DISTRIBUTION IN INTERNATIONAL MARKETING
Distribution and distribution politics
Distribution
= complex of methods and activities, by means of are goods given at disposal to consumer or
user in designated place
= less flexible toll of marketing mix
= building of distribution ways is very demanding and long-term matter
Distribution politics – function
= approach offer to demand
= to secure fluent movement of goods from domestic product to consumer on foreign
market
Distribution strategy
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respects other strategies of marketing mix (price, products, communication)
solves :
density of distribution nest
length of distribution channels
position and election of distribution participants and co-ordination of their activities
logistic
1. Intensive strategy
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many purchase places
mass distribution
standard fast returning goods
purchase in routine way without comparison with competitive products
raised expenses – more connecting links + higher expenses on communication
risk of product commonplace
weaken of mark image
risk of loose of control over competition
2. Selective strategy
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limited number of purchase places, which fulfil quantitative and qualitative requirements
of producer
product with strong image
goods for long-term use, assess of all purchase alternatives
distribution control by producer
creating of strong relationship between producer and selected connecting links
possibility to influent way of distribution and price level by producer
3. Exclusive distribution
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very limited number of purchase places, one distributor
exclusive product
support of image of product exceptionality
higher prices
- exclusive distribution in scope of franchisee
producer controls better level of provided services, propagation and payment conditions
Determining factors
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customer (purchase and consumable behaviour)
culture and economic ambience
competition
targets of firm
financial sources of firm
product character
expenses on distribution
control
Distribution way
1. Direct distribution way
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direct contact producer (supplier) and consumer (user)
positives :
direct contact, communication, immediate feedback, control over price politics and high
of costs
negatives :
difficulties connected with products presentation, difficulty and non-effectiveness in case
of goods of wholesale character, necessary to secure professionally fluent flow of goods –
needs of contacts with some subjects.
2. Indirect distribution way
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length in influenced by number of connecting links
positives :
delegation of activities on connecting links, use of their contacts and knowledge – more
effective way of goods sale, lower consumption of investment
negatives :
lost of control of goods, price and way of distribution, sale, insufficient information about
customers, necessity to motivate connection links to effort, higher costs of distribution and
risk of non-fulfilment of payments and unassailable account receivables.
Types of distribution connecting links :
- negotiators
- intermediaries
- business representatives
- auxiliary connecting links (transport firms, banks) – provide services and facilitate
exchange of goods
Organisation of distribution ways
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distribution ways and connecting links fulfil various function and realise number of
activities – individual participants create between each other connection and mutual
dependency
develop new organisational systems of distribution, where is the activity of individual
subjects regulated and co-ordinated
 vertical
 horizontal
marketing system
 more dimensional
problems of distribution ways :
dissimilarity of participants ´ interests, inconsistency of targets, unclear rights and duties
of participants, overly dependence of connecting links on producer.
Vertical marketing system
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penetration of manufacturing and commercial activities
 closed = one subject owns subjects of others
 contractual = co-operation in form of franchisee
 administrative = dominant position against participants
mutual communication activity, co-operation by storing …
strategic purchase alliance (between commercial firms, mutual approach to suppliers, coordination of marketing activities, co-operation by entering on further foreign markets.
Horizontal marketing system
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connection (temporary, permanent) of sources or programmes of 2 or more companies in
interest of use of new opportunity on market
for example co-operation of supermarkets nests with banks and offer of financial services
directly on purchase places
for example co-operation of firms of the same branch – increasing of attraction of
purchase place, increasing of sale, decreasing of expenses.
More dimensional marketing system
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uses 2 and more distribution ways to achieve customers´ segments
positives :
better covering of market, lower expenses, more comfortable sale
negatives :
bigger independence of new distribution ways can lead to conflict situations, lost of
control
Development trends in international distribution
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caused by process of concentration (on organisation and operational level) and
internationalisation
global commercial firms, strategic business alliances, in MOO appear new form of sale
and their combination, sale without shops (TV, internet, phone)
increasing competition, polarisation of salespersons (large assortment x specialised sale)
decreasing of extent of distribution in VOO
sale under mark of distributor and under his own (private label).