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Physical distribution in international marketing

Presented by: Kalpesh kakadiya Reg. No:090606008 Pharmaceutical marketing MCOPS , Manipal

Under guidance of: Mr. Ajay G. Pise Lecturer Dept. of pharmacy management MCOPS , Manipal

CONTENT
1.Introduction 2. Marketing through distributor in foreign market 3. Marketing through firms own presence 4. Component of physical distribution 5.Documentation 6.Conclusion 7.Reference

Introduction
DISTRIBUTION

Channels /Supply chain Agents Wholesalers Retailers = intermediaries

Physical distribution / Logistics


Product Place
Target Market

Price Promotion

Definition
Physical distribution : Activities used to move products from producers to consumers and other end users Goal Of Physical Distribution
Right Goods Right Place Right Time Right Quantity Right Support Services

Marketing through distributor in foreign market


Initial distributor selection Distributor agreement Financial and pricing considerations Marketing support considerations Communication

Nikes Do it yourself
1970s independent distributors successful brand at home 1980s established own subsidiaries overseas Now controls most subsidiaries even bought some distributors

Marketing through firms own presence


Firm has its own staff in market Still deal with existing wholesale, retail , transport system 1 .Wholesaling in foreign market Due to differences in the economy , level of development, and its infrastructure so varying in degree of efficiency size service pull strategy (heavy consumer advertising)

Contd
2. Retailing in foreign market Greater number , smaller size Retailing service like carrying inventory , product display promotion of product etc.

Wal-Marts remarkable success


The starting point was relentless focus on satisfying customer needs
Wal-Mart goal - provide customers access to goods when and where they want them and develop cost structures that enable competitive pricing This was obtained by using a logistics technique known as cross-docking

System Characteristics
Wal-Mart operates a private satellitecommunications system Wal-Mart has a dedicated fleet of 1000s of trucks that serve their warehouses

Component of physical distribution Order Processing


Tasks
Order entry Order handling Order delivery

Electronic Data Interchange- computer integrated order processing with production, inventory, accounting, and transportation.

Many organizations provide hardware and software to make order processing more accurate and efficient

Inventory Management
Determining When To Order
Reorder point Order lead time

Usage rate
Safety stock

Just-in-time approach in which supplies arrive just when needed for production or resale

Materials Handling
Cargo should be unitized or palletized Unitizing: Palletizing: Containerization consolidation of many items into a single large container

Packing Two types 1.Consumer 2. industrial Some of packing problems Weight Breakage Moisture and temperature Pilferage and theft

Warehousing
Receive, identify, sort, store merchandise
Used to hold inventory as a buffer

Demand for warehouses is a function of the need for inventory

Types Of Warehousing
1.Private company operated facility
2.Public It is rented space and highly seasonal demand. Distribution center-large, centralized warehouse that focuses on moving rather than storing goods

Transportation
Land Air water

Land- Necessary when goods in large quantity Europe and Japan efficient train system less developed countries rely on road transport Air - Accounts for only 1 % of total international freight movement , for high value product. Water- Bulk shipping is important in international trade. three basic types 1.conference line 2.independent line 3.tramp vessel

Factors Considered In Choosing Transportation Mode


Market location Speed Cost
Load Flexibility Accessibility

Odyssey meets customer needs by offering transportation options

Documentation: Shipping Documents


Export License Shipper's Export Declaration Form Hazardous Certificate Packing List Shipper's Letter of Instruction

Dock Receipt

Documentation: Collection Documents


Commercial Invoice Foreign Customs Invoice Consular Invoice Certificate of Origin Inspection Certificate Special Purpose Documents

Proportional Cost of Each Physical Distribution Function

Conclusion
much more complex task than transportation of freight locally. In each foreign market ,the firm must analyze the logistic environment and infrastructure Modern technology can be a big help However, in the future, international marketing success may depend economic physical distribution of goods.

REFERENCE :
1.Vern terpstra , Ravi sarathy ; international marketing (8th edition): harcourt asia pte ltd. ; pp : 412-441. 2. Physical distribution and inventory management; available at http://www.mgtclass.mgt.unm.edu /.../13%20%20Physical%20Distribution%20Management (accessed on 29th January 2010) 3.Modes of entry ;available at http://www.marketing teacher.com/Lessons/lesson_international_modes_of_entry.htm(acc essed on 30th January 2010) 4. Introduction to physical distribution ;available at www.cbpp.uaa.alaska.edu/afef/BA447-index.htm(accessed on 28th January 2010)

5.Internatioanal physical distribution available at


www.emeraldinsight.com/10.1108/eb008243 (accessed on 29th January 2010). 6. Sak onkvisit , John J . shaw international marketing (3rd edition); pp :500-531.

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