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    International Distribution Channel

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    oureducation.in
    The concept of international distribution channels is the international distribution channels the flow of goods in international marketing channels. It is by the manufacturer to foreign consumers (users) through which the channel transfer, but also refers to the manufacturer after (or without) the transfer of international intermediaries to the final foreign consumers (users) of all market structure. International distribution channels, compared with the difference between the domestic distribution channel structure of the Department is not the choice of channels in the decision-making that affect changes in market factors; the same time, the international distribution channel consists of two parts, first enterprises to enter international market channel through which channels between countries; second of the domestic distribution channels.

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    International Distribution Channel

    Uploaded by

    oureducation.in
    3K views24 pages
    The concept of international distribution channels is the international distribution channels the flow of goods in international marketing channels. It is by the manufacturer to foreign consumers (users) through which the channel transfer, but also refers to the manufacturer after (or without) the transfer of international intermediaries to the final foreign consumers (users) of all market structure. International distribution channels, compared with the difference between the domestic distribution channel structure of the Department is not the choice of channels in the decision-making that affect changes in market factors; the same time, the international distribution channel consists of two parts, first enterprises to enter international market channel through which channels between countries; second of the domestic distribution channels.

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    The concept of international distribution channels is the international distribution channels the flow of goods in international marketing channels. It is by the manufacturer to foreign consumers (users) through which the channel transfer, but also refers to the manufacturer after (or without) the transfer of international intermediaries to the final foreign consumers (users) of all market structure. International distribution channels, compared with the difference between the domestic distribution channel structure of the Department is not the choice of channels in the decision-making that affect changes in market factors; the same time, the international distribution channel consists of two parts, first enterprises to enter international market channel through which channels between countries; second of the domestic distribution channels.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views24 pages

    International Distribution Channel

    Uploaded by

    oureducation.in
    The concept of international distribution channels is the international distribution channels the flow of goods in international marketing channels. It is by the manufacturer to foreign consumers (users) through which the channel transfer, but also refers to the manufacturer after (or without) the transfer of international intermediaries to the final foreign consumers (users) of all market structure. International distribution channels, compared with the difference between the domestic distribution channel structure of the Department is not the choice of channels in the decision-making that affect changes in market factors; the same time, the international distribution channel consists of two parts, first enterprises to enter international market channel through which channels between countries; second of the domestic distribution channels.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 24

    INTERNATIONAL DISTRIBUTION CHANNEL

    7/18/2013

    Distribution channel: system of

    marketing institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a Marketing channel.
    2 7/18/2013

    7/18/2013

    The Role of Distribution Activities in Marketing


    Distribution Physically moving products and establishing intermediary relationships to support such movement.
    Physical Distribution (Logistics) The activities of distribution involved in the physical relocation of products. Channel of Distribution The system of intermediaries (business relationships) established to guide the movement of a product.

    7/18/2013

    Functions of Intermediaries
    Perform the marketing function better.
    Provide efficient distribution of the product. Breaking bulk sell to customers in smaller

    quantities. Assorting bringing together similar lines of goods.


    Shifting risks. Merchant middlemen - take title to the goods

    distributed. Agents/brokers - distribute goods only.

    7/18/2013

    Types of Distribution Channels


    Direct channel A distribution system without intermediaries Indirect channel

    A distribution system with one or more

    intermediaries.
    Dual distribution A distribution system with more than one channel.

    7/18/2013

    Alternative Channels of Distributio n

    7/18/2013

    Dell Dell Computer: A Direct Seller of Computers

    7/18/2013

    Global Perspective
    Global Perspective: 500 Million Sticks of Doublemint Today Billions Tomorrow
    Most challenging aspect of selling the gum for

    Doublemint is how to get the gum through Chinas distribution channels: Mastering the distribution system is the single most important challenge of Chinas economic revolution Finding reliable distributors is a challenge Many are state owned and have little incentive to push one brand over another Doublemint gum found a way to distribute their products effectively thru China 7/18/2013 Note: Doublemint has a 91% market share in

    Selection of channel
    The selection of distribution is affected by many of factors, which play significant role while choosing the channel for distribution. It may include the buying pattern of consumer, type of the product is perishable, or auto mobile, weight and bulk and it also depends on the company's resources.

    The main affecting factors are following:


    Organization objectives Mode of Transport Type of product Nature and extent of market Existing channel for comparable product Buying habit of customers 10 Channel Availability

    7/18/2013

    Alternative Middlemen Choices


    Classification of Middlemen Agent Middlemen
    Do not take title to the goods distributed
    Less risk (manufacturer assumes risk)

    Merchant Middlemen
    Take title of goods being distributed (manufactures have less control) Motivated by profit, tend to be less loyal to one brand

    Alternative Types of Middlemen: 1. Home-Country Middlemen


    2. Foreign-Country Middlemen

    11

    7/18/2013

    International Channel-of-Distribution Alternatives


    Home Country Foreign Country
    The foreign marketer or producer sells to or through Domestic producer or marketer sells to or through Foreign consumer

    Open distribution via domestic wholesale middlemen

    Exporter

    Importer

    Foreign agent or merchant wholesalers

    Foreign retailers

    Export management company or company sales force

    12

    7/18/2013

    Alternative Middlemen Choices Home Country


    Theyre located in Firms own country. Provide marketing services from a domestic base. Employed by marketers with less international sales volume and inexperienced with foreign markets.
    Global Retailers
    Export Management Companies Manufacturers Export Agent Home-Country Brokers Export Merchants Piggy Back
    13 7/18/2013

    HOME COUNTRY MIDDLEMEN


    GLOBAL RETAILERS
    WAL-MART, ROEBUCK are booming domestic middlemen for international middlemen. Companies adhering to the laid requirements gain access to Overseas markets of Argentina, Brazil, canada, etc.

    EXPORT MANAGEMENT COMPANIES


    They work under name of manufacturers and function as a low cost, independent marketing department. For firms with relatively small international volume or which are unwilling to involve personnel in international function. A washington DC company marketing 10 US Orthopedics manufacturer products worldwide.

    14

    7/18/2013

    MANUFACTURERS EXPORT AGENT An agent firm provides selling service for manufacturers. Operates on a straight commission basis and covers only one or two markets. Provides services similar to EMCs and does business in their own name. HOME COUNTRY BROKERS They perform low cost agent services. Perform function of bringing bringing buyers and sellers together. They specialise in one or more particular commodity and for the same maintain contact with major producers and 7/18/2013 15 purchasers.

    EXPORT MERCHANTS Intermediaries who take title to and possession of the products they carry Responsible for shipping and marketing the products in the target market Carry competing brands Examples: export jobber, who carries commodity goods, but does not take physical possession of the goods.
    PIGGYBACK MARKETING channel innovation that has grown in popularity One manufacturer distributes product by utilizing another companys distribution channel Requires that the combined product lines be complementary and appeal to the same customer
    16 7/18/2013

    Alternative Middlemen Choices Foreign Country


    Distributors Foreign Country Brokers Managing Agents Dealers Wholesalers and

    Retailers

    17

    7/18/2013

    Distributor

    Is a merchant middlemen with close cooperation to the manufacturer Functions are- control over prices, inventories, servicing.
    Agent

    Conducts business within a foreign nation under contract arrangement with parent country. Compensation is on the basis of cost plus a specified % of profits of the managed company.
    Brokers

    Foreign brokers are part of small brokerage firms operating in a country. Function in good continuing relationships with customers and speedy market coverage at low costs
    18 7/18/2013

    Dealers
    Independent merchant middlemen with the supplier company having equity in it. Ex- Massey fergusson and caterpillar tractor company

    Wholesalers and Retailers


    Engage in direct importing for their own outlets and for redistribution to smaller middlemen. Large retailers perform wholesaling to local shops and dealers.

    19

    7/18/2013

    Factors that affect choice of Channels


    The 6 Cs need to be considered:
    1. Cost Investment cost of developing channel; and cost of maintaining channel

    2. Capital requirements How much capital is required


    3. Control How much control is desired Example: companys own sales force exerts most control vs. using middlemen

    20

    7/18/2013

    Factors that affect choice of Channels (Cont.)


    The 6 Cs need to be considered (cont):
    4. Coverage Full market coverage, or targeted coverage to densely populated areas
    5. Character Channel of the distributions system must meet the character of the company seeking to do business 6. Continuity Will there be longevity issues How to build loyalty with middlemen is much more difficult than a companys own sales force

    21

    7/18/2013

    Locating, Selecting, Motivating and Terminating Middlemen


    Factors affecting locating middlemen: Things to look for:
    Financial stability, managerial stability, productivity, reputation, etc.

    Sources to use: U.S. Dept. of Commerce, foreign consulates, commercially published directories

    Selecting Middlemen Two steps


    1. Screening 2. Developing the Agreement
    22 7/18/2013

    Locating, Selecting, Motivating and Terminating Middlemen (Cont.)


    Motivating Middlemen Common methods used to motivate middlemen:
    Financial rewards, psychological rewards, communications, company

    support and corporate rapport

    Terminating Middlemen Must consider things such as:


    Legal protection Control over middlemen

    Controlling Middlemen
    Control over the system (distribution network) Control over the middlemen

    23

    Volume of sales, market coverage, services offered, pricing, advertisement, payment of bills and profitability. 7/18/2013

    24

    7/18/2013

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