Exam 10: Global Distribution Strategies

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Parallel distribution refers to the practice of selling products through multiple distribution channels, often resulting in the same product being sold at different prices in different markets. This can have a significant impact on global marketing firms, as it can lead to price disparities, channel conflicts, and brand dilution.

To mitigate the impact of parallel distribution on a global marketing firm, there are several strategic approaches that can be taken:

1. Price harmonization: One approach is to harmonize prices across different markets to minimize the impact of parallel distribution. This can involve setting a global pricing strategy that takes into account local market conditions and currency fluctuations, ensuring that prices are consistent across all distribution channels.

2. Channel management: Another approach is to carefully manage the distribution channels to minimize conflicts and ensure consistent branding and messaging. This can involve working closely with distributors and retailers to establish clear guidelines for pricing, promotions, and branding, as well as monitoring and enforcing these guidelines to maintain control over the distribution of the product.

3. Legal and regulatory measures: Global marketing firms can also take legal and regulatory measures to mitigate the impact of parallel distribution. This can involve implementing exclusive distribution agreements, enforcing intellectual property rights, and taking legal action against unauthorized distributors to protect the brand and maintain control over the distribution of the product.

By implementing these strategic approaches, global marketing firms can mitigate the impact of parallel distribution and maintain control over their brand, pricing, and distribution channels in different markets. This can help to ensure a consistent and cohesive global marketing strategy, while also protecting the brand and maximizing profitability.

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Keiretsu is a term used to describe a form of business organization in Japan where a group of companies, often with interlocking ownership and business relationships, work together for mutual benefit. These relationships can include cross-shareholding, joint ventures, and long-term partnerships.

The concept of keiretsu is important to firms interested in penetrating the Japanese market because it provides a framework for understanding the business landscape in Japan. By forming relationships with existing keiretsu members, foreign firms can gain access to distribution channels, suppliers, and potential business partners. This can be crucial for navigating the complex and often insular Japanese market, where trust and long-term relationships are highly valued.

Additionally, being part of a keiretsu can provide a level of stability and support for foreign firms entering the Japanese market. By aligning with established companies and leveraging their networks, foreign firms can benefit from the reputation and resources of the keiretsu members, which can help them gain credibility and market share in Japan.

Overall, the concept of keiretsu is important for firms interested in penetrating the Japanese market because it offers a strategic framework for building relationships and accessing resources that can be essential for success in this unique business environment.