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You are here: Export Marketing > Export Marketing channels > physical distribution  
Physical distribution

From market entry to physical distribution

Let us assume that you have decided to make use of an import agent or import distributor to market your goods in the foreign marketplace. Your next challenge is to decide how you will physically move the product to your customer (i.e. the distributor or a customer identified by the agent – remember the agent is not a customer it is own right). What you need to consider here is how you will physically move the product from your factory to the buyer’s designated premises. This physical movement of the goods can be further broken down into three stages of transportation and you need to make in decision about each of these stages.

You will need to decide (a) about the movement of goods within South African (from factory to port (seaport or airport, unless you are moving the goods into Africa, in which case you may use a road hauler or Spoornet),(b) the movement of goods between countries (generally by sea or air, unless, again, you are moving the goods into Africa, in which case you would probably use road or rail rather than sea or air transportation depending on where you are sending the goods), and, finally, (c) the movement of goods within the target market (probably by rail, road or river transportation).

You decisions will impact on your marketing effort in that you may have to pack and package your goods differently if they going by sea freight versus airfreight. Similarly, containerised cargo will require a different approach to break bulk cargos. Not only will your packing and packaging be affected, but the cost of your choice of mode of transportation is likely to vary considerably. Airfreight, for example, is much more expensive than sea freight. Furthermore rail versus road freight costs are likely to vary as well. Not only are costs likely to vary, but delivery time as well. Air freight, while more expensive, is much quicker than sea freight. In some countries, only road freight will bring your goods to its designation – you won’t have an option.

The physical distribution is a key marketing challenge

Distribution is one of the core elements of the traditional marketing mix (which looks at the product, its price, its promotion and its distribution). As such, it is essential that you give careful thought as to how you plan to move the product from your factory to your customer. You also need to be aware that your customer is not always the end-user. If you sell your product to an import distributor, for example, the distributor may on-sell the product to one or more wholesalers, who may each sell the product to several retailers, who, in turn, eventually sell the product to hundreds or even thousands of end-users (the final customers).

One the one hand, as a marketer you may have limited control over the marketing channel and the physical distribution of your goods. Yet all of these activities – which are out of your control – may impact on your marketing success. If any of these channel members provide poor service or fail to promote your product properly, you will almost certainly loose sales and you could fail with your exports, as a result. So what do you do?

The distributor is not likely to introduce you or give you a list of his/her customers – he/she will be concerned that you will try to sell directly to the customer thereby by-passing them. So it is unlikely that you will be able to make direct contact with any of these additional channel members and, in any case, there may be tens or even hundreds of such channel members and you won’t have the resources to get to talk to each of them. Instead, you may want to create some support material that is designed to help the channel member promote your product and advise their customers (and potential buyers of your products) about its unique features and benefits, as well as providing information about possible after-sales care. Similarly, you should prepare any product information and guides that are packed with the product in such a way that they will help the end-user put the product to proper use. This may not even cost you a lot, but taking a little bit of extra care in designing and creating effective support material (for sales staff and for end-users) could have a major impact on your sales success.

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Learning to export... The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
Step 16: Handling the export logistics
Step 17: Export documentation
Step 18: Providing follow-up support
Step 19: Getting paid
Step 20: Reviewing and improving the export process
Step 21: Export Management
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