DISTRIBUTION STRATEGIES

International Marketing Strategies-Distribution Process

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International Marketing Strategies-Distribution Process

The paper focuses on the International Marketing Strategies a multinational company adopts to improvise their distribution channels. The content covers different phases involved in the distribution process with an aim to support the understanding of the reader as to how is the distribution process works in the international market.

Recent years clearly shows significant growth in international trade (Rosenbloom and Larsen, 2008, pp. 252). This growth has been even greater than the increase in the production countries. Therefore, an increasing share of production in many countries is traded internationally. There is greater openness and interconnection between different national economies.

One of the major manifestations of globalization is the growing number of companies that acquire a multinational or even transnational (Philip and Anderson, 2002, pp. 62). Empirical research indicates that multinationals on average have higher profit rates than purely domestic companies. There are several sources of advantage for multinational companies in the new global economy. A larger market can take advantage of economies of scale, thereby lowering costs and increasing profits (Philip and Anderson, 2002, pp. 62). The lags in business cycles in different countries provide diversification benefits or reducing the risk. A multinational company has access to cheaper funding sources and better adapted to their needs.

Distribution channel is a structure of interdependent businesses and organizations ranging from the point of origin of the product to the consumer. A distribution channel consists of individuals and companies involved in the transfer of ownership of a product as it passes from manufacturer to the final consumer or industrial user (Alderson, 1954, pp. 22). The channel of a product extends only to the last person or organization to purchase without major changes in its shape. When changes are made and born other product, comes into play a new channel (Vaile, 1952, pp. 113).

The classification of the different distribution channels that are used usually starts from the premise that consumer products (those that end users purchase for personal consumption) and industrial products (those that are purchased for further processing or used in a business) need very different distribution channels, so they are divided primarily into two types of distribution channels:

Channels for consumer products and

Channels for industrial or business to business. Then both are divided into other types of channels that differ by the number of channel levels involved in it.

Direct Channel or Channel (the producer or manufacturer to Consumers) is the type of channel has no intermediary level, therefore, the producer or manufacturer performs most of the marketing functions such as marketing, transportation, storage and acceptance risk without the aid of any intermediary (Alderson, 1954, pp. 22). Direct marketing activities (including telephone sales, mail order and catalog, as well as electronic forms of retail sales, such as online shopping and television networks for home shopping) are a good example of this type of channel structure (Vaile, 1952, pp. 129).

Retail Channel or Channel (producer or manufacturer to retailers and their consumers): This type of channel contains a level of middlemen, ...