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Welcome to class of International Distribution by Dr. Satyendra Singh University of Winnipeg Canada. International Distribution. Distribution Structure Traditional Modern Retail Giants Distribution Patterns General Retail. Distribution Structure….

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welcome to class of international distribution by dr satyendra singh university of winnipeg canada
Welcome to class of International DistributionbyDr. Satyendra SinghUniversity of WinnipegCanada
international distribution
International Distribution
  • Distribution Structure
    • Traditional
    • Modern
    • Retail Giants
  • Distribution Patterns
    • General
    • Retail
distribution structure
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
distribution structure5
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
distribution structure7
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 www.covisint.com
      • Roebuck and Carrefour www.gnx.com
    • Brick-mortar eg. Dell, Brick-click eg Amazon, DHL, UPS
    • Convenience store as a pickup points for web-orders
distribution structure8
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…
distribution pattern
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
distribution pattern11
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