International Marketing Channel

TC/IS/2011/MS/144International Marketing

MMT-000Department of Business and Management studiesFaculty of Communication and Business studies

Trincomalee Campus –Eastern University

Channel of distribution

What is meaning of Distribution Channel ?

Process Of DistributionPhysical Handling

and distribution

Passage of

Ownership

Buying & selling negotiation

Between Producer

&middleman

Buying & selling negotiation

Between Middleman &

Customer

Channels Of Distribution Structure

Import – Oriented Distribution Structure

Japanese Distribution Structure

Traditional to modern channel Structure

Import-Oriented Distribution Structure

Developing countries depend on import manufactured goods.

Importer controls a fixed supply of good

Demand exceeds supply

Limited supply create high price

The customer seeks the supply from a limited number of middlemen

Limited supply

Lot of

middleman

High price

HighDemand

Import-Oriented Distribution Structure

There in china ,but they aren’t Peking ducks. The birds are for sale in Guangzhou’s free market, the first farmers’ market to be opened in china after the cultural revolution. This market was the place

where free enterprise found its rebirth. Every kind of food is for sale here.

Japanese Distribution Structure

Four distinguishing features

High density of middlemenChannel controlBusiness philosophyLarge Scale retail store lawChanges in structure

High Density of Middlemen

Groceries and bakers94.7%

Japan

U.SSupermarket, discount

food stores

59.1%

35.7%

Small stores of retail food sales

1 2 3

Small stores of retail food sales

High Density of Middlemen

Channel Control

Inventory Financing

Cumulative rebates

Merchandise returns

Promotional Support

Business Philosophy

Emphasizes loyalty, harmony, and friendship

Supports long-term dealer-supplier relationships

The cost of Japanese consumer goods are among the highest in the world

Japanese law gives the small retailer enormous advantage over the development of larger stores

Distribution PatternsDistribution patterns are always evolving and new patterns are developing and marketing channels are not the same throughout the world.

1. Middlemen Services 2. Product Line Breadth 3. Costs and Margins 4. Channel Length5. Nonexistent Channels 6. Blocked Channels 7. Stocking8. Power and Competition

Retail Patterns

Retail Size Patterns Direct Marketing

Resistance to Change

Alternative Middleman Choices

Government middleman

International Channel of Distribution alternatives

Home country middleman

Foreign country middleman

Factor affecting choice of channel

1. Cost2. Capital Requirements3. Control4. C overage5. C haracter6. C ontinuity e

Cost

Thank You