Establishing Distribution Channels¶

Selecting Distributors¶

Guideline: Choose distributors based on their ability to develop markets rather than merely having a few good customer contacts.
Example: Select a distributor with a strong network and proven track record in market development rather than one with limited but high-quality contacts. For instance, a distributor who has successfully introduced new products in the Asian market could be preferable for launching innovative products in similar markets.
Strategy: Treat local distributors as long-term partners, not just as temporary solutions for market entry.
Example: Instead of using distributors merely to gain initial access, companies like Toyota engage in building capacity and offering extensive training to their distributors, ensuring a long-term commitment and alignment with the brand’s standards.

Objective: Facilitate market entry by investing resources such as capital, managerial expertise, and effective marketing strategies.
Example: A tech company entering the European market might invest in local advertising campaigns, tailored to the regional audience, and send experienced managers to oversee the setup.

Guideline: Maintain control over the marketing strategy from the start and ensure that distributors provide detailed market and financial performance data.
Example: Coca-Cola maintains brand consistency by closely monitoring its global marketing campaigns and requiring regular reporting from its bottlers and distributors on sales volume, market reach, and promotional activities.

Objective: Encourage collaboration among national distributors to leverage collective strengths and insights.
Example: An FMCG company might organize annual meetings with all its distributors to share best practices, discuss market trends, and coordinate marketing efforts across different regions.

Department Stores: Major retailers offering a wide range of products under one roof, focusing on quality and customer service.
Example: Macy's in the USA, which provides diverse merchandise with a focus on fashion and home goods.
Specialty Retailers: Stores specializing in specific product categories, offering deep expertise and variety within those categories.
Example: Sephora, specializing in beauty products, offers an extensive range of brands and personalized beauty services.
Supermarkets: Large, low-cost stores with a wide variety of food and household products, focusing on volume and efficiency.
Example: Tesco in the UK, which combines grocery and merchandise offerings tailored to local customer needs.
Convenience Stores: Small outlets offering everyday items at convenient locations with extended operating hours.
Example: 7-Eleven, known for being open 24/7 and conveniently located for quick shopping trips.
Discount Stores and Warehouse Clubs: Retailers offering products at reduced prices through cost-cutting practices and bulk buying.
Example: Walmart and Costco, which leverage economies of scale to provide low prices for bulk purchases.

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