Moving Products Worldwide - Exploring Global Marketing Channels

MOVING PRODUCTS WORLDWIDE - EXPLORING GLOBAL MARKETING CHANNELS Greetings global marketers! Our topic today is international marketing channels - how products physically flow from producers to customers worldwide. From crucial strategic choices to adapting distribution overseas, let's break it all down. Grab your coffee and let's go! Start with the Big Strategic Decision The first key channel decision: where should you locate production to supply your target foreign market(s)? Broadly, you've got three options:  Produce domestically then export.  Produce in the foreign market itself - via foreign direct investment in facilities, joint ventures, contract manufacturing, etc.  Produce in a third country from where you can export to your target market and homeland. Export processing zones are attractive for this approach. Each approach has pros and cons. Domestic production preserves know-how and jobs at home but may lack cost competitiveness. Foreign production brings you closer to local customers but requires major investments. Third country production offers compromises between these extremes. Weight factors like costs, government policies, logistics, and control over operations to choose the best supply configuration. Many firms use a mix of channels tailored to product and market needs. Getting Products from Factory to Foreign Customers Once you've determined the broad supply approach, the next key channel decision is how to reach overseas buyers. Two main options exist: Indirect exporting using international marketing intermediaries to handle distribution and sales abroad. Lower commitment and quicker market entry, but less control. Direct exporting where your company handles international marketing and transactions. Greater investment and risk, but more control and profit potential. Indirect Channels: Leveraging Middlemen Indirect exporting routes include:  Export merchants - buy your product to resell abroad.  Export agents - represent you overseas for commissions without taking product ownership.  Piggyback marketing - partner with a company exporting similar noncompeting goods to share overseas distribution.  Export management companies (EMCs) - handle all your international marketing activities by contract. These middlemen provide quick market access without building your own sales infrastructure. But you're highly dependent on their efforts. Direct Channels: Managing International Marketing Direct exporting means your company handles overseas marketing and sales itself through:  An export department/subsidiary at home office.  Overseas sales branches and affiliates located abroad.  A traveling international sales force.  Foreign-based distributors and agents who represent your company specifically. This requires major resource commitment but provides greater control and profitability. Large exporters mostly use direct channels to access foreign markets. Adapting Distribution Strategies Overseas Once products reach foreign borders, decisions remain about distribution within those countries to get goods to customers. Channels and practices vary widely across nations. Trying to replicate your domestic distribution model abroad often won't work. You need to understand foreign market conditions and adapt strategies accordingly. For instance, huge mass merchandisers and chain stores dominate US retail distribution. But other countries like Germany have more small independent stores. Different strategies fit each environment. Key factors that shape optimal in-country distribution include:  Product characteristics  Customer buying behaviors and preferences  Competitive conditions  Capabilities and availability of local distributors/intermediaries  Legal regulations and cultural norms  Physical infrastructure limitations or strengths Do your homework to craft customized distribution strategies adapted to the unique conditions in each overseas market you enter. Don't just copy-paste what works back home! Partnering for Local Expertise Adapting to complex overseas distribution often requires help from local experts. Strategic partnerships or joint ventures with domestic companies can provide vital understanding of cultural nuances and channel relationships. Rather than go it alone, smart firms ally with local players whose infrastructures, connections, and know-how reduce friction and accelerate market success. A good local partner acts as a bridge into the new environment. Key Takeaways Alright, let's quickly recap:  Start with the big strategic decision of where to locate production to supply your target market(s).  Weigh using indirect vs direct channels to physically reach overseas customers. Each has pros and cons.  Don't blindly replicate home distribution models abroad. Adapt strategies to fit unique foreign conditions.  Partnering with local experts helps adapt distribution approaches and accelerate success.