International Marketing Channels Goal—getting the right product to the right place in the right quantities at the right time and at the right price Forging a reliable and aggressive distribution channel may be the most challenging international marketing task Every market contains a distribution network with many channel choices Competitive advantage will reside with the marketer best able to build the most efficient distribution channel

International Channel-of- Distribution Alternatives

Home-Country Middlemen Home-country middlemen (domestic middlemen) provide marketing services from a domestic base; assist in finding foreign markets for products made by local (domestic) manufacturers Frequently used types of domestic intermediaries: Manufacturers’ Retail Stores Global Retailers Export Management Companies Trading Companies U.S. Export Trading Companies Complementary Marketers Manufacturer’s Export AgentHome-Country Brokers Buying Offices Selling Groups Foreign Sales Corporation Export Merchants Export Jobbers Webb-Pomerene Export Associations

Types of Home-Country Middlemen Global Retailers –retailers with stores in many countries Export Management Company —an agent that functions as a low cost independent “marketing department” Trading Companies —firms that accumulate and distribute a wide variety of goods from many countries U.S. Export Trading Companies —joint ventures organized to handle export activities and share costs and risks Complementary Marketers —firms that export their goods and desire to take on additional products or lines from others Manufacturer's Export Agent —an individual or firm that covers a small area and does business under its own name

Foreign-Country Middlemen Middlemen located in foreign markets that seek goods from manufacturers outside their home country for importation and distribution in their home country Common Types of Foreign-Country Middlemen Manufacturer’s Representatives Distributors Foreign-Country Brokers Managing Agents/Compradors Dealers Import Jobbers, Wholesalers, and Retailers

Locating Middlemen Commercially published directories Foreign consulates Chamber-of-commerce groups located abroad Other manufacturers producing similar but noncompetitive goods Middlemen associations Business publications Management consultants U.S. Department of Commerce

Selecting Middlemen Screening Criteria Reputation Creditworthiness Markets served Products carried Number of stores Store size Screening Tools Personal Interviews Telephone Interviews Reference Checks Directory Information Questionnaire

Motivating Middlemen There is a clear correlation between a middleman’s motivation and sales volume Motivational Techniques Financial rewards/incentives Psychological rewards Frequent communications Company support Corporate rapport

E-commerce—expands or facilitates international distribution The Internet is an important distribution method for multinational companies E-commerce growth in international business-to-business marketing has outpaced growth in international consumer sales Important Considerations Cultural Preferences Adaptation (especially of language) Local contact information Payment form Delivery methods and terms Promotion regulations

Alternative Market Entry Strategies Licensing—you grant the right to a foreign manufacturer or distributor to legally use your patent, trademark, or process Franchising—you license a standard system of products and processes to a buyer (franchisee) in perpetuity for a fee Joint Ventures—two or more companies share in the cost of a business venture Consortia—a large number of partners pool their resources to operate a venture