Foreign Channel and Logistics Decision
International companies either sell directly or indirectly.
Indirect selling takes place through domestic agent/domestic merchants. This is a long channel involving a number of marketing intermediaries.
International Market Intermediaries
Place/Distribution channels could be studies under:
- Direct Selling: Foreign Company develops its own overseas marketing department or foreign marketing intermediaries and sells the product in the foreign market.
- Indirect Selling: Indirect selling is through market intermediaries.
Types of Market Intermediaries
(1) Foreign Distributor: It is a foreign company having exclusive rights to distribute the company’s product in a foreign country.
(2) Foreign Retailer: It is a retailing company firm in a foreign country engaged by the distributor of the foreign country concerned to deal in and sell the products.
(3) State-Controlled Trading Company: It is a government company authorized to deal in and sell the products/services of foreign companies. For example, State Trading Corporation in India.
(3) Export Broker: It is a domestic company engaged in arranging for export of goods of domestic companies by charging a fee.
(4) Manufacturer’s Export Agent /Sales Representatives: It is a firm exclusively engaged to take up all export activities of a domestic manufacturer. This agent works for a commission.
(5) Export Management Company: This Company manages the entire export activities of a domestic company on contract.
(6) Co-operative Exporter: Manufacturers of a particular product in the domestic country form into a co-operative union to manage their export activities. This co-operative union manages the export activities of its members. Examples include GE, Singer and Borg-Warner.
(7) Web-Pomerence Association: It is an association jointly formed by two or more domestic manufacturers to export their products. It is basically an export cartel.
(8) Purchasing Buying Agent: It is an agency firm of a foreign buyer/importer. Foreign buying/ importing company appoints agents to arrange for buying products from other countries.
(9) Country-controlled Buying Agent: It is a foreign government’s agency or a quasi-governmental firm engaged in buying/importing products from other countries. This firm buys products on behalf of the government of the importing country.
(10) Resident Buyer: It is an agency engaged in buying the products on behalf of the importer. This agent locates his firm near the manufacturers in the exporting country.
(11) Export Merchant: It is a firm engaged in buying the products in the domestic country in order to export to foreign countries on its own.
(12) Export Drop Shipper: Export drop shipper is also known as a desk jobber or cable merchant. He arranges a link between the exporter and importer. He informs the requirements of the customers in a foreign country to the exporter. Exporter, in his turn sends the products directly to the importer.
(13) Export Distributor: Export distributor is granted exclusive right to represent the manufacturer in selling the product in foreign countries. He operates either in his own name or manufacturer’s name.
(14) Trading Company: Trading companies act as a link between exporting companies and importing companies.