Page 200 - International Marketing

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202 International Marketing BRILLIANT'S

Manufacturer's external export organization, usually assumes the
responsibility for moving the product overseas. The intermediary may be a
domestic agent or it may be a domestic merchant, if it does not take title
to the goods. An international marketer, therefore can make use of the
following types of intermediaries for distribution in foreign markets.
(a) Domestic intermediaries:
 Commission buying agents.
 Country controlled buying agents.
 Export management companies.
 Export merchants.
 Export agents.
 Piggy backing.
(b) Foreign intermediaries:
 Foreign sales representatives.
 Foreign sales agent.
 Foreign stocking and non-stocking agents.
 State controlled trading companies.
There are several advantages of employing an indirect channel. The
channel is simple and inexpensive. The manufacturer incurs no start up
costs for the channel and is relieved of the responsibility of physically
moving the goods overseas. Because the intermediary very likely represents
several clients who can help share distribution costs, the cost for moving
the goods are further reduced.
However, an indirect channel does have limitations. The manufacturer
has been relieved by any immediate marketing costs but in effect, has
given up control over the marketing of its product to another firm. It may
adversely affect the products success in the future. If the intermediary is
in aggressive, the manufacturer may become vulnerable, especially in the
case where competitors are careful about their distribution practices.
Moreover, the indirect channel may not necessarily be permanent. The
intermediary can easily discontinue handling manufacturer's product if there
is no profit or if a competitive product offers a better profit potential.
Forms of Indirect Distribution Channel

(A) Agents: In international marketing, a marketer may opt for indirect
distribution channel where the manufacturer markets its product or service
through another domestic or local firm that acts as its sales intermediary