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International Distribution Channel2
International Distribution Channel2
BY: DEBANGSHU S. ROY DIVYA SHARAD LAVEENA SACHDEVA PREETI KUKREJA TANUJ KALRA VAIBHAV VISHNOI
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marketing institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a Marketing channel.
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Functions of Intermediaries
Perform the marketing function better.
Provide efficient distribution of the product. Breaking bulk sell to customers in smaller
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intermediaries.
Dual distribution A distribution system with more than one channel.
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Global Perspective
Global Perspective: 500 Million Sticks of Doublemint Today Billions Tomorrow
Most challenging aspect of selling the gum for
Doublemint is how to get the gum through Chinas distribution channels: Mastering the distribution system is the single most important challenge of Chinas economic revolution Finding reliable distributors is a challenge Many are state owned and have little incentive to push one brand over another Doublemint gum found a way to distribute their products effectively thru China 5/1/2012 Note: Doublemint has a 91% market share in
Selection of channel
The selection of distribution is affected by many of factors, which play significant role while choosing the channel for distribution. It may include the buying pattern of consumer, type of the product is perishable, or auto mobile, weight and bulk and it also depends on the company's resources.
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Merchant Middlemen
Take title of goods being distributed (manufactures have less control) Motivated by profit, tend to be less loyal to one brand
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Exporter
Importer
Foreign retailers
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MANUFACTURERS EXPORT AGENT An agent firm provides selling service for manufacturers. Operates on a straight commission basis and covers only one or two markets. Provides services similar to EMCs and does business in their own name. HOME COUNTRY BROKERS They perform low cost agent services. Perform function of bringing bringing buyers and sellers together. They specialise in one or more particular commodity and for the same maintain contact with major producers and 5/1/2012 15 purchasers.
EXPORT MERCHANTS Intermediaries who take title to and possession of the products they carry Responsible for shipping and marketing the products in the target market Carry competing brands Examples: export jobber, who carries commodity goods, but does not take physical possession of the goods.
PIGGYBACK MARKETING channel innovation that has grown in popularity One manufacturer distributes product by utilizing another companys distribution channel Requires that the combined product lines be complementary and appeal to the same customer
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Retailers
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Distributor
Is a merchant middlemen with close cooperation to the manufacturer Functions are- control over prices, inventories, servicing.
Agent
Conducts business within a foreign nation under contract arrangement with parent country. Compensation is on the basis of cost plus a specified % of profits of the managed company.
Brokers
Foreign brokers are part of small brokerage firms operating in a country. Function in good continuing relationships with customers and speedy market coverage at low costs
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Dealers
Independent merchant middlemen with the supplier company having equity in it. Ex- Massey fergusson and caterpillar tractor company
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Sources to use: U.S. Dept. of Commerce, foreign consulates, commercially published directories
Controlling Middlemen
Control over the system (distribution network) Control over the middlemen
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Volume of sales, market coverage, services offered, pricing, advertisement, payment of bills and profitability. 5/1/2012
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