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L06 - Global Distribution Channels

This document discusses global distribution channels for marketing, including direct and indirect selling options. Direct channels involve working directly with overseas partners and allow for more control, while indirect channels through home country partners are simpler and cheaper but with less control. It also differentiates between agent and merchant relationships, and describes various types of intermediaries for direct and indirect channels. Key factors that affect channel choice include target markets, goals, financial commitments, control levels, and terms.

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Shubika Sharma
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18 views13 pages

L06 - Global Distribution Channels

This document discusses global distribution channels for marketing, including direct and indirect selling options. Direct channels involve working directly with overseas partners and allow for more control, while indirect channels through home country partners are simpler and cheaper but with less control. It also differentiates between agent and merchant relationships, and describes various types of intermediaries for direct and indirect channels. Key factors that affect channel choice include target markets, goals, financial commitments, control levels, and terms.

Uploaded by

Shubika Sharma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Distribution Channels

Global Marketing
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)
 Agents
 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
Channel Development
 suitability of a particular channel depends greatly
upon the country in which it is used
 does not necessarily mean that each country requires
a unique channel.
 However, a company may find that a country
classification system is useful, a system that can be
used to determine how the distribution strategy
should be set up from one group of countries to
another

Factors Affecting Choice of Channels
 Identify specific target markets within and
across countries.
 Specify marketing goals in terms of volume,
market share, and profit margin requirements.
 Specify financial and personnel commitments
to the development of international
distribution.
 Identify control, length of channels, terms of
sale, and channel ownership.
Locating, Selecting, and Motivating Channel
Members
 Criteria for Location
(1) productivity or volume,
(2) financial strength,
(3) managerial stability and capability, and
(4) the nature and reputation of the business.
 Emphasis is usually placed on either the actual
or potential productivity of the middleman
Determinants of Channel Types
 Cost and Capital Requirements
 Control
 Coverage
 Continuity
 Legal Requirements
 Middlemen's Loyalty and Conflict
 Local Customs
 Power and Coercion
Gray Market
 Causes
 Legal Dimension
 Ethical Dimension
 Product Quality
 Manufacturers' Marketing Strategies

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