International Marketing Channels

1. International Marketing Channels • Goal—getting the right product to the right place in the right quantities at the right time and at the right price • Forging a reliable and aggressive distribution channel may be the most challenging international marketing task • Every market contains a distribution network with many channel choices • Competitive advantage will reside with the marketer best able to build the most efficient distribution channel

2. International Channel-of- Distribution Alternatives

3. Home-Country Middlemen • Home-country middlemen (domestic middlemen) provide marketing services from a domestic base; assist in finding foreign markets for products made by local (domestic) manufacturers • Frequently used types of domestic intermediaries: Manufacturers’ Retail Stores Global Retailers Export Management Companies Trading Companies U.S. Export Trading Companies Complementary Marketers Manufacturer’s Export Agent Home-Country Brokers Buying Offices Selling Groups Foreign Sales Corporation Export Merchants Export Jobbers Webb-Pomerene Export Associations

4. Types of Home-Country Middlemen • Global Retailers –retailers with stores in many countries • Export Management Company —an agent that functions as a low cost independent “marketing department” • Trading Companies —firms that accumulate and distribute a wide variety of goods from many countries • U.S. Export Trading Companies —joint ventures organized to handle export activities and share costs and risks • Complementary Marketers —firms that export their goods and desire to take on additional products or lines from others • Manufacturer's Export Agent —an individual or firm that covers a small area and does business under its own name

5. Foreign-Country Middlemen • Middlemen located in foreign markets that seek goods from manufacturers outside their home country for importation and distribution in their home country • Common Types of Foreign-Country Middlemen Manufacturer’s Representatives Distributors Foreign-Country Brokers Managing Agents/Compradors Dealers Import Jobbers, Wholesalers, and Retailers

6. Locating Middlemen • Commercially published directories • Foreign consulates • Chamber-of-commerce groups located abroad • Other manufacturers producing similar but noncompetitive goods • Middlemen associations • Business publications • Management consultants • U.S. Department of Commerce

7. Selecting Middlemen • Screening Criteria Reputation Creditworthiness Markets served Products carried Number of stores Store size • Screening Tools Personal Interviews Telephone Interviews Reference Checks Directory Information Questionnaire

8. Motivating Middlemen • There is a clear correlation between a middleman’s motivation and sales volume • Motivational Techniques Financial rewards/incentives Psychological rewards Frequent communications Company support Corporate rapport

9. E-commerce—expands or facilitates international distribution • The Internet is an important distribution method for multinational companies • E-commerce growth in international business-to-business marketing has outpaced growth in international consumer sales • Important Considerations Cultural Preferences Adaptation (especially of language) Local contact information Payment form Delivery methods and terms Promotion regulations

10. Alternative Market Entry Strategies • Licensing—you grant the right to a foreign manufacturer or distributor to legally use your patent, trademark, or process • Franchising—you license a standard system of products and processes to a buyer (franchisee) in perpetuity for a fee • Joint Ventures—two or more companies share in the cost of a business venture • Consortia—a large number of partners pool their resources to operate a venture