Page 207 - International Marketing

NPP

BRILLIANT'S Overseas Market 209

Factors Affecting International Channels
The problem of selecting the most suitable channel of distribution for
a product is complex. We have to consider a number of factors, such as
the nature of the product, trends, competition, pricing, policies, typical
consumer needs as well the needs of the manufacturer himself. The
following factors are considered, which affect the international channels:
1. Product characteristics: If the commodity is perishable or fragile, a
producer prefers few and controlled levels of distribution. For perishable
goods speedy movement needs shorter channel to route of distribution. For
durable and standardized goods longer and diversified channel may be
necessary. For custom made product, direct distribution to consumer or
industrial user may be desirable, for technical product requiring specialized
selling and serving talents, the shortest channel would be preferable.
2. Consumer characteristics: For consumer market, retailer is
essential, whereas in industrial market it is not needed. If the market size
is large, we have many channels, whereas in a small market direct selling
may be profitable. For highly concentrated markets, direct selling is enough
but for widely scattered and diffused markets, many channels are required.
The size and average frequency of customer's orders also influence the
channel decision.
Market segment on the basis of age, income group, sex, vocation
etc. have to be considered for target market. Buying habits of customers
and dealers will also influence our channel choice.
3. Middlemen: Middlemen or intermediaries who can provide wanted
marketing services, will be given first preference, provided they must be
available. The selected middlemen must offer maximum cooperation
particularly in promotional services. They must accept marketing policies
and programmes of the manufacturers and actively help them in their
implementation. The channel generating
the largest sales volume at lower unit cost Factors Affecting
will be given priority to minimize International Channels
distribution cost. 1. Product characteristics
4. Company: The company’s size 2. Consumer characteristics
determines the size of the market, the
size of its larger accounts and its ability 3. Middlemen
of getting middlemen's cooperation. A big 4. Company
firm may have shorter channel. The 5. Marketing environment
company's product mix influences the 6. Competitors
pattern of channel. If the product mix has 10.Leasing
greater depth or specialization, the