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International Marketing Channels - Orana Case

In: Business and Management

Submitted By suiss13
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. ORANA uses both its own sales staff and independent distributors to increase retail sales in Vietnam. Discuss the advantages and disadvantages of this strategy. ORANA realized the huge opportunity in covering new market areas due to the increasing demand in Vietnam as an emerging market, many indications showed that annual sales has a potential growth rate of around 20%, due to the increasing purchasing power, the middle class is growing, and people are willing to try new products. Therefore ORANA wanted to take the opportunity of being a fast mover and expanded its distribution from Ho Chi Minh City (Saigon), to the central and northern parts of Vietnam, by starting direct sales through independent distributors instead of relying only on own sales staff.

Advantages:
- Increase market coverage: By penetrating new geographical areas, ORANA makes it easy for customers to find the product, to achieve spatial convenience and easy availability which is important for retailer sales, these convenient goods are for everyday use, and buyers will take what is on offer rather than search for favorite brand.
- Reduce liability of foreignness: National distributers are likely to have advantages over ORANA’s own sales staff, because they have important information and critical knowledge about their country’s: * Culture: A minimum of 9 different ethnic groups, with the majority of 86% Vietnamese, concentrated in center and northern parts (Map 3.1), a local expertise is required to handle the differentiation of products required and/or service output. * Language: Vietnam has many different spoken languages, not everybody speaks English, especially not in the rural areas, which will create language gaps that only a local can handle, and this can be very useful when a conversation with authorities is needed. * Geography, land scape: The southern part of…...

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