Page 383 - Introduction to Business

CHAPTER 10 Developing the Promotion and Distribution Mixes 357

face with the manufacturer’s purchasing department so they know the buyer’s pref-
erences, what they are willing to pay, when they expect delivery, and so on. Perish-
able products tend to go direct because of the spoilage factor.
Developing a channel strategy is very important. One channel expert says that
the “wrong decision will cost you business. And lots of it.” What should be con-
13
sidered as this decision is contemplated? Customer preferences are important. In
14
fact, the first step is to “uncover how the customers want to buy.” Companies often
use the same channel strategies as the competition under the assumption that they
are effective. How much money is available is an important consideration. Once the
overall strategy is in place, companies must select specific channel companies to
carry their products. The following should guide their decisions:

How financially sound are the candidate companies?
Are they experienced in carrying the types of products the firm needs marketed?
Does their physical coverage of the market dovetail with what the manufac-
turer requires?
Do they have a solid reputation?
How likely is it that they will aggressively sell our product?
How willing are they to carry inventories?

With firms wanting to sell their products overseas, it is often quite difficult to get
answers to these questions. Fortunately, firms can turn to the U.S. government for
help, especially the U.S. Department of Commerce. Such help is usually low cost or
even free. Exhibit 10.9 lists the major government sources available.
Companies frequently need to change their channels of distribution. For example,
beef jerky accounts for most of the sales of meat snacks and is experiencing a 30

EXHIBIT 10.9
U.S. Government Sources for Information About International Channels
of Distribution

• New Product Information Service. U.S. firms get worldwide publicity and
distributors can seek them out.
• Trade Opportunities Program (TOP). Department of Commerce matches
product interests of foreign firms with U.S. firms.
• Foreign Traders Index (FTI). Data file on more than 140,000 importers,
agents, and distributors.
• Agent/Distributor Service (A/DS). Locates foreign firms with compatible
product interests that are willing to entertain proposals by U.S. firms.
• World Traders Data Report (WTDR). Provides profiles of foreign agents and
brokers as well as a narrative report.
• Economic Bulletin Board. A personal, computerized bulletin board that is
an online source for overseas agents and distributors.
• Matchmaker trade delegations. U.S. Department of Commerce missions to
foreign countries designed to introduce U.S. exporters to prospective agents
and distributors.
• Customized sales survey. Custom-tailored research service that provides
firms with specific information about agents and distributors for their spe-
cific products in selected countries.
• Multi-State/Catalog Exhibition Program. Through catalogs, helps small- and
medium-sized U.S. firms that are infrequent exporters to line up foreign
agents and distributors.

Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.