1. International Marketing: Chapter 15 Key Concepts
Japanese Distribution System & Four Characteristics
High density of middlemen
High level of channel control
Unique business philosophy
Large-scale retail store law
Six factors affecting channel choices
Cost
Capital
Control
Coverage
Character
Continuity
Home-country middlemen
Foreign country middlemen
Government-affiliated middlemen
Challenges of Channel Development
Internet-the most important international distribution trend

2. Channels of Distribution
Each country market has a unique distribution structure
Distribution process includes:
Physical handling and distribution of goods
Passage of ownership
Buying and selling negotiations
between producers and middlemen
between middlemen and customers
15-2

3. Channels of Distribution in Developing Countries
Traditional, import-oriented channels
Importer-wholesaler performs most marketing functions
Limited supply of products is sold at high prices to affluent customers
Demand exceeds supply
Mass distribution not necessary
Implications for foreign marketers:
Local distribution systems
Distribution system not integrated nationally
Nonexistent or underdeveloped marketing infrastructure
15-3

4. Primary Characteristics of
Japanese Distribution Systems
High density of middlemen
High level of channel control
Unique business philosophy
Large-scale retail store law

5. Retail Patterns of Distribution Greater Diversity Than Wholesaling
Size patterns
Great diversity in size
No adequate way to reach small retailers
Large retailers growing in developing countries
Direct marketing
By mail, telephone, catalogs, or door-to-door
Works well in affluent markets with underdeveloped channels
Amway & Avon expanding dramatically
Resistance to change
Many laws exist to protect the entrenched

6. Alternative Middleman Choices
Seller must exert influence over two sets of channels
home country
foreign market country
Agent middlemen
represent the principal rather than themselves
work on commission
Merchant middlemen
take title to the goods and buy and sell on their own account
tend to be less controllable

7. Home-Country Middlemen
Manufacturer’s retail stores (Disney, etc.)
Global retailers (Wal-Mart, IKEA, etc.)
Export management companies (EMC)
Trading companies
U.S. export trading companies
Complementary marketers
Manufacturer’s export agent
Webb-Pomerene Export Associations
Foreign Sales Corporation
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8. Foreign-Country Middlemen
Variety in most countries is similar to U.S.
Dealing directly can be advantageous
shorter channels
moves manufacturer closer to the market
More important foreign-country middlemen:
manufacturer’s representatives
foreign distributors
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9. Government-Affiliated Middlemen
Marketers must deal with foreign governments
Government purchasing offices
Procure products & services for the government’s own use
Work at federal, regional, and local levels
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10. Factors Affecting Choice of Channels
International marketers need a clear understanding of market characteristics and must have established operating policies before beginning the selection of channel middlemen
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11. Factors Affecting Channel Choices
Cost
Capital
Control
Coverage
Character
Continuity

12. Challenges of Channel Development
Locating Middlemen
Selecting Middlemen
Motivating Middlemen
Terminating Middlemen
Controlling Middlemen

13. Internet: The Most Important Global Distribution Trend
15-13

14. Concerns for International E-Vendors
Culture
Product adaptation
Local contact
Payment
Delivery
15-14