International Distribution

INTERNATIONAL DISTRIBUTION 1

Distribution involves moving goods from the producer to the finalconsumer. The channel can be long or short. For internationalcompanies, the mode of transport is an important factor in reachingthe final consumer. Some companies transport goods to the finalconsumer while others contract merchandisers to take goods to thefinal consumer.

The mode of transport is dependent on several factors. First, theshelf-life of the products determines whether a company uses a fastor a slow mean of transport. Also, the inventory levels in acompany’s depot in a country to avoid delayed orders to consumers.The international order cycle time also determines the mode oftransport. Companies with a short international order cycle time mayopt for a fast method of transport.

A distribution channel for an international company involves fourmain players. They include the manufacturer, the import agent, thewholesalers, retailers and the final consumer. A company chooses thelength of its channel opening on its internal policies, the policiesof the local country or the nature of the goods.

Wholesalers are instrumental in countries with a poorly developedretail sector. They help a company to concentrate on production andreduce the number of its sale staff. However, it is challenginginternational marketers to find the correct channel that capitalizeson a company’s strength. It also has to be flexible so that acompany fits into the local markets without conflicting with thelocal trade policies and culture.

An international company has to consider the credibility of adistributor to avoid losing the market share in the local market.Besides, the internal rules provided by government agencies influencethe choice of the distributor. Some company may opt to use a similarchannel in all countries while others may customize their strategiesin all the countries. A company should be careful not to interferewith the culture of different societies in their choice of adistribution channel.