INTERNATIONAL MARKETING

MANAGEMENT

SESSION 11:
INTERNATIONAL CHANNELS OF
DISTRIBUTION

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CHANNELS OF DISTRIBUTION BARRIERS TO STANDARDIZATION

 Customer Shopping Patterns and Preferences

 Competitor Control of Outlets

 Structure of Distribution (Traditional vs. Advanced)

 Regulation of Distribution

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DIFFERENCES IN DISTRIBUTION FROM COUNTRY TO COUNTRY

DOMINANCE OF ORGANIZED/MASS DISTRIBUTION

(Supermarkets, Hypermarkets, Discounters, etc.)
 Role of Open Air Markets, Itinerant Retailers
 Importance of Small Independents

LOCUS OF POWER
 Extent of Disintermediation
 Retailers as Channel Captains

TECHNOLOGICAL SOPHISTICATION
 Computerized Inventory and Ordering Systems
 Use of Scanner Systems/Smart Cards
 Catalogue and In-Home Shopping
 Internet Sites

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 COUNTRIES DIFFER IN EVOLUTION OF THE RETAIL SECTOR

Traditional
China
Greece OPP
India
Emergent ORT
Mexico U NIT
Brazil IES
Argentina ?
Malaysia Italy
Eastern Europe Portugal Structured
Taiwan Belgium
Spain Japan
South Korea France
Advanced
Denmark
Netherlands Germany
 Multiplicity of formats
Sweden UK
 Competitive intensity
 Retail productivity Canada
 Internationalization USA
 Adoption of technology
 Size of retail enterprise
 Proportion of demand with organized retailers
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Shopping
Shoppingonline
onlineisn’t
isn’tasaspopular
popularininEurope
Europeasasininthe
theU.S.
U.S.and
andJapan,
Japan,but
butthe
theregion
regionshould
shouldcatch
catch
up by 2003 as more e-tailing sites pop up. Browsing for books is popular everywhere,
up by 2003 as more e-tailing sites pop up. Browsing for books is popular everywhere, but but
Europeans
Europeansare
aremore
moreinterested
interestedinintravel
traveldeals.
deals. 5
 TOP 10 RETAILERS WORLD-WIDE
1999 Total Forecast Sales, in Billions of Dollars

Wal-Mart (U.S.) $160.20

Carrefour/Promodes $78.97 pro forma

Metro (Germany) $60.82

Kroger (U.S.) $43.56

Ahold (Netherlands) $42.83

Intermarche (France) $42.71

Carrefour (France) $40.74

Ito Yokado (Japan) $38.98

Albertson’s (U.S.) $38.23

Promodes (France) $37.37

Edeka (Germany) $37.06

Source:
Source:Management
ManagementVentures
Ventures 6
7
 INTERNATIONAL RETAIL EXPANSION STRATEGIES

Product Assortment/Mix

Standardized Adapted

Local Marketing/
Global Retailing Global Systems
Centralized
IKEA Walmart (?)
Management Systems/
Operating Skills
Global Marketing/ Multinational
Local Systems Retailing
Decentralized
C&A Carrefour

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 GLOBAL RETAIL ASSORTMENT STRATEGIES

Few Product Categories

A C
Benetton, Ikea, Habitat, Toys R Us, Virgin
Gap, H&M, C&A Douglas, Spar, Vobis
Private-label Manufacturer
Focus Brands Focus
B D
Marks & Spencer, Carrefour, Makro,
Migros Promodes, Yaohan

Many Product Categories

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 IMPLICATIONS

 Need to Adapt Channel Tactics to Differences in

Distribution Patterns

 Growth of Cross-Border Retailing and E-tailing

 Technology Advances Impact Balance of Channel Power
 Internet Sites as Alternative Channel

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