International Marketing Channels Chapter 17 Matakuliah: J0474 International Marketing Tahun : 2009

Bina Nusantara University 3 Learning Outcome Channel of Distribution Structures. Distribution Patterns Alternative Middleman Choices. Factors Affecting Choice of Channels. Locating, Selecting, and Motivating Channel Members.

Bina Nusantara University 4 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

Bina Nusantara University 5 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.

Bina Nusantara University 6 Channel of Distribution Structures Trends : from traditional to modern channel structures Multinational marketers traditional Door to door selling hypermarketsCatalog selling FedEx/UPSE-commerceVirtual supermarket modern

Bina Nusantara University 7 Distribution Patterns General Patterns Middlemen services Line breadth Costs and margin Channel length Nonexistent channels Blocked channels stocking Power and competition

Bina Nusantara University 8 Distribution Patterns Retail Patterns Size Patterns Direct marketing Resistance to change

Bina Nusantara University 9 Alternative Middleman Choices Domestic producer or marketer sells to or through Open distribution via domestic wholesale middlemen Export management company or company sales force Exporter Importer Foreign agent or merchant wholesalers Foreign retailer Foreign consumer

Bina Nusantara University 10 Alternative Middleman Choices Home-Country Middlemen Manufacturing’ Retail stores Global retailers Complementary marketers Export Management Companies Manufacturer’s Export agent Trading Companies Selling Groups Home-Country brokers Buying Offices Webb- Pomerene Export Associations Foreign Sales Corporation Export Merchants

Bina Nusantara University 11 Alternative Middleman Choices Foreign-Country Middlemen Distributors Import Jobbers, Wholesalers, Retailers Managing Agents And Compradors Foreign-Country Brokers Manufacturer’s Representatives Dealers

Bina Nusantara University 12 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 the Development of international distribution.. 4. Identify control, length of channels, terms of sale, and Channel ownership.

Bina Nusantara University 13 Factors Affecting Choice of Channels 1.Cost 2.Capital Requirements 3.Control 4.Coverage 5.Character 6.Continuity Channel of Distribution Strategy (the six-C)

Bina Nusantara University 14 Locating, Selecting, and Motivating Channel Members. Locating Middlemen Selecting MiddlemenMotivating Middlemen Terminating MiddlemenControlling Middlemen

Bina Nusantara University 15 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.