Global distribution is one of the global marketing strategies which has further strategies to improve the effectiveness of global marketing. So, what’s exactly the global distribution strategy?
Well, it is a process of selecting the most suitable export countries, finding the right channels for distribution, and positioning the products or services in a way that the sales begin to grow. But, this requires local market knowledge and a well-structured plan.
So, let’s discuss all of this one by one…
Initial Country Selection
If you plan to export, you will first need to know the factors that drive the sales of your products and services. For example, if you intend to provide cybersecurity training, you will have to look for the countries having the biggest IT industry.
This shows that the potential markets that you should look for are those with growing demand for your product or service. This also provides the best chance to develop a competitive advantage that others cannot copy.
Market Verification Check
With some research and global trade data, you can easily select the countries to work with. But, that’s not all. You also need to check for the competition that prevails in that specific region. For example, it is easier to compete in a market having smaller players as compared to those with a single big incumbent.
While doing your market verification check, you need to see;
- The adequacy of your product or service in the market
- Possible distribution channels
- Publically available data
- Potential competitors and their price range
Regulations and Localization
Before you select your target countries, you need to check for the applicable regulations and report on:
- Whether the relevant licenses, certifications, permits, and tests from your country accepted in your target country
- Whether any import duties or levies impact your margin structure
- The need to translate the documents into the local language
- The right product categories
- The general labeling laws, regulations, or restrictions
- Whether you need a customs broker, law firm, local distributor or to start your own legal system
Choosing the Right Distribution Channels
There are three options to set up your local sales while you try to enter a new market:
- Online – Platforms like Alibaba, Amazon, or eWorldTrade facilitate online marketing, deal-making, and payment, however, you can also invest in your own website. In case your product can be shipped easily, then online sales is surely a good option. Though online sales may be easy to set up, they often need substantial investment in advertising and promotion.
- Working with channel partners – When it comes to selling products in the international markets, the distributors having experience in importing and shipping have the easiest yet fastest procedures. To sell services or customized products, the resellers or agents can perform a similar role. This allows expanding your business to more markets with fewer costs.
- Local departments – this refers to hiring staff and facilities just to initiate all marketing yourself. Although it gives you complete control over distribution, it is the most expensive way of entry. This often works best for bigger markets where there are limited cultural differences with your home country.
Company Profiling
To convince a distributor, agent, or potential channel partners to invest their shelf space and time into your product, you need a compelling story that answers the following questions:
- Where is the position of your product in their portfolio and what new and potential customers would it attract?
- What are your pricing suggestions and how much margin can they get?
- Which of their current offerings competes most with your product?
- What is your product’s market potential?
- Whether/what comparable data have you collected from other markets?
- How will you support them to introduce your product?
Online Advertising, Marketing, and PR
Even when have found a capable yet active agent or distributor, you still need to track and push your product in the market. Since it is your brand, you have to decide whether the content that gets on your social media ends up better than the advertisement or not.
Channel Partner Search
While looking for a channel partner, you must keep in mind that the channel partner should fit on three levels:
- Strategic – Working with you should add value to them and should fit in their strategy as well. It should be important for them to work with you as a potential partner.
- Technical – They should be in the adequate market segment, and have the adequate knowledge, capacity, and network to handle or sell your products or services.
- Cultural – The companies should preferably have a similar background, view on how to deliver value, and way of doing business.
The Bottom Line
Global marketing strategies have a lot to deal with. One of these is global distribution strategies. These strategies involve some basic steps, checks, and balances to take care of. We have discussed the most important yet basic steps to keep in mind while planning to distribute your products or services to the global market.
Follow these steps to get the most out of your business.
