Distribution Rights

Edge2Edge Global Distribution Strategy A critical element of Edge2Edge Global Investments marketing mix is its distribution strategy and the means it chooses for delivering the product to the consumer. The way the product is delivered is determined by the Edge2Edge Global Investment's entry strategy. Below we use a typical distribution system to explain how its structure varies between countries, and how distribution strategies vary from country to country. For more information on how to obtain marketing, manufacturing and distribution rights, complete the form at the bottom of the page.
Figure 1: Typical Distribution System Figure1	A Typical Edge2Edge Distribution System. Figure 1 - illustrates a typical distribution system consisting of a channel that includes a wholesale distributor (Owner of marketing rights for a specific Country or Region) and a retail distributor (a Distributor within the country or region who obtained Distribution rights from E2E Global or the designated Wholesaler). If Edge2Edge Global manufactures the product in the particular country, it sells directly to the wholesaler. The same options are available to manufacturers outside the country. Plus, E2E Global may decide to sell to an import agent, who then deals with the wholesale distributor, the retail distributor, or the consumer. The factors that determine the firms' choice of channel are considered later in this section. The three main differences between distribution systems are retail concentration, channel length, and channel exclusivity.
Differences between Countries Retail Concentration In some countries the market is very concentrated, but it is fragmented in others. In a concentrated system, a few wholesale distributors supply most of the market. A fragmented system is one in which there are more than one Wholesaler and many retail distributors, none of which has a major share of the market. For example in the USA, marketing rights might be sold per State or City, instead of the entire region. Many of the differences in concentrated countries are rooted in history and tradition. In the United States, the importance of the automobile and the relative youth of many urban areas have resulted in a direct distribution system centered on large wholesalers or drop shippers through which people can order and distribute. This has facilitated system concentration. Japans' much greater population density, together with the large number of urban centers that grew up before the automobile, have yielded a more fragmented retail system of many small distributors that serve local neighborhoods and from which people frequently purchase. In addition, the Japanese legal system protects individual retail distributors. Individual retail distributor can block the establishment of a large wholesaler by petitioning their local government. There is a tendency for greater retail and distribution concentration in developed countries. Three factors that contribute to this are the increase in car ownership, number of people working from home, and the number of two-income households. All of these factors have changed distribution channels and facilitated the growth of a larger number of independent distributors or multilevel marketing systems.
Channel Length Channel length refers to the number of intermediaries between the producer, manufacturer, and the consumer. If the producer sells directly to the consumer, the channel is very short. If the producer sells through an import agent, a wholesale Distributor, and an individual retail distributor, then a long channel exists. The choice of a short or long channel is primarily a strategic decision for the firm holding the manufacturing and marketing rights. However, some countries have longer distribution channels than others. The most important determinant of channel length is the degree to which the distribution system is fragmented. Fragmented distribution systems tend to promote the growth of wholesale Distributors to serve more retail Distributors, which then lengthens channels. The more fragmented the distribution system, the more expensive it is for a firm to make contact with each individual distributor. Imagine a Wholesaler that sells the Pack in a country where there are 50,000 single distributors. To sell directly to the retail distributor, the firm would have to build a huge sales force. This would be very expensive, particularly since each sales call would yield a very small order. But suppose there are 50 wholesalers/drop shippers in the country who supply retail distributors not only with the pack but also with all other products from Edge2Edge Global. Because these wholesalers carry a wide range of products, they get bigger orders with each sales call, making it worthwhile for them to deal directly with the retail distributors. It therefore makes economic sense for the manufacturer to sell to the wholesalers and the wholesalers to deal with the retail distributors. Because of such factors, countries with fragmented retail systems also tend to have long channels of distribution. The classic example is Japan, where there are often two or three layers of wholesalers between the firm and retail distributors. The channels are much shorter in countries such as Great Britain, Germany, and the United States because the distribution system is far more concentrated. When the distribution sector is very concentrated, it makes sense for the manufacturing firm to deal directly with retail distributors, cutting out wholesalers. A relatively small sales force is required to deal with a concentrated retail sector, and the orders generated from each sales call can be large. Such circumstances tend to prevail in the United States, where large manufacturers sell directly to individual distributors rather than going through wholesale distributors. This means that in countries like this, Manufacturing and Marketing rights of the E2E products are combined in one license.
Channel Exclusivity An exclusive distribution channel is one that is difficult for outsiders to access. The ISCP is exclusively classified in its own category as the first natural antiretroviral, and therefore for companies in their search for profits, the retail distributors are unable to violate the old norms of exclusivity.
Choosing a Distribution Strategy A choice of distribution strategy determines which channel the firm will use to reach potential consumers. Should the firm try to sell directly to the consumer or should it go through retail distributors or a MLM network (mostly a choice for Online marketing); should it appoint a sub-wholesaler, or use an import agent. The optimal strategy is determined by the relative costs and benefits of each alternative. The relative costs and benefits of each alternative vary from country to country, they depend on the three factors that we have just discussed: retail concentration, channel length, and channel exclusivity. Because each intermediary in a channel adds its own markup to the products, there is generally a critical link between channel length, the final selling price, and the firms' profit margin. The longer a channel, the greater is the aggregate markup, and the higher the price that consumers are charged for the final product. To ensure that prices do not get too high due to mark ups by multiple intermediaries, a firm might be forced to operate with lower profit margins. Thus, if price is an important competitive weapon, and if the firm does not want to squeeze its profit margins too thin, other things being equal, the firm would prefer to use a shorter channel. However, the benefits of using a longer channel often outweigh these drawbacks. As we have seen, one benefit of a longer channel is that it cuts selling costs when the distribution sector is fragmented. Thus, it makes sense for an international business to use longer channels in countries where the retail sector is fragmented and shorter channels in countries where the retail sector is concentrated. Another benefit of using a longer channel is market access; the ability to enter an exclusive channel (people living with Aids or the donor market only). Import agents may have long-term relationships with drop shippers, retail distributors or MLM Groups, and/or important donors and thus be better able to win orders and get access to a distribution system. Similarly, wholesale distributors may have long standing relationships with retail distributors or existing networks and be better able to persuade them to carry the Edge2Edge product than the firm itself would. Import agents are limited to appointed wholesale distributors; any firm with a strong local reputation could become a sub wholesale or retail distributor. For example, to break down channel exclusivity and gain greater access to the Japanese market, in 1991 and 1992, Apple computers signed distribution agreements with five large Japanese firms including business equipment giant Brother Industries, stationery leader Kokuyo, Mitsubishi, Sharp, and Minolta. These firms used their own long-established distribution relationships with consumers, retailers, and wholesalers to push Apple Macintosh computers through the Japanese distribution system. As a result, Apples' share of the Japanese market increased from less than 1% in 1988 to 6% in 1991, and 13% by 1994. If such an arrangement is not possible, the firm holding the manufacturing and marketing rights might want to consider other, less traditional alternatives to gain market access. Frustrated by channel exclusivity in Japan, some foreign manufacturers of consumer goods have attempted to sell directly to Japanese consumers using direct mail and catalogs. REI, a retailer of outdoor clothing and equipment based in the north-western United States had trouble persuading Japanese wholesalers and retailers to carry its products. So instead it began a direct-mail campaign in Japan that is proving to be very successful. In the United States MLM distribution channels, especially when it comes to health orientated products are still popular.
Conclusion The distribution of the Egde2Edge Global range of products, including the Imuniti Nutritional Supplement Combo pack, varies from country to country. Marketing and manufacturing rights will preferably be sold to one firm, who then on own discretion will choose the channel of distribution. In South Africa for instance Imuniti Holdings holds a non exclusive Manufacturing License but has an exclusive Marketing Right to serve the region. To obtain more information on Manufacturing, Marketing and Distribution Rights, complete the from below and submit.
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