1. Managing Global Distribution Channels13
Managing Global Distribution Channels

2. Learning Objectives
List and describe the key players within both home-market channels and foreign-market channels.
Explain the impact on national channel strategy of distribution density, channel length, and channel alignment.
Describe how costs, product line, control, coverage, and synergy all influence the proper choice of channel members.
Suggest ways to locate foreign distributors.
List ways to motivate and control foreign distributors.
Suggest alternative entry strategies for markets where competitors already control distribution channels.
Identify the differences between global logistics management and global supply chain management.
List and explain the five key areas of global logistics management.
Explain the growing global importance of large-scale retailers, international retailing, direct marketing, on-line retailing, information technology, and smuggling.

3. Chapter Outline The structure of the global distribution system
Foreign-market channel members
Analyzing national channels
Factors influencing the selection of channel members
Locating and selecting channel partners
Managing global distribution
Gaining access to distribution channels
Global logistics
Global trends in retailing
Smuggling 3

4. Factors Shaping Distribution
Level of economic development
Consumer disposable income
Infrastructure quality
Culture
Physical environment
Legal/political system 4

5. Global Distribution System Structure
Channels of distribution provide essential linkages between manufactured products and the consumer 5

6. Foreign-Market Channel Members
Import intermediaries
Local wholesalers (dealers, distributors)
Local agents
Retailers 6

7. Analyzing National Channels
Distribution density
Channel length
Channel alignment and leadership
Distribution logistics 7

8. Factors Influencing the Selection of Channel Members
Costs
Product and product line
Control, coverage, and synergy 8

9. Sources Useful for Locating Possible Distribution Partners
U.S. Department of Commerce
Banks
Directories
Trade shows
Competitors’ distribution partners
Consultants
Associations
Foreign consulates 9

10. Process of Establishing an International Distribution System
Develop a distribution strategy.
Establish criteria for selecting distribution partners.
Locate potential distribution partners.
Solicit the interest of distributors.
Screen and select distribution partners.
Negotiate agreements. 10

11. Gaining Access to Distribution Channels
Piggybacking – Another company that sells to the same consumer segments takes on the new products
Joint ventures – Partnership typically between local firm with market access with a foreign firm with no local access
Acquisitions – Purchasing a local company with existing distribution system 11

12. Logistics Decision Areas
Traffic or transportation management
Inventory control
Materials handling and warehousing
Fixed-facilities location management 12

13. Challenges Facing Firms with Global Logistics Systems
Resources to support the system
Exchange rate fluctuations
Availability of infrastructure
Ease of working with host governments
Costs of the system 13

14. Global Supply Chain Management
Encompasses more than the traditional concept of logistics
Logistics
Marketing relationships
Product development & rollout
Management of product returns 14

15. Successful International Retailers
Three categories:
Replicators – Export model virtually unchanged
Performance Managers – Acquire existing retailers and develop as independent entities
Reinventors – Employ standardized back-end systems and processes while creating tailored retail format 15

16. Smuggling
Smuggling – Illegal transport of products across national borders
Illicit products
Illegal distribution of products that are legal to sell and use 16