Factors Affecting Choice of Channels

1. Cost
2. Capital Requirements
3. Control
4. Coverage
5. Character
6. Continuity
Channel Management
Locating middlemen
Selecting middlemen
Screening
The agreement
Motivating middlemen
Terminating middlemen
Controlling middlemen
The Internet
E-commerce
Business-to-business (BSB) services
Consumer services
Consumer and industrial products
E-commerce is more developed in U.S.
than in rest of world
B2B enables companies to cut costs
Reduces procurement costs
Allows better supply-chain management
Makes possible tighter inventory control
Concern for E-vendors:
Culture
Adaptation
Local contact
Payment
Delivery
Promotion
Logistics
Logistics management is a total systems approach to the management of the distribution process
that includes all activities involved in physically moving raw material, in-process inventory, and
finished goods inventory from the point of origin to the point of use or consumption
The physical distribution system involves more than the physical movement in goods; it includes the
location of plants and warehousing, transportation mode, inventory quantities, and packing
Substantial savings can result from the systematic examination of logistics costs and the calculation
of total physical distribution costs
The concept behind physical distribution is the achievement of the optimum (lowest) system cost,
consistent with customer service objectives of the firm
One of the major benefits of the European Unions unification is the elimination of transportation
barriers among member countries
Summary
The international marketer has a broad range of alternatives for developing a distribution system
Three primary alternatives for using agent middlemen
Agent middlemen
Merchant middlemen
Government-affiliated middlemen
Channel structure varies
Nation to nation
Continent to continent
Information and advice are available relative to the structuring of international distribution systems
The Internet is challenging traditional channels, offering a wider range of possibilities for entering
foreign markets