The internet and other related media are dramatically

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The Internet and other related media are dramatically altering distribution eBay pioneered Peer-to-Peer Marketing (P2P) What are the types of utility that the Internet provides? Answer: time, place Can the Internet as a distribution channel provide information utility as well? It depends on how readily available the information related to the product and after-sales services are Door-to-Door Selling Low-cost mass-market products and certain services can be sold door-to- door via a direct sales force E.g., AIG insurance, Mary Kay, Tupperware, Avon, Amway Unlike the case in the US, ½ of cars are sold door-to-door in Japan Many Japanese car buyers never visit dealerships Car buyers expect numerous face-to-face meetings with a sales representative During these meetings, trust is established. The relationship between auto salespersons and the Japanese buyers continue after the deal is closed. Sometimes sales representatives send cards and continually seek to ensure the buyers’ satisfaction Psychology in Marketing: The Foot in the Door Technique This part is unrelated to the course but we talked about this in class (i.e., no need to study this for the final exam) because it is an interesting psychological phenomenon
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If you get a customer to agree to a small request, they are more likely to agree to a larger request Manufacturer-owned store Independent franchise store Walt Disney opening 600 new stores globally Nike, Apple, well-known fashion design houses, or companies with strong brands Establish flagship retail stores to showcase products Supplement distribution through independent retail stores (e.g., Wal-Mart) Industrial Products
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Choosing Channels Product characteristics Perishability If the product has a short shelf life, manufacturer has to get the product to the consumers more quickly E.g., Technical product Requires direct sales or highly technical channel partners Size of the product line A broader product line is more suitable for a more direct channel Control More control in direct sales (but a more direct channel also tends to be costly) Coverage Do the channels have the geographic reach that you want to attain? Easy in major metropolitan areas but difficult in smaller cities or sparsely populated areas Establishing Channels A global company can choose to either use existing distribution channels or build its own Direct involvement - the company establishes its own sales force or operates its own retail stores Direct involvement in distribution in a new market can be expensive Not having sufficient volume to cover overhead costs Indirect involvement - the company utilizes independent agents, distributors, wholesalers, and retailers If competition is already intense in the market that you want to enter, and brands and supply relationships are already established, then it would be hard to use existing channels, in this case, you may want to establish your own channels of distribution (i.e., direct involvement). But direct
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  • Spring '13
  • Marketing, channel partners, Global Retailing

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