Loctite Corporation – International Distribution Fifty years of business has been good to Loctite, a manufacturer and marketer of adhesives, sealants, and other related products. Most recently, the company has started thinking about its international distribution strategy in Hong Kong; Loctite has turned to its already-established and successful ventures in other foreign countries to explore its potential strategies and find a model for success in Hong Kong and ultimately greater China. Currently, Loctite’s distribution strategy is composed of different levels, all building up to the eventual acquisition of equity in the international distributor in order to set its core brand and marketing mix. The first stage of expanding its …show more content…
Loctite’s channel strategies do not differ significantly around the world, and thus its North American strategy and its international strategies are similar. However, there are some key differences, mainly because Loctite cannot own 100% of the dealership business in six countries because these countries’ laws don’t allow 100% ownership by private enterprise. Instead, Loctite has formed joint ventures with companies in Norway, Indonesia, The People’s Republic of China, Taiwan, Thailand, and Venezuela. It should be noted that in all other countries, Loctite owns 100% equity in the distributors. In North America, Loctite’s distribution strategy is selective, only allowing its products to be carried by two to three distributors in the same market. The industrial distributors are narrowed into 12 regions overseen by President of the company. This structure allowed Loctite to focus on its distributors and their strategies while giving the customer a choice of three distributors to purchase from. Using this structure, Loctite can focus more of its attention on providing a superior level of service to its customers, adding more value to its products. Although this structure limits Loctite’s presence in market outlets, by using two or
China’s underdeveloped infrastructure, in particular the land transport system and connection between different forms of transportation, slowed down distribution, increased logistic costs, and finally hindered expansion into rural regions (p.13). As a result of this slow transportation, Wal-Mart’s two distribution centers couldn’t serve the entire country adequately. On the other hand, these distribution centers were significantly underused due to small amount of stores. Consequently, the retailer couldn’t benefit from cost saving through its distribution approach (p.14). Furthermore, communication with the retailer’s 15,000 local suppliers was inefficient and costly due to the lack of an information-technology network (p.14).
Different retailing businesses have very different distribution methods based on the types of product that they sell, some arguably more effectively than others.
Selection of distribution locations that can give a suitable place for customers to purchase company products is a very important way to enhance the distribution advantage. Reliable delivery timing is another point that Siemens can build on to create the needed differentiation through distribution. As Siemens depend on partners in many locations all over the world to perform the task of distributing its products, providing the needed training and support for those partners can help to enhance the distribution differentiation over competitors.
Li & Fung is a long-standing Hong Kong based company that that has evolved from an export trading company to a coordinator of value-added services across the entire supply chain in a global, open manufacturing environment. They assess the clients’ product and delivery needs and orchestrate supply, manufacture and delivery in a very tailored and specialized way (Claremont Conversation Online, 2008). In the prevailing business environment, it has not been cost effective to trade with SMEs since production orders were below the factory minimums. Through the implementation of an internet portal, they have secured their position with the SME market while maintaining economies of scale.
In business, it is essential for management to understand the role and importance of marketing to his or her organization. Management utilizes marketing tools to satisfy the needs of customers, and to gain a better understanding of the product itself. The goal of this paper is to discuss and analyze the distribution practices of Land O Lakes butter. In review of the distribution practices, I will also attempt to show the importance of knowing and understanding the product you are marketing.
Our approach was to facilitate the demand with respect to the market. We penetrated the market by building factory in Fardo and building warehouses to the respective regions, Caleopeia, Sorange, Entworpe, Tyran. Another component that we had to consider was finding the optimal cost to increase market share and increase our profit margin. Discussion on the logistics will be discussed thoroughly, which affected our decision points and our overall outcome. There are a few questions we needed to answer before we built a road map to our strategy i.e. figuring out where to build the factory and warehouse, estimate the demand of the four regions and Fargo region, should we change capacity, adjust ordering point with respect to quantity, and also
Operating such dynamic distribution centers is usually very expensive and allows possibilities of product wastage. The high capital requirement to run such large distribution centers produces a natural barrier to entry and smaller firms frizzle out if they try and compete with the larger firms.
LE is known for its high quality products and its technical innovations. On its 60 years of international experience, the company gained valuable knowledge on what to do and what to avoid when moving abroad, and that is why they refocused their expansion strategy into joint ventures, instead of acquisitions avoiding the
Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This
Distribution channels interfaces the association 's item or administration to its purchasers; and in a maker buyer (administer supply) channel, as on account of Starbucks, keeping up a faculty association with the clients is critical (Brassington & Pettitt, 2000). However, from a dissemination perspective Starbucks got preference by adhering on to its winning store area recipe for its new stores.
1. Describe the current distribution system of the company and explain why it is so important for its brand positioning? Please explain also how the brand is positioned on international markets.
Distribution: Specialized distributors that can increase awareness of target audience at a lower variable cost than generalist wholesaler; specialized stores are significant influencers of target customer’s behaviors
Loctite Corporation is a market leader which is able to command customer retention through innovation and exceptional products. BAM, being introduced to new consumers as a complement to SuperBonder products, represents a good product-company fit because it creates a response to a consumer interested in improving dispensing technology (1977 Market Study). By employing a highly qualified sale force, training facilities and “labmobiles” Loctite is able to successfully respond to the customers interested in technical service in their choice of instant adhesive supplier. Furthermore, by matching BAM with SuperBonder products the company is able to maintain a fit with current strategies; BAM and
A customer stratification perspective is applied for full analysis of TMK IPSCO distribution network of the oil country tubular goods (OCTG) division. Few comprehensive and systematic quantitative studies have been undertaken of the OCTG customer base, and none have been performed of TMK IPSCO until now. Customer Stratification is based on the definitions outlined in Customer Stratification: Best Practices for Boosting Profitability. In this section, the study calls for a detail of the processes used to gather data related to the closed end distributor list. This study shall additionally focus on the measurement and methods of distributor contributions to company performance and profitability. First, the outline of customer stratification and its components are explained. Next, data is drawn from each distributor and discussed. Additionally, the measures and steps followed in validating the various scales and rationale are presented. Finally, a defined look at best practices for an improved path forward regarding distributor contribution to gross profit margin and how to best utilize the sales force for overall EBITDA improvement.
The San Fabian Supply Company is a building materials distributor which supplies the materials to the Philippine construction industry mainly on an exclusive-only basis. Now one of its suppliers MacDowell Corporation notified San Fabian Supply Company that the exclusive-distributor agreement would be terminated in four months. So the company has to make a decision whether to handle MacDowell Corporation’s products on a nonexclusive basis or to drop the line completely. As discussed in our group, we think San Fabian Supply Company and MacDowell Corporation should find a way to accomplish win-win, and selective distribution may be a good way.