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International Distribution and Logistics

•Swatch’s channel design

•Today’s system of exchange

•Rationalising local channels

•Wholesaling

•Nike’s ‘Do it yourself’

•Retailing

•Creating new channels

•Kodak’s own airfreight hub

•Global logistics

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Global Channel Design

•Chosen intermediariesmust meet criteria

•work closely withdistributors

•build sustain brand

•avoid discounting

•‘shops in shops’ approache.g department stores

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Negotiation

Promotion

Contact

Transporting and storing

Financing

Packaging

Money

Goods

Today’s system of exchange

Producers

Users

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Rationalising Local Channels

•Changing distributors - where a poor job isbeing done e.g. Nike took on distributors

•Dual distribution - multiple channels mayemerge e.g Goldstar in USA (OEM dealwith Sears, later under own brand)

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Wholesaling

•Vertical integration

•power and competition 80/20 rule e.g. Malaysia a dozenEuropean import houses handle half of the trade, whilsthundreds of smaller companies handle the remainder

•Efficiency

•trend towards integration by technology e.g. Wal-Mart

•Types of wholesaler

•fit all bills e.g. full-service wholesalers

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Nike’s ‘Do it yourself’

•1970s independentdistributors

•successful brand at home

•1980s established ownsubsidiaries overseas

•Now controls mostsubsidiaries

•even bought somedistributors

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Retailing

•Middlemen who sell directly to the consumer

•Retailing and lifestyles

•many in developed world

•retailers are globalising

•Problems for marketer?

•Gillette blades through drugstores in USA, tobacco shops inItaly, department stores in Germany, street in Moscow,counters in Thailand, travelling vans in India

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Creating New Channels

•Retailing is dynamic

•Innovative over recent years

•self-service

•discounting

•vending machines

•mail-order houses

•fast-food globally diffused

•Global retailing

•success for Carrefour in Brazil and Argentina

•Marks and Spencer had problems in Canada and pulled-out

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Kodak’s own airfreight hub

•Minimise shipping errorsand product handling

•loaded onto trucks atRochester plant

•All paperwork is alreadycompleted

•flight approval is obtainedbefore truck arrives atairport (JFK)

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Global Logistics

•Focus on channels within a country

•‘the transportation and storage activities necessary to transferthe physical product from manufacturing plants and andwarehouses in different countries to the various local marketcountries’ Johansson (1999)

•Supply chain management

•e.g. Nissan trucks sold in France come from their Tennesseeplant, Micras from Sunderland, Maximas from Japan viaAmsterdam.

•Competition and technology

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•Air Express e.g. FedEX, DHL, UPS and Airborne

•Ocean carriers

•Global carrier alliances e.g. Sea-Land Service of Seattle andMaersk of Denmark have a global partnership.

•Overland transportation

•roll-on-roll-off (RORO) containers are moved from shipsdirectly onto rail (USA)

•Warehousing and inventory management

•e.g. SKF bearings new distribution centre in Belgium reduceddistribution points from 24 to 5