Global Challenges And Opportunities

1. Global Challenges And Opportunities Teacher – ShahedRahman

2. Basics !! • Virtually its impossible for a single company to satisfy the all the consumers. • Designing a global channel strategy that takes into full account the richness and diversity of the international market is difficult • Partnership don’t always workout

3. Reason for International Exchange Relationships • Facilitating Market Entry • Boosting Market Share • Introducing New Products through Existing Channels • Improving Service Performance • Responding and Adapting to Shifting Market Conditions

4. Reason for International Exchange Relationships • Facilitating Market Entry • Develop international exchange relationships to accelerate or ease entry into new markets • Boosting Market Share • Sometimes own the company to get a market share • Introducing New Products through Existing Channels • Existing distribution channel will help to market the new products

5. Reason for International Exchange Relationships • Improving Service Performance • May be the market is not good but a well known company can enter and increase the service performance of the industry • Responding and Adapting to Shifting Market Conditions • Channel members can also seek new technologies, more stable currencies or greater sales volume through their entry into international exchange relationships • Some companies enter international relationship to block the entry of foreign competitors into their own market

6. Typology of Global Exchange Relationships

7. Direct Marketing Channels • A direct Marketing Channel is one in which the exchange partner takes a membership position in the home country or region • Becomes a player in the domestic economy. • Local Facility • Develop a company based management team operating in the host country • Involvement may range from having a local manufacturing facility to simply having a domestic salesforce. • Market Subsidiary • In this mode channel members established a subsidiary company in the host country or region. • Tries to develop a strong local presence • Subsidiary’s management is typically based in the host country • Foreign Sales Agent • Company designates that for the most part, function as a sales and support staff for goods produced in home-country locations • Do not take the title of the goods

8. Indirect Marketing Channels • When indirect entry is used, the domestic channel member manages the distribution of products or services in a foreign target country through foreign designates. • Foreign designates are also responsible for ensuring customer satisfaction. • Export Management Companies • Piggybacks • Foreign Distributors • Trading Companies

9. Export Management Companies • Offer the services of a manufacturer's representative who specialize in cultivating international exchange relationships in particular locales • Generally based in the country or region • Has expertise and experience critical to the market of interest.

10. Piggybacks • Involves a joint effort at international market entry generally shared among several channel members • One channel member may provide logistics and another inventory control, another provide customer service. • Its challenging to coordinate in foreign market.

11. Foreign Distributors • Most common way • Distributor operating at a wholesale or retail level is contracted to develop and cultivate exchange relationships within the entry market. • Distributors stock inventories and provide local marketing activities.

12. Trading Companies • Trading companies are large, international channel members that have a worldwide presence • Expanse ( Area) of their market coverage • Trading Companies engage in global distribution

13. Indirect and Direct Market Entry Strategies

14. Interface between International Marketing Channels and the Environment • Economic Factors • Political /Legal Factors • Socio cultural factors • Technological Factors • Physical /Geographical factors

15. Selecting International Exchange Partners • FIVE C’s • Costs • Coordination • Coverage • Control • Cooperation

16. Costs • Cost associated with the selection of particular exchange program • Initial Cost • Initial marketing channel setup cost • Identifying and initiating communications and negotiation with prospective exchange partners • Preservation Cost • Cost to maintain a relationship. • Eg. Promotional material or travel expense – accounting expenses • Logistic Cost • Reflect the expense related to transporting goods and managing invenntories. • Who will be responsible for stocking inventories • Who recieves return goods

17. Coordination • How each of the necessary marketing functions will be allocated among the channel participants? • Which partner will perform what channel functions?

18. Coverage • Will a single exchange partner provide sufficient coverage for the target market ? Or • Several exchange partner required?

19. Control • Who will control key channel resources?

20. Cooperation • The degree of cooperation- Try identify by doing more research.