Chapter 12 Channels of Distribution. Chapter Outline Direct and Indirect Selling Channels Types of Intermediaries: Direct Channel Types of Intermediaries:

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Presentation transcript:

Chapter 12 Channels of Distribution

Chapter Outline Direct and Indirect Selling Channels Types of Intermediaries: Direct Channel Types of Intermediaries: Indirect Channel Channel Development Channel Adaptation Channel Decisions

Chapter Outline Determinants of Channel Types -Legal Requirements -Product Image -Product Characteristics -Middlemen's Loyalty and Conflict -Local Customs -Power and Coercion -Control

Chapter Outline Distribution in Japan Selection of Channel Members Representation Agreement and Termination Black Market Gray Market Distribution of Services

Direct & Indirect Selling Channels INDIRECT SELLING CHANNELS - selling through home-country intermediaries - simple and inexpensive - lack of marketing control

Direct & Indirect Selling Channels DIRECT SELLING CHANNELS - direct contact with overseas intermediaries or consumers - requiring more time and cost - better control

Agent vs. Merchant taking possession vs. taking title (ownership)

Agent may or may not take possession never taking title compensation: commission more difficult to terminate relationships

Merchant may or may not take possession always taking title compensation: profit/loss easier to terminate relationships

Types of Intermediaries: Direct Channel Foreign Distributor Foreign Retailer State-Controlled Trading Company End User

Types of Intermediaries: Indirect Channel Export Broker Manufacturer's Export Agent or Sales Representative Export Management Company (EMC) Cooperative Exporter Purchasing/Buying Agent Country-Controlled Buying Agent

Types of Intermediaries: Indirect Channel Resident Buyer Export Merchant Export Drop Shipper Export Distributor Trading Company

Determinants of Channel Types Legal Requirements Product Image Product Characteristics Middlemen's Loyalty and Conflict Local Customs Power and Coercion Control

Representation Agreement and Termination paying attention to agency termination laws having agreements in writing avoiding evergreen contract

Gray Market Causes Legal Dimension Ethical Dimension Product Quality Manufacturers' Marketing Strategies