Chapter 11

International Distribution

International Marketing
Chapter-11 International Decision

Objectives

What is international distribution system

What is indirect exporting
What is direct export
What
are
the
types
of
foreign
intermediaries
Why the distribution system in the market
is influenced by the business environment
What is international logistics
International Marketing
Chapter-11 International Decision

Introduction

Place, i.e., placing the product, is one of

the four Ps of marketing and it refers to
the distribution of the product covering
channels of distribution and physical
distribution.
The path traced in the direct or indirect
transfer of title to a product as it moves
from a producer to ultimate consumers or
industrial users. International Marketing
Chapter-11 International Decision

International Channel System

The international distribution system

consists of two subsystems, namely, the
domestic system and the foreign
system.
There are broadly two ways of
exporting, namely, direct exporting and
indirect exporting.
International Marketing
Chapter-11 International Decision

Indirect Exporting

1.
2.

The indirect method is more popular

with firms which are just beginning
their exporting activities and with those
whose
export
business
is
not
considerable. Two alternative channels
for indirect exporting.
International marketing middlemen
Co-operative organisations.
International Marketing
Chapter-11 International Decision

Marketing middlemen

Export merchants
Export/trading houses
Trading companies
Export drop shipper
Agents/brokers

International Marketing
Chapter-11 International Decision

Co-operative organisations

1.
2.

The co-operative exporting organisations,

which represents a cross between indirect
and direct export, carries on exporting
activities on behalf of several producers,
and is partly under the administrative
control of the manufacturers.
Piggyback marketing
Exporting combinations
International Marketing
Chapter-11 International Decision

Direct Export

As the name indicates, direct export

refers to the sale in the foreign market
directly by the manufacturer.
Firms with considerable export business
usually resort to direct exporting.

International Marketing
Chapter-11 International Decision

Types Of Foreign
Intermediaries

Importers
Distributors
Wholesalers
Retailers
Multiple channels
Government departments
State buying organisations
Joint-ventures and licensees/franchisees
International Marketing
Chapter-11 International Decision

Marketing Environment And

Internal Distribution

The nature of the distribution system in

a market is generally influenced by the
relevant business environment.
A particular distribution channel best
suited for a product in one market may
be inappropriate in another market.
Within-country channels of distribution
very considerably from country to
country for consumer goods.
International Marketing
Chapter-11 International Decision

Factors Influencing Channel

Selection
1.
2.
3.
4.
5.
6.

Product characteristics
Market and customer characteristics
Middlemen characteristic
Company characteristic and objectives
Competitors characteristics
Environmental characteristics
International Marketing
Chapter-11 International Decision

International Logistics

International logistics defined as the

designing and managing of a system
that contracts the flow of materials into,
through, and out of the international
corporation. It encompasses the total
movement concept by covering the
entire range of operations concerned
with product movement.
International Marketing
Chapter-11 International Decision

Components Of Logistics
Management

Fixed facilities location

Transportation
Inventory management
Order processing
Materials handling and warehousing

International Marketing
Chapter-11 International Decision

Summary

The international channel is affected by the

method of exporting.
Direct exporting and indirect exporting are
the two ways of exporting
Some important foreign intermediaries are;
importers, distributors, wholesalers, retailers,
multiple channels, government departments,
state buying organizations, joint ventures
and licenses.
Logistics is a factor which affects the
competitiveness of a firm.
International Marketing
Chapter-11 International Decision