribution to that country

http://www.kia.com/#/about/ http://corporate.honda.com/america/facilities.aspx https://www.bmwusfactory.com/ http://corporate.ford.com/our-company/operations-

worldwide http://media.gm.com/autoshows/Chevrolet_Centennial/2010/public/intl/en/chevrolet/

news.detail.html/content/Pages/news/intl/en/2011/centennial/03_01_the_first_100_years.html

Chapter 8

Slide 14

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Chapter 8Slide 15

>> C H E C K P O I N T

Name four ways distribution channels aid in developing competitive advantages.

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Chapter 8Slide 16

CHANNEL RELATIONSHIPS

All distribution systems seek to achieve the lowest cost possible. Can result in disintermediation

the removal of channel members to save costs http://www.youtube.com/watch?v=LACYuGoP4IE Examples of results due to disintermediation

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Chapter 8Slide 17

Channel Power

Some channel members have more power than others

channel captain – example UD takes the leadership role in organizing a

distribution system gains power through their ability to reward

or punish channel members and through their knowledge of their product-market

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Chapter 8Slide 18

Finding International Partners

There are a number of ways for international marketers to find partners. government sources from commerce

departments trade show contacts Internet

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Chapter 8Slide 19

Finding International Partners (continued)

export management companies (EMCs) specialize in helping businesses distribute

products

agent brings together buyers and sellers, but

does not take ownership of product http://www.youtube.com/watch?v=qDbnx6nLrQo

International Business© Thomson/South-Western

Chapter 8Slide 20

>> C H E C K P O I N T

Name four ways that businesses can find international partners.