FACTORS AFFECTING CHOICES OF CHANNELS TO USE IN INTERNATIONAL MARKETS:-
International marketing channels deal with channels within which goods and services pass to reach their foreign consumers. This implies that manufacturers and consumers must be located in either the manufacturers or consumers country or having presence in both countries. The choice of the channel to use is a fundamental decision for the manufacturer where a number of factors and objectives have to be considered as a basis for such decision. The Factors Affecting Choices Overall marketing objectives:-
The choice in this case will be based on the overall marketing objective if wide spread distribution in the foreign market and the objective then, the use of many channel members is inevitable, however if it is to ensure quality, the objective will be to use selective distribution through specialized channel members. Nature of the products:-
This looks at product characteristics, perishable products need faster means to avoid product deterioration, and bulk product need slow and cheaper means, products that need installation and maintenance may need skilled channel members. This will influence the choice of channels to use. Consumers location and coverage:-
Widely spread population or nation will require the use of many channel members than it would be for a concentred markets or nation. Cost of channel:- Costs must always be minimized to increase profits. It should be noted that costs vary from channel to channel hence affecting costs of goods and services differently, which also affects the margins demanded by the channel members thus increasing the price of products that pass through those channels.
Channel success factors:-
This looks at channel experience with the product in the foreign market reputation of delivering the right products and services, channel competitiveness, channel profitability, continuity ie to serve the market for a long time etc. Level of
In exclusive distribution the manufacturer will retain control over the channel members. In selective distribution the manufacturer uses a few channel members, this allows the manufacturer to adequately cover the market with more control. But with intensive distribution many channel members are carrying the products and as the channel grows longer the ability to control reduces.
Channel rights and responsibility:-
The chosen channel will have sufficient power over their activities in the selected foreign market. The more the rights and responsibilities the manufacturer retains the more he is exposed to risks in the foreign markets and vice versa. Capital requirement:-
The amount of capital required is influenced by factors like transport facilities needed, warehouses, cost of product development, quantity needed etc. This implies that the choice of channel to use is influenced by the capital requirements for an effective job to be done. In summary international marketing channels to be used by the different manufacturers world wide when distributing their products to their respective customers internationally need to be chosen carefully putting into consideration the above discussed factors which affect their choices. This should be done for the success of the manufacturers business and also to ensure customer satisfaction globally.
By A. B. Kintu B. Comm Marketing (Hons) Makerere University (2007).