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International Distribution
Instructor: Dr. IRFAN BUTT
International Marketing
Entering International Markets
ExportingExporting LicensingLicensing Management Contracting
Management Contracting
JointVenture
JointVenture
DirectInvestment
DirectInvestment
Generally increasing investment, risk, and control of marketing
International
DistributionLocal Distribution
What is a Distribution Channel?
The chain of individuals and organizations involved in getting a product or service from the producer to the consumer.
Distribution channels are also known as marketing channels.
Common marketing channels for consumer goods and
services
What is the difference between Local and
International/Global Distribution?
To better understand the distribution system used in a foreign country, marketers must never assume it is
the same as what they practice domestically, For example,
In Italy, many small retailers specialize in different brands and product lines,
In Finland, most retailers do not specialize in products and services
Distribution Patterns
Retail size has a direct impact on how to distribute. In some markets company’s may sell to
large, dominant retailers directly,
Whereas in other areas there are mainly small retailers
Distribution Patterns
What is the
Middleman?
Located in the firm’s home country and provide marketing and distribution services from a domestic base. The companies delegate foreign-
market distribution to others such as: manufacturer global retailers trading companies export management companies
Home Country Middleman
Functions of Export Management Company
Difference Between Export Management Company (EMC) &
Export Trading Companies (ETC)
Home-country middlemen are most helpful for companies with small international sales volumes, inexperienced in foreign markets, who do not want to get too involved
with the complexities of international marketing.
Home Country Middleman
For greater control over the distribution process, foreign-country middlemen are hired. Can be: Manufacturer reps
Foreign distribution companies
Advantage create a shorter channel for the company
and have more market expertise.
Foreign Country Middleman
Advertising in trade magazines with an international readership
Export trading company or an export agent
Local Government’s Export Development Authority
Online Search
How to Find an Overseas Distributor
What is the Difference between
Agent & Distributor?
Agents usually represent a company in the local market.
Don’t take ownership of the goods. Are paid a sales commission,
salary, retainer, or a combination of all three.
Charge for the costs incurred by them.
Agent
In most cases a distributor buys product from firms and sells to their customers, adding a margin or setting their own price.
They may import and hold stock of your product and may also help promote it and provide after sales
service for customers.
Distributors tend to concentrate on products that are the easiest to sell and/or have the
highest margins.
Distributor
Export Management Company acts as an Agent or Distributor
Exporting and Logistics
Export and import documents Tariffs & quotas The rules and regulations that cover the
exportation and importation of goods and their payment
Other barriers to the free flow of goods between countries
What Should be Known
The Exporting Process
Exporting Restrictions• Export regulations may be designed
• To conserve scarce goods for home consumption
• To control the flow of strategic goods to actual or potential enemies.
• To comply with various regulations,• the exporter may have to acquire export
licenses or permits from the home country
Import Restrictions• Import regulations may be imposed
• to protect health,
• conserve foreign exchange,
• serve as economic reprisals,
• protect home industry, or
• provide revenue in the form of tariffs
Import Restrictions• Canada
• Firearms and Weapons• Goods manufactured by prison labor• Used or second hand motor vehicles• Second hand mattress• Food, plant, animal
Import Restrictions• The most frequently encountered trade
restrictions include: Tariffs Exchange Permits Quotas Import Permits Standards Boycotts and Embargoes Voluntary Restrictions
Tariffs Taxes or Custom duties, which are levied
against goods imported from another country. They are based on value or quantity or a combination of both and are classified as follows: Ad valorem duties,
based on a percentage of the determined value of the imported goods
Specific duties, a stipulated amount per unit weight or some other measure
of quantity A compound duty,
combines both specific and ad valorem taxes on a particular item, that is, a tax per kG plus a percentage of value
Exchange Permits To conserve scarce foreign exchange
many countries impose restrictions on the amount of their currency they will
exchange for the currency of another country
Quotas Countries may also impose limitations
on the quantity of certain goods imported
during a specific period
Import Permits As a means of regulating the flow of
exchange and the quantity of a particular imported commodity, countries often require import licenses
Standards Standards that are necessary to protect
the consuming public and to comply with local laws Health standards Safety standards Product quality
Public Authority for Consumer Protection in Oman
Boycotts and Embargoes A boycott is an absolute restriction against
trade with a country, or trade of specific goods.
An embargo is a specific government order that imposes a ban on trade with another country. An embargo is more specifically related to
government actions compared to a boycott.
Voluntary Restrictions Countries may themselves impose
restrictions on firms exporting to specific countries
Terms of Sale
CIF (Cost, insurance, freight) Seller pays for cost, insurance, freight
to a named overseas port of import, including the costs of goods, insurance, and
all transportation and miscellaneous charges to the place of debarkation.
C&F (Cost & freight) Seller pays for cost and freight to a
named overseas port, including the cost of the goods and transportation costs to the
named destination. The cost of insurance is borne by the
buyer.
FAS (Free Alongside) Seller brings it to a named port of
export, and pays for cost of goods and charges for delivery of
the goods alongside the shipping vessel. The buyer is responsible for the cost of
loading onto the vessel, transportation, and insurance.
FOB (Free on Board) Seller brings it to a named port of
export, and pays for cost of goods and charges for delivery of
the goods alongside the shipping vessel, and cost of loading onto the vessel.
The buyer is transportation and insurance.
Terms of Sale
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