International Marketing Strategy: Effective Distribution and Channel Management

2) Explain the role of channel intermediaries in the product distribution process. Why is their role important?

Different retailing businesses have very different distribution methods based on the types of product that they sell, some arguably more effectively than others.

Distribution channels are organized in several ways: conventional, vertical, horizontal and multichannel (Kern R. 2013). Some of these organizational methods are more structured than others. When a distribution channel deals with more than one independent producer, such as wholesalers and retailers, the channel is known as a conventional distribution channel. (Kern R. 2013) These channels are not normally known to be strong and typically don’t give the customer the quality of product that they deserve. In a vertical marketing system, the retailers, wholesalers and producers, join forces to create a unified front, promoting an individual product (Kern R. 2013). Vertical distribution channels are stronger than the conventional distribution channels because all of the companies involved carry some of the load of power. (Kern R. 2013) In a horizontal distribution channel, companies join up and combine all of their finances and resources, in order to take on more than one company or product (Kern R. 2013). A multichannel distribution channel is where a large corporation uses two or more marketing channels to better target their desired customer segments (Kern R.

1.2.3 Place The degree and way that distribution is adapted is dependent on the culture in the country and the existing channels within such country. Distributing a product or service to the customer at the right location in good time is an important element of the marketing mix. In international markets distribution involves more parties than national distribution and the strategy taken depends on profit margins, laws and transportation costs.

The original formula for Red Bull was developed in 1964; however, the Red Bull company was not founded until 1984 after a merger between Dietrich Mateschitz, marketing guru, and Chaleo Yoovidhya, the owner of the Red Bull formula. Categorized as an energy drink, Red Bull was initially designed to “treat jet lag and boost energy for truck drivers” (Hollensen, 2012). In today's era, Red Bull is commonly used as an energy drink; like coffee, and as a mixer in alcoholic drinks, like Red Bull Wings and the Jägerbomb. This aligns with the company's focus on the younger generations of partygoers and post-secondary students.

Channels of distribution are important in term of getting to customer, warehouse management and distribution to

There are various criteria that are used by the manufacturers to evaluate potential intermediaries for firm’s distribution channel. Among this criteria include

cigarettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to chose from. In other words, if one brand is not available, a customer will simply choose another.

Furthermore, the government is willing to make the country more liberal. In this intent, Brazil is a part of the Common Market of the South, Mercosur which has founded Common External Tariffs (CET) for Argentina, Brazil, Paraguay and Uruguay, concerning a growing number of products. In the geographic area of Mercosur, the tariffs are also eliminated, and factors of production (labour or capital for example) can move freely. These CET apply for equipment goods at rates included between 0% and 14%[ http://www.septimanie-export.com/fr/fiches-pays/bresil/acces-au-marche] (numbers given for the tariffs applied on the CIF[ Cost Insurance Freight] price of goods). This is a big opportunity for Ikea, because reduced tariffs would reduce prices on their imports to Brazil if they set up one or more outlets there.

The channel will be most effective when each member of the tasks that could be done better is assumed. Ideally, because the success of Individual members of the channel depend on the success of the overall channel, all channel firms work together seamlessly. We must understand and accept their roles, coordinate goals and activities, and cooperation to achieve the overall objectives of the channel. Through cooperation, they can feel more effectively, and service, and to meet the target market. In a large company, the formal organizational structure assigns roles and provide the necessary leadership. But in the distribution channels consisting of independent companies, it has not been formally set of

“A distribution channel strategy enables us to sell to customers in geographical areas or market sectors that the direct sales team cannot reach. We can choose from a number of distribution channels, including wholesalers, retailers, distributors and the Internet. Each channel gives us different options for dealing with customers and prospects. However, to ensure that our distributors operate effectively on our behalf, our strategy must incorporate the right level of control and support.” (Linton)

At the present time, with the development of economy, in order to make large profits, a growing number of enterprises pay much more attention on choosing distribution channels. Keegan and Schlegelmich (2001) explained that distribution channel can be considered as the method which is used for enterprises putting products into the market for consumers to use. The traditional distribution channel goes from supplier, manufacturer, distributor, wholesaler and retailer (Frazier, 1999). Indirect and direct are two different types of distribution channels (Wilkinson, 2001). According to Silva (2008), “Well-chosen channels constitute a significant competitive advantage, while poorly conceived or chosen channels can doom even a superior product or

As a large company, Chocoberry must aim to be present and available nationally, and the company has two options of distribution intensity to consider, intensive or selective distribution. The Business Dictionary define distribution intensity as “The level of a product 's availability in a market selected by a marketer. The level of distribution intensity the marketer chooses is often dependent on factors such as the size of the target market, pricing and promotion and production capacity, in addition to the amount of service the product will need after its purchase if applicable.” Intensive distribution aim to cover the market by using all available outlets, this way Chocoberry new product can be available anywhere the consumer demands them. In this type of intensity distribution, customers can find the product easily. On the other hand, selective distribution limited the number of outlets, and focuses the product more to its main target market. The advantage is that Chocoberry can choose the best retailer/wholesaler, but customers will not find the product everywhere or easily. In order to choose the best intensity, Terry Hersch with the distribution team of Chocoberry must to decide

For the equilibrium margins, they explicitly model the behaviour of different agents on the market. Because the agents' behaviour changes in response to changes in the economic environment, they observe changes in the margins of channels in total and how they are distributed among channel members. They explain this variation by examining the impact of directly measurable on the total margins in the distribution chain and the share of these margins, which manufactures and retailers obtain factors. They analyze the market factors affect total margins over the channel, the size of other manufacturer specifications and retailers have a significant impact on how the margins are

There are several channels of distribution available for the firms to use, the typical channel involves the manufacturer, the wholesaler, the retailer and finally the consumer