International Marketing Strategy: Effective Distribution and Channel Management

Better Essays
1.0 Background For most manufacturers, success or failure is determined by how effectively and efficiently their products are sold through their marketing channel members (e.g., agents, wholesalers, distributors, and retailers). Given this situation, considerable marketing channel research has focused on organizational responsibility for managing channel how interrelationships among a firm and its channel members can be managed better (Achrol and Stern 1988; Anderson et al 1997). Globalization of markets is a phenomenon that has received much attention and been extensively debated both at general societal/institutional/cultural levels and at market and business levels. In any globalization process, distribution of goods and services…show more content…
1.2 Distribution channel intensity Another channel strategy according to Jobber (2001) is the intensity of the distribution channel. According to Kotler (2000) and Fein and Anderson (1997) companies have to decide on the number of intermediaries to use at each channel level. Three approaches are available: intensive distribution, selective distribution and exclusive distribution. Mallen (1996) states that intensive distribution is at one end of the scale where the policy is to distribute to as many outlets as possible, and that exclusive distribution is at the other end of the scale, where the policy is to distribute only to one intermediary at a given level in a given geographic area. The broad middle ground is normally referred to as selective distribution. Intensive distribution consists of the manufacturer placing the goods or services in as many outlets as possible. This approach is generally used for everyday goods such as milk, bread, tobacco products and soap, products for which the consumer requires a great deal of location convenience. Manufacturers are constantly tempted to move from exclusive or selective distribution to more intensive distribution to increase coverage and sales. Intensive distribution may help in the short term but often hurts long-term performance. (Kotler, 2000) According to Mallen (1996) intensive
Get Access