Sizes in retail are similar to those that
CHANNEL-OF-DISTRIBUTION
STRUCTURES
All consumer and industrial
products eventually must go
through a distribution process.
Distribution of goods
The distribution process includes:
Transfer of ownership
Each country's market has a
distribution structure through
Purchase and sale negotiations
which goods pass from producer
to user.
intermediaries and customers.
Import-Oriented Distribution
Structure
In a traditional or import-oriented
distribution structure:
The importer controls a fixed
supply of goods
The marketing system is
developed around the philosophy
of selling a limited supply of
goods at high prices to a small
number of wealthy customers.
In the resulting seller's market
Market penetration and mass
distribution are not necessary
because demand exceeds supply.
Produced by: Liliana Ovando Pérez | Reference: Cateora, P.R., Gilly, M.C. y Graham, J.L. (2011) International Marketing. 15 ed. McGraw-Hill Irwin. (pp. 418 – 450)
Physical handling
of actual distribution patterns are
understood can the complexity of
(title)
between producers and
intermediaries and between
Japanese Distribution Structure
The Japanese distribution
structure is different enough from
its American or European
counterparts. So the Japanese
system has four distinctive
features:
Structure dominated by many
small intermediaries dealing with
many small retailers.
Channel control by manufacturers.
Business philosophy shaped by a
unique culture.
DISTRIBUTION PATTERNS
Only when the varied intricacies
the distribution task be
appreciated.
ALTERNATIVE MIDDLEMAN
CHOICES
The options range from taking
over all distribution activity to
relying on intermediaries for the
distribution of a product.
Trends: From Traditional to
Modern Channel Structures
Traditional channel structures are
giving way to new forms, new
alliances and new processes, so
they are all changing.
Laws that protect the basis of
the system: the small retailer
Retail predominate in wholesale, so there are
Size Patterns.
Patterns variations in size and number of retailers
per person that exist in some countries.
This method Mail
Direct consists of selling
Marketing. directly to the
Telephone
consumer through:
Door to Door
Resistance to
Change
All attempts to change
traditional ways are often
seen as threatening and
therefore there is resistance.
The channel process includes
all activities, starting with the
manufacturer and ending with
Once channel selection begins, it the end consumer.
is difficult to change, and if
inappropriate, future growth in
market share may be affected.
The seller must influence two
sets of channels: one in the
Home-Country Middlemen home country and the other in
the foreign market country.
Also known as domestic
intermediaries, they are An important distribution
those who provide channel for a large number
marketing services from a of manufacturers is the own
national base. retail store, or perhaps a
franchisee.
Manufacturers’
Retail Stores
 It is an important intermediary for Foreign-Country Middlemen The actual process of building channels
Export companies with a relatively small for international distribution is not easy,
Management international volume or those that CHANNEL MANAGEMENT and many companies have stopped their
Companies. are not willing to involve their own They can be agents or traders, efforts to develop international markets
staff in the international function they can be associated with the due to their inability to build a
parent company to varying satisfactory channel system.
degrees, or they can be hired
They are those that accumulate, temporarily for special purposes.
Trading
transport and distribute goods from
Companies. The selected distribution channel
many countries.
GovernmentAffi liated system must be adjusted to the Locating Middlemen
Character
Middlemen character of the company and the
The Export Trading Companies markets in which it operates.
U.S. Export
Trading (ETC) Act allows producers of Products, services, and Selecting Middlemen
Companies. similar products to form export commodities for government use
trading companies. Coverage can be evaluated by
are procured through government Coverage
geographic segments, market
purchasing offices at the federal,
segments, or both. Motivating Middlemen
regional, and local levels.
It is a collaboration agreement
Complementar
between two companies from the
y Marketers. FACTORS AFFECTING CHOICE The two types of canal cost are: Terminating Middlemen
same country.
OF CHANNELS Cost the capital or investment cost of
developing the canal and the
It is an individual broker or broker ongoing cost of maintaining it. Controlling Middlemen
Manufacturer’s The following points should be
Export Agent. company that provides a sales addressed prior to the selection
service to manufacturers. process: The critical elements are the capital
Capital requirements and cash flow
1. Identify specific target markets Requirement patterns associated with the use of
It is a form of group export, they within and across countries. s a particular type of intermediary.
Webb- cannot participate in other
Pomerene international agreements that would
Export reduce competition in the United 2. Specify marketing goals in The more involved a company is
Associations. States terms of volume, market share, Control with distribution, the more control it
and profit margin requirements. exercises.

It is a sales corporation established

Foreign Sales in a foreign country that can obtain 3. Specify financial and personnel 4. Identify control, length of
Corporation an exemption from corporate tax of commitments to the development channels, terms of sale, and
a portion of the profits generated by of international distribution. channel ownership.
the sale or lease of export property

Produced by: Liliana Ovando Pérez | Reference: Cateora, P.R., Gilly, M.C. y Graham, J.L. (2011) International Marketing. 15 ed. McGraw-Hill Irwin. (pp. 418 – 450)
 THE INTERNET
It is an important distribution
method for multinational
companies and a source of
products for businesses and
consumers.
LOGISTICS
The typical approach to the
physical movement of goods is
the selection of a reliable mode
of transport that ensures the safe
arrival of goods in a reasonable
time for a reasonable cost of
transport.
As a business goes global, such
a product movement solution
could prove costly and highly
inefficient for both the seller and
the buyer.
Produced by: Liliana Ovando Pérez | Reference: Cateora, P.R., Gilly, M.C. y Graham, J.L. (2011) International Marketing. 15 ed. McGraw-Hill Irwin. (pp. 418 – 450)
e-commerce
The website and product must be culturally neutral or tailored
Culture
to the uniqueness of a market because culture does matter
It is a method of buying and
selling goods, products or Ideally, a website should be translated into the languages of
Adaptation
services using the internet as a the target markets.
medium, that is, trading online.
Local Each company has a voicemail or fax point of contact in key
When intermediaries are Contac markets
eliminated, someone, either the
seller or the buyer, must assume
the functions they performed. The consumer must be able to use a credit card number, by
Payment
Consequently, an e vendor must email (from a secure page on the website), by fax or by
be concerned with the following phonemarkets
issues.
Delivery Surface postal delivery of small packages is the most cost-
effective for US businesses but takes the longest time.
Promotion With e-commerce, you can also advertise the products or
services offered..