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International Distribution Systems

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U.S. Exporters Yellow Pages. Private sources. Trade directories. Screening Intermediaries ... Canada 157.2 183 9. India 3540.0 253 NA. Japan 1591.2 79 4 ... – PowerPoint PPT presentation

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Title: International Distribution Systems


1
Chapter 14
International Distribution Systems
2
In International Distribution
  • The firm sells to its customers
  • directly through its own sales force
  • indirectly through independent intermediaries
  • indirectly through an outside distribution system
    with regional or global coverage

3
International Distribution Systems
  • I. Problems in International Distribution
  • 1) More stringent legal restrictions
  • 2) Goods must be transferred further
  • 3) May be difficult to get product to the
    consumer (infrastructure issues)
  • II. Channel Design
  • - Length, width, and the 11 Cs

4
Intermediaries
  • Sources for Finding Intermediaries
  • Distributor inquires
  • Governmental agencies
  • Commerce Departments Trade Opportunities Program
  • U.S. Exporters Yellow Pages
  • Private sources
  • Trade directories
  • Screening Intermediaries
  • Performance
  • Professionalism

5
Selection of Intermediaries
  • Agents
  • Foreign (Direct)
  • Brokers
  • Manufacturers Reps
  • Factors
  • Managing agents
  • Purchasing Agents
  • Domestic (Indirect)
  • Brokers
  • Export Agents
  • EMCs
  • Webb-Pomerene
  • Commission agents
  • Distributors
  • Foreign (Direct)
  • Distributors/dealers
  • Import jobbers
  • Wholesalers/retailers
  • Domestic (Indirect)
  • Domestic wholesalers
  • EMCs
  • ETCs
  • Complementary marketers

6
International Distribution Systems
  • III. Moving the Product Overseas
  • 1) Ocean shipping
  • 2) Air freight
  • IV. Types of Middlemen
  • 1) Freight forwarders
  • 2) Trading Companies
  • 3) Export Management Cos.

7
Real Physical Distribution Costs Between Air and
Ocean Freight - Singapore to the United States
In this example, 44,000 peripheral boards worth
7.7 million are shipped from a Singapore plant
to the U.S. West Coast. Cost of capital to
finance inventories is 10 percent annually
2,109 per day to finance 7.7 million. Transpor
t costs 31,790 127,160 (in transit 21
days) (in transit 3 days) In-transit inventory
financing costs 44,289 6,328 Total
transportation costs 76,079
133,487 Warehousing inventory costs (60 days
_at_2,109/day) Singapore and U.S.
126,540 Warehouse rent 6,500 Real physical
distribution costs 209,119 133,487
15-15
Ocean Air
SOURCE Adapted from "Air and Adaptec'c
Competitive Strategy,
International Business, September 1993, p.44.
Irwin/McGraw-Hill
8
International Distribution Systems
  • IV. Types of Middlemen (Cont.)
  • 4) Piggybacking
  • 5) Domestic export middlemen
  • V. Choosing a Middleman

9
Japanese Consumer Philosophy
? Harmony and Friendship ? Consumer ? Brand
Loyalty ? Service and Quality Over Price ?
Small, Frequent Purchases
14-6
Irwin/McGraw-Hill
10
Retail Patterns
Retail Outlets Population Employees Country (000)
per Outlet per Outlet
Argentina 199.5 164 4 Australia 160.2 111 5 Canada
157.2 183 9 India 3540.0 253 NA Japan 1591.2 79 4
Malaysia 170.6 109 8 Mexico 899.3 96 2 Philippine
s 120.1 547 28 South Africa 60.4 675 7 South
Korea 730.0 60 2 U.S.A
1516.3 170
13
SOURCES International Marketing Data and
Statistics, 21st ed. (London Euromonitor
Publications, 1997), and "Indicators of Market
Size for 115 Countries," Crossborder Monitor,
August 27, 1997.
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