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Copyright2001byHarcourt,Inc.Allrightsreserved.Requestsforpermissionstomakecopiesofanypartoftheworkshouldbemailedtothefollowingaddress:PermissionsDepartment,Harcourt,Inc.,6277SeaHarborDrive,Orlando,Florida32887-6777.,INTERNATIONALMARKETING6e,ChannelsandDistributionStrategies,Chapter13,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-2,InInternationalDistribution,Thefirmsellstoitscustomers:directlythroughitsownsalesforceindirectlythroughindependentintermediariesindirectlythroughanoutsidedistributionsystemwithregionalorglobalcoverage,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-3,ChannelStructure,Howtostructurethedistributionchannelsisthemostimportantlong-termmarketingmixdecisionafirmmaymake.Channelstructuresaredesignedtomanagemultidirectional(horizontalandvertical)connectionsinphysicalmovementofgoodsandservicestransactionaltitleflowsinformationcommunicationsflows,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-4,ChannelConfigurations,Manufacturer,Manufacturer,Originator,Consumer,IndustrialUser,Consumer/IndustrialUser,Agent,Agent,Agent,Agent,Agent,Agent,Agent,Wholesaler,Wholesaler,Retailer,Retailer,Retailer,Retailer,IndustrialDistributor,IndustrialDistributor,ConsumerProducts,IndustrialProducts,Services,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-5,ChannelDesignConsiderations,Customercharacteristic:Whatdotheyneed?whydotheyneed?whendotheyneed?Howdotheyneed?,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-6,ChannelDesignConsiderations,DistributioncultureThestructurallinkagesandfunctionalcharacteristicsofexistingchannelsCompetitionWhatchannelsdoesthecompetitionuse?CompanyobjectivesDeterminedbycompanyobjectivesformarketshareandprofitability.,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-7,ChannelDesignConsiderations,CharacterThenatureoftheproductimpactsthedesignofthechannel.Thechannelmustmatchthepositioningoftheproductinthemarket.“Capital”.describesthefinancialrequirementsforsettingupachannelsystem.“Cost”istheexpenditureincurredinmaintainingachannelonceitisestablished.,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-8,ChannelDesignConsiderations,Coveragethenumberofareasinwhichaproductisrepresentedandthequalityofthatrepresentation.TypesofcoverageIntensiveSelectiveExclusive,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-9,Control,Theuseofintermediarieswillresultinsomelossofmarketcontrol.Controlcorrelateswiththetypeofproductorservicebeingmarketed.Themarketersabilitytoexercisepowerdeterminestheextentofcontrol.Typesofpowerreward,coercive,legitimate,referent,expertCarefulcommunicationwithforeignintermediariesisneededtomakethemawareofthemarketerscontrolintentions.,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-10,Continuity,Channeldecisionsarethemostlong-termofthemarketingmixdecisions.Caremustbetakeninchoosingtherighttypeofchannel.EstablishingcontinuityisthemarketersresponsibilityContinuityisexpressedthroughvisiblemarketcommitment.,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-11,Communication,.providestheexchangeofinformationthatisessentialtothefunctioningofthechannel.Typesof“distances”thatcausecommunicationproblems:SocialdistanceCulturaldistanceTechnologicaldistanceTimedistanceGeographicaldistance,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-12,Intermediaries,TypesofintermediaryrelationshipDistributorshipAgencyTypeofexportingfunctionIndirectexportingDirectexportingIntegrateddistribution,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-13,Intermediaries,SourcesforFindingIntermediariesDistributorinquiresGovernmentalagenciesCommerceDepartmentsTradeOpportunitiesProgramU.S.ExportersYellowPagesPrivatesourcesTradedirectoriesScreeningIntermediariesPerformanceProfessionalism,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-14,SelectionofIntermediaries,AgentsForeign(Direct)BrokersManufacturersRepsFactorsManagingagentsPurchasingAgentsDomestic(Indirect)BrokersExportAgentsEMCsWebb-PomereneCommissionagents,DistributorsForeign(Direct)Distributors/dealersImportjobbersWholesalers/retailersDomestic(Indirect)DomesticwholesalersEMCsETCsComplementarymarketers,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-15,TheDistributorAgreement,TypicaltermsincludeContractdurationTypicallyshortperiodsinitiallyGeographicandcustomerboundariesWell-definedterritoriesandchannelsCompensationMethodsfordeterminingpaymentamountsandhowandinwhatcurrencypaymentistobemade.ProductsandconditionsofsaleProductstobesold;termsandconditionsofsalesMeansofcommunicationbetweenparties,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-16,ChannelManagement,CoordinatingtwoindependententitieswithsharedgoalsTherelationshipneedstobemanagedforthelongtermFactorscomplicatingchannelmanagementOwnershipGeographic,cultural,andeconomicdistanceDifferentrulesoflaw,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-17,ChannelAdjustmentandTermination,TypicalreasonsforchanneladjustmentGrowthandchangesintheinternationalmarketersdistributionapproachmayeliminateachannel.Conflictofinterestandalackinterestorperformancebytheintermediarymayrequireachannelmodification.Terminationconditionsarethemostimportantconsiderationsinthedistributionagreementandmustbespelledoutclearly.,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-18,GrayMarkets(ParallelImportation),Argumentsfor:Therightto“freetrade”ConsumersbenefitfromlowerpricesDiscountdistributorshavefoundaprofitablemarketniche,Argumentsagainst:GraymarketerstakeunfairadvantageoftrademarkownersmarketingandpromotionParallelimportsdeceiveconsumersbynotmeetingproductstandardsorexpectationsofafter-saleservice,Copyright2001byHarcourt,Inc.Allrightsreserved.,13-19,TheSolutiontotheGrayMarketProblem?,Acontractualrelationshipthattiesbusinessestogether.,Copyr
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