Global Logistics/ Channel Structure

Course Instructor : Sneha Sharma

Global Logistics

It is defined as the design and management of a system that directs and

controls the flows of materials into, through and out of the firm across national boundaries to achieve its corporate objectives at a minimum total cost .

It encompasses materials management, sourcing, and physical distribution.

Global Logistics

Materials management It refers to the inflow of raw materials, parts, and supplies in

and through the firm.

Physical distribution It refers to the movement of the firm’s finished products to

its customers, consisting of transportation, warehousing, inventory, customer service/order entry, and administration.

Sourcing strategy It refers to an operational link between materials

management and physical distribution, and deals with how companies manage R&D (e.g., product development and engineering), operations (e.g., manufacturing), and marketing activities.

Global Logistics

Factors Affecting choice of Channels

Identify specific target markets within and across countries

Specify marketing goals in terms of volume , market share and profit margin requirements

Specify financial and personal commitments to the development of international distribution

Identify control, length of channels, terms of sale and channel ownership.

6 C’s of Channel Strategy

Cost Capital

Control Coverage

Character

Continuity

Factors affecting channel decisions

Customer Characteristics

Product Characteristics

Middleman Characteristics

Customer Chracteristics

Number

Geographic distribution

Income

Shopping Habits

Reactions to different selling methods

Product Characteristics

Degree of standardization

Perishability

Bulk

Service

Unit price

Middleman Characteristics

Cherry Picking

Selection and care of distributors and agents

Agent/Distributor performance

Termination

Distribution Channels

These channels link manufacturers to customers.

Consumer Channels

Industrial Channels

Marketing Channel Alternatives: Consumer Products

Door to Door Selling

Manufacturer Owned Store

Franchise Operations

Combination Structure

Marketing Channel Alternatives: Consumer Products

Marketing Channel Alternatives: Industrial Products

Elements involved Manufacturers sale force Distributor/agents Wholesalers

Marketing Channel Alternatives: Industrial Products

Channel Strategies

Channel Strategies