Tesco

CHAPTER 12

GLOBAL MARKETING CHANNELS AND PHYSICAL DISTRIBUTION

SUMMARY

A channel of distribution is the network of agencies and institutions that links producers with users. Physical distribution is the movement of goods through channels. Business –to-consumer marketing uses consumer channels; business-to-business marketing employs industrial channels to deliver products to manufacturers or other types of organizations. Peer-to-peer marketing via the Internet is another channel. Distributors and agents are key intermediaries in both channel types. Channel decisions are difficult to manage globally because of the variation in channel structures from country to country. Marketing channels can create place utility, time utility, form utility, and information utility for buyers. The characteristics of customers, products, middlemen, and environment all affect channel design and strategy.

Consumer channels may be relatively direct, utilizing direct mail or door-to-door selling, as well as manufacturer-owned stores. A combination of manufacturers' sales force, agents-brokers, and wholesalers may also be used.

Global retailing is a growing trend as successful retailers expand around the world in support of growth objectives. Retail operations takes many different forms, including department stores, specialty retailers, supermarkets, convenience stores, discount stores, warehouse clubs, hypermarkets, supercenters, category killers, and outlet malls. Selection, price, store location, and customer service are a few of the competencies that can be used strategically to enter a new market. It is possible to classify retailers in a matrix that distinguishes companies offering few product categories with an own-label focus; many categories-own-label focus; few categories-manufacturer-brand focus; and many categories-manufacturer-brand focus. Global retail expansion can be achieved via organic growth, franchising, acquisition, and joint venture....