1. Welcome to class of International Distribution by Dr
Welcome to class of International Distribution by Dr. Satyendra Singh University of Winnipeg Canada

2. International Distribution
Distribution Structure
Traditional
Modern
Retail Giants
Distribution Patterns
General
Retail

3. Distribution Structure…
Difference Between Domestic and Foreign Structure
PEST
Super-efficient system in the USA vs. highly complex in Japan
Traditional Distribution Structure
Import-oriented structure
High price, small no of affluent customers
Sellers market  demand exceed supply
Absence of cars and telephones
Local monopoly of small stores
Buy daily in developing country vs bi-weekly in Canada
Intermediaries do not perform specific activities
Import-wholesalers perform marketing function
Advertising, marketing research, warehousing, financing, storage

4. Distribution Structure…

5. Distribution Structure…
Japanese Channel Structure
Small intermediaries and dealers
Manufacturers control the channel
Business philosophy is rooted in the unique culture
Laws protect small retailers

6. Distribution Structure…

7. Distribution Structure…
Modern Channel Structure
Change in discounting, self-service, mass merchandizing, return policy…
Change in direct marketing
Door-to-door selling, hypermarkets, shopping malls, catalogue, Internet
Wal-Mart, Carrefour (France), Praktikar (Germany), Ikea (Sweden)
Higher margin in EU than US
Internet-based system for ordering and delivering (low cost, efficient)
GM, Ford, Nissan, Renault and DaimlerChrysler
Roebuck and Carrefour
Brick-mortar eg. Dell, Brick-click eg Amazon, DHL, UPS
Convenience store as a pickup points for web-orders

8. Distribution Structure
Retail Giants Structure
Retailers cannot export except by Internet
Wal-Mart, McDonald’s, Home Depot take risk in foreign markets
Europeans: quick to enter foreign market, emphasis on being first, retail strategy, local needs and taste
Americans: exploit domestic market first, emphasis on efficiency, standardization and value to customers
International retailers have advantages over local retailers
World-class business processes
Technology
Financing
Organizational capabilities
Greater buying power
Superior service…

9. World’s 10 Largest Retailers

10. Distribution Pattern…
General Pattern
Foreign channels are not the same as domestic channels
Intermediary services are different
Storage and wait for customers to come and see them, India, Egypt
Line breadth
Dealing-only narrow lines
Requires government license
Cost and margin
Shorter channel for industrial or expensive goods
Inverse relationship b/w length of channel and size of purchases
Non-existent channels – selling on the roads!
Blocked channels – competitors or relationships
Power and competition – large whole sellers finance downstream
Limited stocking – pickup from factory/distributor, if possible

11. Distribution Pattern Retail Pattern
Product lines: narrow (Italy,Morocco) vs. broad (Japan)
Size pattern
No of person served per retailer– higher in developed countries
May be difficult to reach so many small retailers across a country
Depends of economic development – single cigarette
Direct marketing – mail, tel, door-to-door
Usually best for developed economy, but Eastern European gaining popularity; e.g., Amway
Resistance to change
Government attitude
Local retailers need to compete
Product selection
Greater convenience
Customer service
Liberal store hours
Retailers cannot close/open stores at their wish

12. Retail Structure in Selected Countries