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Physical distr ibution in

international marketing

Presented by: Under guidance of:

Kalpesh kakadiya Mr. Ajay G. Pise

Reg. No:090606008 Lecturer

Pharmaceutical marketing Dept. of pharmacy managemen

MCOPS , Manipal MCOPS , Manipal

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CONTENT

1.Introduction

2. Marketing through distributor in foreign market

3. Marketing through firms own presence

4. Component of physical distribution

5.Documentation

6.Conclusion

7.Reference

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IntroductionDISTRIBUTION

Channels /Supply chain Physical distributionAgents / Logistics

Wholesalers

Retailers= intermediariesTargetTarget

MarketMarket

Product Place

PromotionPrice

TargetTarget

MarketMarket

Product Place

PromotionPrice

TargetTarget

MarketMarket

Product Place

PromotionPrice

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Definition Physical distribution :

Activities used to move products from producers toconsumers and other end users

Goal Of Physical DistributionRight Goods

Right Place

Right Time

Right Quantity

Right Support Services

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Marketing through distributor

in foreign market

Initial distributor selection

Distributor agreement

Financial and pricing considerations

Marketing support considerations

Communication

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Nikes Do it yourself1970s independentdistributors

successful brand at home

1980s established ownsubsidiaries overseas

Now controls mostsubsidiaries

even bought somedistributors

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Marketing through firms own

presence Firm has its own staff in market

Still deal with existing wholesale, retail , transport system

1 .Wholesaling in foreign marketDue to differences in the economy , level of development,and its infrastructure so varying in degree of efficiency

size

service pull strategy (heavy consumer advertising)

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Contd

2. Retailing in foreign market

Greater number , smaller size

Retailing service like carrying inventory , product display

promotion of product etc.

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Wal-Marts remarkable success

The starting point was relentlessfocus on satisfying customer needs

Wal-Mart goal -provide customers

access to goods when and where theywant them and develop cost

structures that enable competitivepricing

This was obtained by using alogistics technique known ascross-docking

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System Character istics Wal-Mart operates a private satellite-

communications system

Wal-Mart has a dedicated fleet of 1000s oftrucks that serve their warehouses

http://images.google.com/imgres?imgurl=www.ccpo.odu.edu/~arnoldo/ocean405/satellite.gif&imgrefurl=http://www.ccpo.odu.edu/~arnoldo/ocean405/ocean_405_lecture_supp.html&h=500&w=400&sz=55&tbnid=puj07VSxo2AJ:&tbnh=126&tbnw=101&prev=/images%3Fq%3Dsatellite%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26sa%3DG

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Component of physical distribution

Order ProcessingTasks

Order entry

Order handling

Order delivery

Electronic Data Interchange- computer

integrated order processing with production,inventory, accounting, and transportation.

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Many organizationsprovide hardware

and software to make

order processingmore accurate and

efficient

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Inventory ManagementDetermining When To Order

Reorder point

Order lead time

Usage rate

Safety stock

Just-in-time approach in which suppliesarrive just when needed for production orresale

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Materials HandlingCargo should be unitized orpalletized

Unitizing:

Palletizing:

Containerization consolidation of many itemsinto a single large container

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Packing Two types

1.Consumer 2. industrial Some of packing problems

Weight

BreakageMoisture and temperature

Pilferage and theft

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WarehousingReceive, identify, sort, store merchandise

Used to hold inventory as a buffer

Demand for warehouses is a function of the need for inventory

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Types Of Warehousing1.Privatecompany operated facility

2.PublicIt is rented space and highly seasonal

demand.

Distribution center-large, centralized warehouse

that focuses on moving rather than storing goods

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TransportationLand

Airwater

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Land- Necessary when goods in large quantity

Europe and Japanefficient train system

less developed countries rely on road transport

Air - Accounts for only 1 % of total international freightmovement ,for high value product.

Water- Bulk shipping is important in international trade.

three basic types 1.conference line2.independent line

3.tramp vessel

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Factors Considered In

Choosing Transportation ModeMarket location

SpeedCost

Load Flexibility

Accessibility

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Odyssey meetscustomer needs by

offering

transportationoptions

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Documentation:

Shipping Documents

Export LicenseShipper's Export Declaration FormHazardous CertificatePacking ListShipper's Letter of InstructionDock Receipt

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Documentation:

Collection DocumentsCommercial InvoiceForeign Customs InvoiceConsular InvoiceCertificate of OriginInspection CertificateSpecial Purpose Documents

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Proportional Cost of Each

Physical Distribution Function

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Conclusionmuch more complex task than transportation of freight

locally.

In each foreign market ,the firm must analyze thelogistic environment and infrastructure

Modern technology can be a big help

However, in the future, international marketing success

may depend economic physical distribution of goods.

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REFERENCE:

1.Vern terpstra , Ravi sarathy ; international marketing (8th edition):harcourt asia pte ltd. ; pp : 412-441.

2. Physical distribution and inventory management; available at

http://www.mgtclass.mgt.unm.edu

/.../13%20%20Physical%20Distribution%20Management (accessedon 29th January 2010)

3.Modes of entry ;available at http://www.marketing

teacher.com/Lessons/lesson_international_modes_of_entry.htm(acc

essed on 30th

January 2010)4. Introduction to physical distribution ;available at

www.cbpp.uaa.alaska.edu/afef/BA447-index.htm(accessed on 28th

January 2010)

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5.Internatioanal physical distribution available atwww.emeraldinsight.com/10.1108/eb008243

(accessed on 29th January 2010).

6. Sak onkvisit , John J . shaw international marketing (3rd

edition); pp :500-531.

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