International Marketing ChannelsChapter 17

Matakuliah : J0474 International MarketingTahun : 2009

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Learning Outcome

• Channel of Distribution Structures.• Distribution Patterns• Alternative Middleman Choices.• Factors Affecting Choice of Channels.• Locating, Selecting, and Motivating Channel Members.

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Channel of Distribution Structures

Import-Oriented Distribution Structure

In an import-oriented or traditional distribution structure;An importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

Each country market has a distribution structure through which goods pass from producer to user. Within this structure are a variety of middlemen whose customary functions, activities, and services reflect exiting competition, market characteristic, tradition and economic development

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Channel of Distribution Structures

Japanese Distribution Structure

A structure dominated by many small middlemen dealing with many small retailers,

2. Channel control by manufacturers

3 . A business philosophy shaped by a unique culture

4. Laws that protect the foundation of the system- the small retailer.

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Channel of Distribution Structures

Trends : from traditional to modern channel structures

Multinationalmarketers

traditio

nal

Door to door selling hypermarkets Catalog selling

FedEx/UPSE-commerceVirtual supermarket

modern

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Distribution Patterns

General Patterns

Middlemenservices

Line breadth

Costs and margin

Channellength

Nonexistentchannels

Blockedchannels

stocking

Power andcompetition

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Distribution Patterns

Retail Patterns

Size PatternsDirect

marketingResistance to

change

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Alternative Middleman Choices

Domesticproducer

or marketersells to orthrough

Open distributionvia domestic

wholesalemiddlemen

Export managementcompany or

company sales force

Exporter Importer

Foreign agent ormerchant

wholesalers

Foreignretailer

Foreignconsumer

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Alternative Middleman Choices

Home-Country Middlemen

Manufacturing’Retail stores

Global retailers

Complementarymarketers

Export Management Companies

Manufacturer’sExport agent

TradingCompanies

Selling GroupsHome-Country

brokersBuying Offices

Webb- PomereneExport

Associations

Foreign Sales

Corporation

Export Merchants

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Alternative Middleman Choices

Foreign-Country Middlemen

Distributors

ImportJobbers,

Wholesalers,Retailers

Managing Agents

AndCompradors

Foreign-CountryBrokers

Manufacturer’sRepresentatives

Dealers

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Factors Affecting Choice of Channels

1. Identify specific target markets within and across country.

2. Specify marketing goals in terms of volume, market,Share, and profit margin requirements.

3. Specify financial and personnel commitments to theDevelopment of international distribution..

4. Identify control, length of channels, terms of sale, andChannel ownership.

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Factors Affecting Choice of Channels

1. Cost2. Capital Requirements3. Control4. Coverage5. Character6. Continuity

Channel of Distribution Strategy(the six-C)

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Locating, Selecting, and Motivating Channel Members.

Locating Middlemen Selecting Middlemen Motivating Middlemen

Terminating Middlemen Controlling Middlemen

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Summary

• The international marketer has a broad range of alternatives for developing an economical, efficient, high-volume international distribution system.

• Although international middlemen have become more numerous, more reliable, and more sophisticated within the past decade, traditional channels are being challenged by internet, which is rapidly becoming an important alternative channel to many market segments. Such growth and development offer an ever wider of possibilities for entering foreign markets.