Global Marketing Research: Examine Theories And Practices On Global Distribution Channels, Brand Management, And Essay.

In this course, students will examine specific issues of social and cultural environments in the context of global marketing. Global marketing research and product launches are differentiated when entering international markets and when conducting marketing operations globally as opposed to domestically.

Attention is focused on complex problem-solving techniques through an examination of culture and customer differences in different parts of the world. The purpose of this course is also to provide a new learning experience for global marketing professionals who need new methods to develop product design, implement comprehensive marketing brand, and plan strategies throughout the world. Students will be assessed their critical thinking and practical applications through research-oriented assignments.

1.Examinetheories and practices relating to global distribution channels and brand management.

2. Formulate global marketing strategies and the global consumer.
3. Evaluate the impact of culture in international marketing.
4. Critique different leadership styles in the global marketplace.
5. Specify the differences and influences of the diverse consumers in the global marketing environment.

Distribution Channels and Revenue Generation

Distribution channels enable multinational companies to distribute their products in the market to the end consumers and generate revenue from the market. Mau, Cvijikj and Wagner (2018) define distribution channel or downstream supply chain as networks which companies use to make their goods travel to end consumers. Seelig (2017) strengthens the definition by pointing out that distribution channels experience two simultaneous movements. First, the goods flow downwards towards the consumers while revenue flows upwards towards the companies marketing.

Thus, in other words distribution chains enable inflow of revenue and need require as strategic control as upstream supply chains. The downstream supply chains or distribution chains of corporate organisations consist of logistics companies, distributors, wholesalers and retailers.

This is actually a very gross presentation of the distribution chains. Today logistics chains are extremely complex involving participation of several supporting companies like cloud computing companies, payment gateway companies, banks and ecommerce companies. The distribution channels of multinational companies are governed by macroeconomic factors and are directly dependent on the rate of economic development of countries. The aim of the paper would be to study these aspects through the lenses of Nestle as the company and the United States of America as the chosen country.

Economic development of countries and distribution channel:

Economic development of host countries have direct implications on the length of the distribution chains. This is because as per Easterly and Levine (2016) economically development countries provide shorter distribution chains compared to poorer countries. For example, in economically developed nations like the United States, there are strong availability of roads. This availability of roads allow the companies transport their goods faster. Moreover, due to deep penetration of internet, the companies are able to sell goods using ecommerce which is not possible in case of poor countries without deep accessibility of internet.

The consumers can buy goods from multinational companies using ecommerce websites and apps as pointed out by Shaikh and Karjaluoto (2015). They further point out that the economically developed countries have their own resident banks as well foreign banks. These banks enable fast transfer of funds from consumers to the companies marketing the products using net bank and mobile banking channels. Thus, it can it can be inferred from this discussion that multinational companies enjoy shorter and more direct distribution chains in economically developed companies compared due to smooth movement of goods to consumers and reverse movement of revenue.

Ström, Vendel and Bredican (2014) in the support of the opinion of the pervious author mention that the economically advanced countries have retail chains which allow multinational companies to sell the products directly to the consumers. Thus, once again it can be proved that economically advanced nations provide shorter distribution channels, thus enabling the companies sell products more directly to the end consumers. Khoury and Prasad (2016) point out that on the contrary to the economically less advanced nations have poor infrastructure as far as roads and logistics are concerned. This leads to increased cost of transportation to transfer finished goods to end consumers. The economically poor countries have less internet coverage compared to the economically advanced nations.

Economic Development of Countries and Distribution Channel

This leads to increased costs of sell goods to consumers due to involvement of large number of wholesalers and retailers. Thus, it can be inferred from the discussion that economically advanced nations provide shorter and more profitable distribution channels to multinational companies compared to their economically backward counterparts. This fact can apply for the emerging economic giants like China and India. These nations are undergoing fast economic development and thus, attract leading companies from developed economies. Kotabe and Kothari (2016) support this opinion by pointing out that multinational companies headquartered in North America and Europe are increasing their presence in the emerging Asian economies with direct presence in form of wholly owned subsidiaries, some of which are public limited companies capable of raising capital from the host countries.

It can be also be pointed out that these emerging economies have their own resident multinational companies which in turn have presence in the developed markets. It can be pointed out in this respect that there exists a high rate of exchange of finished products and revenue between the developed and emerging markets. The Egyptian daily The Daily News Egypt reports that the emerging countries like China, India, Thailand and Vietnam are among the fast emerging ecommerce markets (Dailynewsegypt.com, 2018). Thus, in this respect it can again be pointed out that multinational companies can sell their products directly to consumers in through on the ecommerce platforms.

Further, the emerging nations have wide network of resident and foreign banks, which make payment gateways easily available. Moreover, due to economic developments in these countries, consumers have more disposable income to afford smart phones and tablets to access ecommerce sites to buy goods. These countries also have strong retail chains which again enable the multinational companies to sell goods to end consumers using shorter distribution channels. Thus, it can be inferred while the economically developed and emerging countries enable the multinational companies to hold shorter distribution channels, poor countries cannot provide the facilities which the previous two groups of countries can offer, thus leading to elongation of distribution channels.

Identification and research of a country-the United States of America:

The country identified for the research would be the United States of America. A PEST analysis of the country shows that is politically stable with bilateral ties with both developed and emerging nations. The country also has bilateral relationship with economically backward nations and help the latter to achieve economic development (State.gov, 2018). The outcome of this strong bilateral foreign relationship of Washington enables the multinational companies based in the country to expand into foreign markets. Similarly, foreign companies also enter the American from other countries which increase the competition for the resident companies. As far as threats to the American economy is concerned, it can be terrorism is one of the greatest political threats in t6he US (Steele et al., 2015).

As far as the economic conditions of the United States are concerned, the nation experiences a positive trend in GDP with minor falls. This is evident from the graph above shows that the GDP of the United States of America fell in 2017 but in 2018, it has already shown signs of recovery.

The United States of America

The above graph shows that the currency of the United States of America, USD is gaining strength against two international currencies namely EUR and GBP. This rising value of USD actually reflecting the rising economic power of the United States. It can also be pointed out that the United States of America is the home to several leading companies like Bank of America in the financial sector, Amazon in the ecommerce sector, Google and Apple in IT and P&G in the consumer goods, all of which are global leaders in the respective markets (Taglioni & Winkler, 2016).

Moreover, the country has a strong infrastructure both in terms of transport as well as warehouse facilities. This factor of the United States of America enable the multinational companies hold shorter distribution channels within the country, thus making American business operations more profitable.  The country is strong technology which enable multinational companies hold distribution channels comprising software based distribution and supply chain management. Similarly as Hajli (2015) points out, the society in the United States of America has more access to ecommerce platform due to the developed internet and financial infrastructure of the country.

This once again enables the multinational companies sell goods directly to the consumers on the ecommerce platforms and receive payments directly on the payment gateway. However, Prisha et al. (2017) contradict these opportunities which the United States offers to multinational companies and point out that ecommerce portals are under continuous threats from hackers and data thefts. Thus, it can inferred that though the United States allows MNCs hold shorter distribution chains, terrorism and data theft risks are great threats which the MNCs need to consider.

Identification and research of a company-Nestle:

Nestle is the leading food company based in Switzerland and having operations of mpore than a hundred companies. The company is a public limited company listed primarily on the Swiss Exchange (Nestle.com, 2018). Nestle has direct presence in its main markets like the USA, China and India through wholly owned subsidiaries. These subsidiaries of Nestle are either public limited companies listed on the top stock exchanges in the host countries or private limited companies. The company operates in the countries in which it has no direct presence using agents.

Thus, it can again be pointed out that in economically developed countries Nestle enjoys shorter distribution channels while in economically poor nations, the company has to depend on long supply chains involving third party retailers and wholesalers.  The product line of the company consist of a wide range of dairy products and cereal based products. The consumer segment of Nestle consist of children, adults and even pet animals. Nestle holds some of the top brands like Nestum, Maggi and Kit Kat.

Challenges and opportunities Nestle would face in the US:

Reasons for Nestle and distributors expectations concerning contractual relationships:

The relationships between international marketers like Nestle and distributors should be based on contracts in order to ensure high level of transparency between them. Contracts determine the goods to be distributed, the price, the destination markets and all other crucial details. This enables the marketers to maintain control over their goods even after the same is handed over to the distributors. Secondly, the distribution channels are also certain about the payments. Thus, contracts in turn protect distributors against financially strong marketers. Thus, the contracts ensures smooth business operations between distributors and marketers.

Conclusion:

Nestle should expand its distribution channels in poor countries as well. This would enable it to shorten its distribution channel and operate more profitably.

References:

Bea.gov. (2018). Retrieved from https://www.bea.gov/news/glance

Bloomberg.com. (2018). Retrieved from https://www.bloomberg.com/quote/EURUSD:CUR

Dailynewsegypt.com. (2018). Retrieved from https://dailynewsegypt.com/2018/04/01/countries-fastest-growing-e-commerce-sales/

Easterly, W., & Levine, R. (2016). The European origins of economic development. Journal of Economic Growth, 21(3), 225-257.

Hajli, N. (2015). Social commerce constructs and consumer's intention to buy. International Journal of Information Management, 35(2), 183-191.

Khoury, T. A., & Prasad, A. (2016). Entrepreneurship amid concurrent institutional constraints in less developed countries. Business & Society, 55(7), 934-969.

Kotabe, M., & Kothari, T. (2016). Emerging market multinational companies’ evolutionary paths to building a competitive advantage from emerging markets to developed countries. Journal of World Business, 51(5), 729-743.

Mau, S., Cvijikj, I. P., & Wagner, J. (2018). Understanding the differences in customer portfolio characteristics and insurance consumption across distribution channels. working paper, University of Lausanne.[Google Scholar].

Nestle.com. (2018). Retrieved from https://www.nestle.com/aboutus

Prisha, P., Neo, H. F., Ong, T. S., & Teo, C. C. (2017). E-Commerce Security and Identity Integrity: The Future of Virtual Shopping. Advanced Science Letters, 23(8), 7849-7852.

Seelig, M. J. (2017). U.S. Patent No. 9,754,265. Washington, DC: U.S. Patent and Trademark Office.

Shaikh, A. A., & Karjaluoto, H. (2015). Mobile banking adoption: A literature review. Telematics and Informatics, 32(1), 129-142.

State.gov. (2018). Retrieved from https://www.state.gov/r/pa/ei/bgn/

Steele, R. R., Parker, M. T., & Lickel, B. (2015). Bias within because of threat from outside: The effects of an external call for terrorism on anti-Muslim attitudes in the United States. Social Psychological and Personality Science, 6(2), 193-200.

Ström, R., Vendel, M., & Bredican, J. (2014). Mobile marketing: A literature review on its value for consumers and retailers. Journal of Retailing and Consumer Services, 21(6), 1001-1012.

Taglioni, D., & Winkler, D. (2016). Making global value chains work for development. The World Bank.