Join Doug Ladd for an in-depth discussion in this video Distribution issues, part of Marketing Foundations: International Marketing.
- If you've never seen or heard the Monty Python skit about the Cheese Shop, your life is not complete. The National Cheese Shop has a challenge, it doesn't have any cheese. Surely, a failure in the distribution channel has occurred. The distribution channel you used to get your product to the end-user or consumer may change when you go into new geographies. There are several things you need to consider as part of your place or distribution strategy. Exactly how this will impact your business is dependent upon the expansion strategy you choose to pursue.
The considerations vary depending upon whether you use an export model, franchising initiative, joint venture, or direct investment effort. If your business relies heavily on e-commerce purchases and the delivery of products from your facilities to the consumer via mail or packaged delivery services. You should be aware that these complimentary systems are not always as developed and efficient in each country. The process for shipping your product outside of your home country can be complicated and add significantly to the time between when the product leaves your hands and arrives in the end consumers'.
Your distribution strategy will need to reflect these realities. If you don't have someone on your team with skill and experience in dealing with freight forwarders, exporting paperwork, and logistics planning, you want to find the right person to secure the services of someone who can do this for you. The large package delivery company such as United Parcel Service or UPS and Fedex can provide these services for you and they have teams that focus on small businesses. So perhaps you won't need to add new head count to get started.
Getting your product out of your country is just the beginning. The importation process can be long and arduous, but with some proper planning, it can be made manageable. Well it seems like common sense, it's always a good idea to start any distribution conversations by looking at a calendar. Given the long distances required to move things from one continent to another, you may save some money and frustration by plotting out the realistic transit times as items leave your dock. In most cases, it won't make sense to pay for expedited services to get something to another country only to have it arrive on the weekend when many businesses close down.
It's also important to pay attention to different national holidays and religious seasons. Shipping a product to China for arrival during the Chinese New Year when most businesses stop functioning for about three weeks may not be the best idea for you. Once your product arrives in a new country you now have to consider how it will be transported through the distribution channel to reach the end consumer or buyer. Some countries rely heavily on wholesalers, distributors, jobbers, and retailers to move products through the system.
There maybe laws and regulations that require the use of these parties. You can learn more about the specifics at export.gov. An important consideration for any consumer-oriented product that you may take into an emerging or developing market lies in the actual retail site. Many countries do not have large superstores, rather many consumer products are sold in small bodegas, stalls, and shops that don't have much space to offer. These locations do not have room to stock large quantities of your product.
And their customers do not have the ability to transport large quantities of purchased quantities to their homes. If you have a new product that you're introducing to the market you may also need to consider the importance the retailer plays in educating and training the consumer. There may be an opportunity to differentiate your product, brand, and business by recognizing this early and creating a sustainable competitive advantage if you can capitalize on this. Do opportunities exist for you to present a unique benefit to the market through your distribution modifications? I encourage you to challenge some of your core assumptions and look for new growth potential.
The course also investigates options for global expansion, such as exporting, licensing, joint ventures, and direct investment, and details how to put together a successful marketing mix using distribution, promotional methods, and translation. Plus, learn where to turn for more information about your specific target markets.
- The rise of the global consumer
- Learning about customers in global markets
- Accessing foreign markets
- Adapting products
- Balancing risks and rewards