International Marketing Strategy: Effective Distribution and Channel Management

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 between and within local industrial and consumer markets is of great importance. A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for consumption. Globalization of markets and reorganization of distribution are mutually dependent processes that involve changes in market structures. (Mattsson & Wallenberg, 2003) As national markets expand and as new opportunities arise for satisfying consumer demand, greater specialization in distribution is evident both in the level of distribution and in goods and services handled (Mallen, 1996). Moreover, as the global marketplace expands, many multinational firms have been influenced by mounting pressures to develop a worldwide communication, distribution and information network that facilitates the free flow of information and goods across national boundaries (Min & Eom, 1994). Distribution channels excellence has become a powerful source of competitive differentiation. In the 1980’s and 1990’s, companies began to view distribution channels as more than simply a source of cost savings and recognize it as a source of enhancing product or serve offerings as part of the broader supply chain