1. Chapter 14
1. The variety of distribution channels and how they affect cost and efficiency in marketing
2. The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods
3. How distribution patterns affect the various aspects of international marketing

2. Chapter Learning Objectives
4. The growing importance of e-commerce as a distribution alternative
5. The functions, advantages, and disadvantages of various kinds of middlemen
6. The importance of middlemen to a product’s success and the importance of selecting and maintaining middlemen

3. Getting the product to the target market can be a costly process
Introduction
Getting the product to the target market can be a costly process

4. Channel-of-Distribution Structures
The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), and the buying and selling negotiations between producers and middlemen and between middlemen and customers
Channel structures range from those with little developed marketing infrastructure such as those found in many emerging markets to the highly complex, multi-layered system found in Japan

5. Japanese Distribution Structure
Distribution in Japan has long been considered the most effective non-tariff barrier to the Japanese market
It has four distinguishing features:
a structure dominated by many small middlemen dealing with many small retailers—high density of middlemen,
channel control by manufacturers,
a business philosophy shaped by a unique culture, and
laws that protect the foundation of the system—the small retailer

8. Distribution Patterns
Distribution patterns are not the same throughout the world
Some general distribution patterns that are similar globally include:
Middlemen Services
Channel Length
Stocking
Power and Competition

10. Retail Patterns
International retailing shows even greater diversity in its structure than does wholesaling
Some general retailing patterns include:
Retail Size Patterns
Direct Marketing

12. Home-Country Middlemen
Home-country middlemen, or domestic middlemen, provide marketing services from a domestic base and find foreign markets for products for local manufacturers
Frequently used types of domestic intermediaries include:
U.S. Export Trading Companies
Manufacturer’s Export Agent
Export Merchants
Export Management Companies

15. Foreign-Country Middlemen
Some of the more important foreign-country middlemen, who find markets for foreign manufacturers include:
Foreign-Country Brokers
Managing Agents and Compradors
Dealers
Import Jobbers, Wholesalers, and Retailers

16. Factors Affecting Choice of Channels
The following points should be addressed prior to selecting intermediaries:
Identify specific target markets within and across countries.
Specify marketing goals in terms of volume, market share, and profit margin requirements.
Specify financial and personnel commitments to the development of international distribution.

17. Six Cs of Channel Strategy
Channel strategy itself is considered to have the following six specific strategic
goals:
Cost
Capital Requirements
Control
Coverage
Character
Continuity

18. Chamber-of-commerce groups located abroad U.S. Department of Commerce
Locating Middlemen
Firms seeking overseas representation should compile a list of middlemen from
such sources as the following:
Foreign consulates
Chamber-of-commerce groups located abroad
U.S. Department of Commerce
Google

19. Screening based on the following criteria: (a) reputation
Selecting Middlemen
In selecting middlemen, the following should be used.
Screening based on the following criteria:
(a) reputation
(b) creditworthiness
(c) markets served
(d) products carried

20. Motivational techniques may be grouped into five categories:
Motivating Middlemen
There is a clear correlation between the middleman’s motivation and sales
volume
Motivational techniques may be grouped into
five categories:
(1) financial rewards
(2) psychological rewards
(3) company support, and
(4) corporate rapport

21. The Internet
The Internet is an important distribution method for multinational companies
When using the internet for distribution purposes, the following factors should be considered:
Culture
Adaptation (especially of language)
Local contact information
Payment form
Delivery