Managing

International

Distribution

• Distribution

Physically moving products and establishing intermediary relationships to support such movement.

• Physical Distribution (Logistics)

The activities of distribution involved in the physical relocation of products.

• Channel of Distribution

The system of intermediaries (business relationships) established to guide the movement of a

product.

Distribution Terms

The Role of Distribution Activities in Marketing

• Functions of Intermediaries

Perform the marketing function better.

Provide efficient distribution of the product.

Breaking bulk – sell to customers in smaller quantities.

Assorting – bringing together similar lines of goods.

Shifting risks.

Merchant middlemen - take title to the goods distributed.

Agents/brokers - distribute goods only.

Direct channel

Indirect channel

Dual distribution

Types of Distribution Channels

Alternative Channels of Distribution

Direct Marketing

Direct marketing is a channel-agnostic form of advertising which

allows businesses and nonprofit organizations to communicate

straight to the customer

Structuring a Distribution Channel

• Important Factors in Building a Distribution Channel

Costs associated with establishing a direct channel distribution

Coverage is increased through the use of indirect channels of

distribution.

Control is enhanced using a direct distribution channel.

Strategy Options for Global Firms

• Foreign Licensing

Allowing a company in another country to purchase the right to manufacture and sell a company’s

products in international markets

Licensee

• The company buying the licensing rights

Licensor

• The company selling the licensing rights

Royalties

• Fees paid by the licensee to the licensor

for each unit produced under a licensing contract

Challenges to Global Business

• Political Risk

The potential for political forces in a country to negatively affect the

performance of businesses operating within

• Economic Risk

The probability that a government will mismanage its economy and

thereby change the business environment in ways that hinder the

performance of firms operating there.

• Exchange rates—the value of one country’s currency relative to that

of another country.

International Supply Chain Management

Aspects of Supply Chain Management

Manav Agarwal manavs87@gmail.com9823962733