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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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In the section of the channels of distribution, we are explaining the choice of foreign market entry, who the market intermediaries are and at last some information about the channels of distribution.

7.1 Mode of foreign market entry

The method of foreign market entry is direct export through a distributor.  

Possible methods of indirect exportation are piggy banking and Business 2 Business (B2B). Despite these being good possibilities it would be better to go for a direct method of distribution. This way the company has more influence on marketing and promotional strategies and can make sure that the brand image remains intact. Which can't be guaranteed when using an indirect export method such as piggy – banking and B2B (Ghauri P. et al. 2010)   

7.2 Market intermediaries

In the process from the Belfast Distillery Company to the customer, there are different intermediaries which has to be dealt with. Therefore some elaboration about who they are and why they are the best option.

7.2.1 Mode selection

During the research for an appropriate wholesaler or distributor, we have found out that the Australian market is dominated by Wesfarmers and Woolworths(national Australia Bank Limited 2014).

Woolworths has control in different areas such as supermarkets, masters home improvements and Woolworths liquor group (Woolworths Limited 2012 A).

Woolworths liquor group consist out of Dan murphy's, BWS, cellarmasters and Langtons. Cellarmasters and Langtons is concentrating on wines and the other stores are selling the product at low price. So, looking more detailed in the Woolworths liquor group we have established that none of the stores are suitable for the Titanic Whiskey (Woolworths Limited 2012 b).

Wesfarmers has also control in different areas such insurances, home improvements and office supplies and Coles (Wesfarmers Limited 2013 b).

Coles is the liquor group, owned by Wesfarmers. Within Coles there are different group and one the group is Coles Liquor. Liquorland is targeting the product at low prices, Vintage cellars is concentrating on fine wines and First Choice Liquor wants to have quality first. The best option will be to partner up with First Choice Liquor (Wesfarmers Limited 2013 b).

7.2.2 Distributor

Coles has been a major player in the Australian packaged alcohol sale market for years.  Is it the distributor of the 3 large liquor chains; Liquor land, First Choice Liquor and Vintage cellars as mentioned before. Where Liquor Land is the largest with over 600 stores throughout Australia. (Coles Logistics 2013)

Coles takes responsibility of the product on arrival in Australia, where they will transport the product to a warehouse for later transport to the dealers.

Coles is a branch of the large distributor Wesfarmers, since they purchased the company in 2007 (Wesfarmers limited 2014 a).Wesfarmers currently possesses a 37% market share and around 755 stores, out of which 75 are liquor store from the chain; First Choice Liquor. Its main competitor is Woolworths which posses a 43% market share (Australian market channels 2014).

7.2.3 Dealer

The dealer First Choice Liquor is situated all over Australia with around 75 stores and at least 4 stores in all towns selected for the market entry. (First Choice Liquor 2014). Besides the wide coverage of First Choice Liquor they also have a great reputation. In a survey conducted around a year ago 63% of liquor buyers stated that First Choice Liquor has ‘the best value' (Roy Morgan 2013).

7.3 Channels of distribution

The shipping company will do the main transport; the goods will be transported on pallets of Australian standard. The goods will depart from the port in Belfast, Ireland for a 44 day journey to port of Sydney (SearRates Lp. 2014), Australia.   

The company Coles will take over the transport from the port. Coles picks the products up from all their suppliers and transport these to warehouses all over Australia. The warehouse that the first shipments will to go is located at 10 Roberts Rd., Eastern Creek (Coles Logistics 2013).  

After the products have been arrived at the warehouse, Coles will transport the product to the store in the Melbourne, Canberra and Sydney.  

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