ST.

JOSEPH’S COLLEGE OF COMMERCE

(AUTONOMOUS)

BRIGADE ROAD, BANGALORE, 560047

INTERNATIONAL MARKETING
REFELCTIVE ANALYSIS ON SEVEN RULES OF
INTERNATIONAL DISTRIBUTION

SUBMITTED BY
ANU S VARGHESE
MCOM IB
20SJCCMIB006
 REFLECTIVE ANALYSIS ON SEVEN RULES OF INTERNATIONAL
DISTRIBUTION

A multinational entering into a new market in a developing country knows on its own that it
cannot master local business practices; meet its legal requirements, hire and manage local
personnel and satisfy potential consumer needs. The first rule of international distribution is
finding a potential distributor as the choice of distributors and the terms of relationship should
serve the multinational’s long term goals. The goal is to look for distributors with a strategic
market plan and not someone who might offer an attractive proposal. The second rule states that
the choice your distributor selects should help serve the companies goals and aims. The
distributor should be able to develop the firm in local markets as well as to compete with the
competitors in line. So, it’s better to partner with smaller and less known partners that are likely
to value the firms and its wants as it would give the firm more control and say to how and where
to expand. The third rule of international distribution states that the local distributors should be
treated as long term partners and not just a market entry vehicle by creating long term contracts
with them or by granting national exclusivity to the distributors so that in turn the distributor
would be willing to invest in the company. The fourth rule states for a multinationals to gain
strategic control they must provide adequate corporate resources by sending in technical and
sales personnel, taking minority equity shares in distribution companies where it could be
effective in the long run opening up doors for information sharing. The fifth rule states that is
essential to maintain market control at the very start over the marketing strategy as the
multinational has the complete right to position its own product, decide its own packaging and
budgeting the product. The sixth rule states that a multinational firm is likely to strive if it’s
provided with market and financial performance data. It is vital that the distributors provide the
firms with such data so that they firms could keep up with the trend and then decide if they want
to produce more or less. The seventh rules is building links with the distributor as the earliest as
possible to have a potential consumer base. So multinationals need to do better job in selecting
and working with local distributors where they should understand distributors as market
implementers as this would result in better working relationship, less crises and more market
share and revenue.