Combination of Company Owned Marketing Subsidiary and a Distribution Model

If domestic markets were large enough, most companies will prefer to remain domestic with their products rather than going abroad. Thus business would be safer and easier for managers would not need to learn another country’s language and culture, laws, face legal and political uncertainties, deal with volatile currencies or redesigning their products to suit the needs and expectations of different customers. But yet, several reasons such as competition, high profit opportunities, economies of scale and risk reduction draw companies to go international though they may also face some marketing challenges in the foreign markets. Designing and operating a distribution model is very essential for manufacturers who must ensure that their products get to their intended end consumers at the right time, right shape and right place. A well designed channel must take into consideration the nature of the product portfolio and must be constantly adjusted to meet the vast and dynamic needs of customers. Note, distribution channels themselves are somehow also seen as products. Just as manufacturers would pay attention in handling their products, attention too should be placed on channels if channel must thrive or be different from others. How a combination of company owned subsidiary and a distribution model operates, how to use these models in distributing products in a country with low standards of living (developing county for instance) or countries with low/high GDP,GNI, HDI etc among other issues are handled depends solely on a company’s strategy. Results have shown that in countries with high GNI, high HDI, high income distribution, high disposable incomes manufacturers are capable of designing channels which could suit both complex and less complex products but may faced fierce completion due to a multitude of suppliers. On the other hand, countries with low GNI, high HDI, low income distribution, low disposable incomes; low product complexity is required (due to lack of storage devices e.g. huge refrigeration systems to handle certain complex or perishable goods) and manufacturers could easily penetrate the market due to lack of competition though huge investments are needed in ensuring that product brand is well advertized and well spread