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Describe how distribution and partnering may evolve(演变) over time as market coverage and penetration grows

Should things progress with a positive trend, one of two things is likely to come up: 1. The distribution deal may be renegotiated in favor of one of the two parties (usually the brand as they will likely have other offers of partnership at a lower rate than current partner) 2. The distribution partner may seek regional ownership and offer to purchase a stake. 3. The brand may decide to cancel the partnership and seek to own the channel end to end. 4. The Distributor may launch its own regional brand and end the partnership as owning the channel end to end is far more lucrative for them.

In China, all three of these situations have happened. The latest trend with luxury goods has usually resulted in 3 or 4. In terms of many of the French based luxury items, they have purchased the partner out of the relationship and that partner has used the termination funds to launch their own regional brand using the knowledge accumulated during the partnership.

Conversely, should things go poorly on the partnership, the following situations may arise: 1. The brand seeks a new partner to revitalize the brand regionally 2. The brand withdraws from the regional market 3. The brand may decide to cancel the partnership and seek to own the channel end to end.

Most established brands and distributors usually have clauses in their original agreements, which take these contingencies into account before the formal relationship begins. These may include specific payouts to terminate the partnerships in both positive and negative

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