Question

When my newly established FMCG brand launches its brand in a foreign country, how would I design my distribution channel, what should be my distribution channel (direct involvement or indirect involvement) , and which distribution should my brand use intensive, exclusive or selective distribution? What are these distribution channels advantages and disadvantages? (international marketing perspective)

Answer 1

Distribution channels enable the movement of products or services from the supplier to the end-user. It is among the 4 PS which is a product, promotion, price, and placement. These are the key features of the marketing strategy.

a)

There are 3 ways to design a global distribution channel. They are:-

1. International departments:- Establishing an international department, the brand can enter the market directly into international markets.

2. Export management with distributors:- Export management firms along with export advisors can organize the distribution of the products in international regions. Distributors with exporting and importing expertise have the quickest process when the product is sold in the international markets.

3.Online:- Global export has started using the internet and using online tools so that company can deliver the products and services across the globe however it has challenged some foreign distributors

b)

As the is newly established FMCG brand so it can make use of all three ways.

c)

Since it is FMCG it is direct distribution channels.

d)

FMCG brand makes use of intensive distribution. Intensive distribution sells its products across the largest available channels and reaches as many outlets so that customers come from almost everywhere and buy the product.

e)

Advantages of Intensive distribution are:-

1. Ability to sell the products to a wide range of customers due to large scale distribution.

2. As more customers so there, so greater opportunities for the manufacturer to make a profit.

3. Since the product will be at more outlets so more chance of awareness about the product.

Disadvantages of Intensive distribution are:-

1. There is a problem with varying sales as some outlet sells well while others in the loss.

2. Although the sales vary the cost of production and distribution remains the same.

3. Low price products have low margins.