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it is likely you will be angry at HP. Many firms try to shut down grey markets, but given the customer unhappiness it creates and the amount of effort required, vendors are learning to accept people do use and pay for their products.
pLaceMenT oR DisTRiBuTion cHanneLs
There is a surprising degree of variation in the ways products get to market in various countries. Selling soap in Japan involves one of the most complex distribution systems in the world. You must sell to a general wholesaler, who sells to a regional wholesaler, who sells to local wholesaler, who finally sells to retailers. With the product passing through all these channel members, the price paid by consumers ends up doubling or tripling what the importer origi- nally paid. Beyond the length of the channels, the retail end of the system can be quite different as well. Large-scale retailers like Wal- Mart and Sears dominate in the US but in many other countries the retailing sector is more run by small, independent retailers. In India, millions of little shops or just a spot in an open air market are key to moving products. Prices appear high but haggling is the order of the day. Indian incomes are low and many must shop daily for small amounts; cigarettes are often bought singly.
When a firm first enters a country it generally first works with local distributors but as it learns the system it may increasingly venture out on its own. Over time the firm learns to choose the right distributors for it, invest in them and set up mutually agree- able performance targets. Some few giant somewhat global retailers are arising, France’s Carrefour, Germany’s Metro and the UK’s Tesco but the vast majority of the world’s retailing is still run locally or regionally
SUMMARY
• International expansion starts modestly and continues to grow in size and scale in line with growth.
• Exporters can choose from a variety of such options as joint ventures or licensing agreements to expand internationally.
• Exporters must adapt the marketing mix to suit local tastes and needs of foreign markets.