EXPORT

DISTRIBUTION
CHANNEL

Prepared by: Shane Mae Domingo & Dulce Amor Dumaguit

DISTRIBUTION

• Distribution involves all

the activities
concerned with the
transfer of goods from
the point of
manufacturers to the
consumer.
1 Commercial Distribution
This is often referred to us as the marketing channel of
distribution or simply, the marketing and trade channels.
This set up of distribution appears to be more
complicated because it involves a variety of middleman
and intermediaries before the goods reach the end –
consumers.

2 Physical Distribution
Deals with the problem of space and time, specifically
how to affect the transportation and of goods.
 Exporter-producer
Indirect in home country

In Home Country Export Merchant or Agent

In Foreign County Importer/Wholesaler

Typical Export Distribution Import Merchant

Retailer
Channel or
Agent/Distributor

Export Producer in
Direct
Home Country

Retail/Resident
In Foreign County
Buying Office
1 Direct Export Sale

Developing a firm’s own sales force, end offering

products directly to the retailers without resorting to
intermediaries

2 Indirect Export Sale Through Intermediaries

Which means relying on importers and commission

agents both here and abroad who, in turn, distribute or
serve major buyers directly.
 Common Distribution Functions
PRODUCER-EXPORTER AGENT IMPORTER/WHOLESALER

• Manufactures the • Does not keep • Buy at his on risk

goods stock • Keep stock
• Sells and promote • Is not responsible • Will not disclose the name of
the goods for the payment his/her client
• Packs the goods • Works on the • Might handle other
• Weigh and inspect basis of sole competing products
the goods agencies • Might be willing to pay some
• Arranges for the • Puts the buyer promotional expenses
transportation and seller • Sets his/her profit margin
• Delivers to agreed together • May work on basis on
destination • Receives exclusivity
• Receive payment commission • Gives credit
for the goods • Delivers goods to retailers.
 RETAILER SPECIAL WHOLESALER CONSUMER

• Buys from wholesaler or

• May work • Ultimately buy
purchases from association
regionally and processes
• Buys from agent-importers
• Does not cover the the goods
• May import directly through
whole country • May store the
his/her purchasing
• Often specializes goods
department
food and • Consumes the
• Keep stock
household goods
• May insist on exclusive
products for • Pay in cash and
contract
specific industries credit
• Promotes the items
like hotel, • Includes
• Store and display
• restaurant etc. industries
Can be a powerful marketer
• Does not always hotels, airlines
if the product interest
insist on a etc.
him/her
exclusive contract
• Sells to end-consumer
CHARACTERISTICS OF
TRADING CHANNELS
DEPARTMENT STORES
Large number of styles but low volume.
Moderate to reasonable prices. Do not
provide specific design direction, but rely
on manufacturers for actual design
DISCOUNT
STORES
Few styles/high volume. Low price Provide
design of a successful product to be copied.
Shorter lead rime compared to that given by
department stores
SPECIALTY
STORES
Few styles/low volume. High price per
style. Provide design. Shorter lead
time
MAIL-ORDER
COMPANIES
Many styles/law volume. Moderate to high
prices. Frequent reorders. Develop their
own design Designs run for about two
years. Average lead time
WHOLESALER/
DISTRIBUTOR
Few styles/high volume. Low to moderate
prices. Provide design of a successful
product to be copied. Short lead time.
SHIPPING OF
GOODS
The commercial distribution of goods may take effect with the physical
or the actual shipping out of goods from the country of origin to their
destination. There are several choices in transporting the goods. Goods
distribution con be transported by sea, by rail or by air. Presently
though, ocean freight is the most widely-used form of shipment in the
international trade, it being the cheapest mode of transport for
delivering large quantities of goods over long distances.
 FOUR TYPES OF OCEAN SERVICES
Conferences are groups of shipping lines bound together for the
Conference
1 Line Vessels
purpose of adopting common rules and regulations, and charging
uniform freight rates for particular routes.

These ships are operated by shipping companies that offer

Non-Coference
scheduled services but quote freight rates independently from one
2 Line Vessels
another.

These ships do not follow regular routes but travel where cargoes
3 Tramp Ships
are available.

These ships can be hired to transport products for a particular

4 Charter Ships
purpose or time.
 OCEAN FREIGHT
RATES
Freight rates mostly depend on the nature of
goods shipped, the weight or volume of the
goods and the destination. To some extent,
however, they depend on the type of shipping
vessel used.
CONTAINERIZATI
ON
Most expert shipments nowadays use freight containers
instead of the conventional mode.
1. Full Container Load
(FCL)
This implies that the shipper will have a container at his/her disposal and
that he/she will normally have enough cargo with which to fill the container.

2. Less Container Load

(LCL)
This implies goods in any quantity intended carriage in a container, but
the goods are delivered to the carrier for containerization.
CONTAINER SIZE CAPACITY

• 20 ft. • 33 cbm.
• 40 ft. • 67 cbm.
• 76 ft. high cube • 76 cbm.
• 40 ft. jumbo • 76 cbm.
• 45 ft. • 86 cbm.
 AIR
TRANSPORT
Air transport is a good choice for goods which are highly perishable and
valuable. These goods have a high ratio to weigh, which means, they are
light but expensive. The advantages of using air transport includes;

A.) Speedy delivery of goods — the faster the delivery, the quicker the buyer
receives his/her goods and the faster the exporter receives his/her payment..

B.) Less risk of pilferage and damage there is greater security in air transport
manifested in the insurance premiums on shipments by air which are usually lower
than those for sea transport.

C.) Less need for costly protective packaging since the packing needed for
shipment by air is much lighter thon that for shipment by sea.
THANK
YOU!