HOME COUNTRY MIDDLEMAN Located in the producing country,

provide marketing services from a domestic base.

Offer many advantages for companies with small international sales volume, those inexperienced with international markets and those who don’t want to involve in the complexity of the markets.

Disadvantages: limited control over the entire process.

MANUFACTURERS RETAIL STORES Important channel of distributions for

a large numbers of manufacturers is the owned, or perhaps franchised retail store.

Example Disney

GLOBAL RETAILERS Major domestic middlemen for

international markets. Example IKEA, Toy R Us Wall Marts: 13000 store 13 countries

EXPORT MANAGEMENT COMPANIES Important middlemen company for

firm with small international volume or those un willing to involve their own personnel in the international function.

Ranging in size of 1 person up to 100 and handle about 10% of the manufactured goods exported.

Take full or partial responsibility for promotion of goods, credits arrangements, physical handling, market research and information on financial, patent and licensing matters.

Works on commission. Major disadvantages: EMCs seldom can make the kind of

market investment as they need to have immediate sales up to survive.

TRADING COMPANIES Important intermediaries in the

development of trade between nations.

Trading companies accumulate, transport and distribute goods from many countries.

Large trading companies generally located in develop nations; they sell manufactured goods to developing countries and buy raw material and unprocessed goods.

Sogo Sosha in Japan date back in early 1700s operates as importers and exporters. 300 are engaged in foreign and domestic trade through 2000 branch offices outside Japan and handle over

COMPLIMENTARY MARKETERS Companies with marketing facilities or

contacts in different countries with excess marketing capacity or a desire for a broader product line sometimes will take additional line for international distributions.

Such a common name as Complimentary marketers or Piggy backing

Most piggybacking arrangements are undertaken when firms want to fill out

Domestic producer or marketer sells to or through

Open distribution via domestic wholesale middleman

Export management company

Exporter

Importer

Foreign agent

or merchant

wholesalers

Foreign retailers

Foreign consumer

International Channel of Distribution alternatives

HOME COUNTRY

its product line or keep its seasonal distributions channel functioning throughout the years.

Criteria for piggyback:1. The product relates to the product

line and contributes to it.2. The product fits the sales and

distribution channel presently employed.

3. The margin is adequate to make the undertaking worthwhile.

4. The product will find market acceptance and profitable volume.

MANUFACTURERS EXPORT AGENTS Individual agent middlemen or an

agent middlemen firm providing a selling services for manufacturers.

Unlike EMC, MEA does not serve as the producers export departments but has a short term relationship, covers 1-2 markets, and operates on straight commission basis.

Do on its own name rather than using the client names.

FOREIGN SALES CORPORATION Sales Corporation set up in foreign

country or U.S possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property.

FSC can function as a principal, buying and selling for its own account or commissioned agent.

In 2003 WTO ruled FSC to be in violation of international trade rules, thus starting a major trade disputes.

Factor affecting Choices of Channels

Cost: A. The capital or the investment cost

of developing the channel.B. The continuing cost of maintaining

it.

Capital requirementCapital requires and the cash flow patterns associated with using a particular type of middleman.

Use of dealers and middleman may be will lessen the capital investment but manufactures often need to provide initial inventories, consignments, loans, floor plans or other arrangements.

ControlEach type of channel arrangements provides a different level of control.The ability controlling the price, volume, promotion, and types of outlets.

CoverageMajor goal is full-market coverage to gain optimum volume of sales obtainable in each market share and attain satisfactory in market penetration.Coverage may be assessed by geographic segment, markets segments or both. To achieve coverage , a company may have to use many different channels either its own sales force in one country , manufacturers agent in another and maybe a merchant wholesaler's in still another.

ContinuityChannel of distributions often pose a longevity problems. Most agents’ middlemen's agents tend to be a small institution.When one’s individual retires or moves out of line business the company may find it has lost its distributions in that area.Most middlemen have little loyalty to their vendors, as they tend to only service which can get more profits.

CharacterThe system selected must fit the character of the company and the market in which it is doing business. Some obvious requirements often the first considered, relate to the perish ability or bulk of the product, complexity of sales , sales service required and value of the product.