Chapter 12: Global Marketing Channels
Learning Objectives
• Discuss the development of global marketing channels and current distribution
trends
• Identify the factors that affect channel strategy decisions
• Describe the characteristics of distribution channels
• Describe the features of global retail channels
• Explain the causes and effects of global channel innovations
• Discuss physical distribution issues and logistics
Chapter Overview
The characteristics of customers, products, middlemen, and environment all impact
channel design and strategy. Consumer channels may be direct, via mail, door-to-door,
the Internet, or direct factory/manufacturer outlets; or they may involve one or more
levels of resellers. A combination of the manufacturer’s sales force, agents/brokers, and
wholesalers may also be used. Channels for industrial products are less varied, with the
manufacturer’s sales force, wholesalers, and dealers or agents being utilized. In
developed countries, retail channels are characterized by the substitution of capital for
labor. The opposite is true in less developed countries with abundant labor. Such
countries disguise their unemployment in inefficient retail and wholesale channels suited
to the needs of consumers; such channels may have gross margins that are 50 percent
lower than those in self-service stores in developed countries. Transportation and physical
distribution issues are critically important in global marketing because of the
geographical distances involved in sourcing products and serving customers in different
parts of the world.
Lecture Outline
I. Global Marketing Channels – History and Trends (p. 324)
II. Channel Strategy (p. 326)
a. Customer Characteristics
b. Product Characteristics
c. Middleman Characteristics
i. Selection and Care of Distributors and Agents
ii. Agent/Distributor Performance
iii. Termination
d. Environmental Characteristics
III. Distribution Channels: Terminology and Structure (p. 335)
a. Consumer Products
i. Door-to-Door Selling
ii. Manufacturer-Owned Store
iii. Franchise Operations
iv. Combination Structures
b. Industrial Products
c. Global Retailing
IV. Global Channel Innovation (p. 341)
V. Channel Strategy for New Market Entry (p. 342)
VI. Physical Distribution and Logistics (p. 343)
a. Order Processing
b. Warehousing and Inventory Management
c. Transportation
VII. Case Example: Japan (p. 346)
a. Devising a Japanese Distribution Strategy (p. 347)
VIII. Summary (p. 348)
Tables and Figures
Table 12-1 Apple Store Locations (p. 328)
Figure 12-1 Criteria for Evaluating Distributors (p. 333)
Figure 12-2 Marketing Channel Alternatives – Consumer Products (p. 336)
Table 12-2 Top 10 Global Franchises 2012 (p. 337)
Table 12-3 Non-US Franchise Companies 2012 (p. 338)
Figure 12-3 Marketing Channel Alternatives – Industrial Products (p. 339)
Sidebars
Sidebar 13-1 Hypermarkets (p. 325)
Sidebar 13-2 The Apple Stores – Something New Under the Sun (p. 327)
Sidebar 13-3 A Case of Wine: Distribution Channels (p. 329)
Sidebar 13-4 Channels in Less Developed Countries (p. 340)