International distribution

Distribution decisions

Distribution decisions are crucial part of an internationalization of a product. The 11C's need to be considered when deciding the distribution channel:

1. Customer characteristics
2. Culture
3. Company objectives
4. Competition
5. Character of the product
6. Capital required
7. Costs
8. Coverage
9. Continuity
10. Communication
11. Control

These all have a great effect on the decision of choosing the right distribution channel for the particular product. You need to know where people would normally buy such a product, how they buy it and when they buy it. Customer characteristics can be found through demographics, geographics, psychographics, behavioristics and linguistics. You also need to know the company objectives and how much money is allocated for the internationalization of that product to see which channels are fitting. The selection of a distribution channel is so very important because it is a long-term commitment and if selection fails, it can damage the image of that product severely.  

For example in Finland make up can be found through several different distribution channels, such as supermarkets (K-Citymarket, Prisma), department stores (Sokos, Stockmann), specialist shops (Kicks) and natural product boutiques. Each of these are very different in the selection of make up they provide. Supermarkets have the cheaper, daily cosmetics such as L'Oreal, Max factor, Isadora, Lumene, etc. in their range. Department stores often have the widest range with high end make up such as Dior, L'ancome, Chanel, etc. as well as the daily cosmetics mentioned earlier. The specialist shops often focus on the high end luxury cosmetics, but also carry some daily cosmetics in their range as well as natural cosmetics. The natural product boutiques usually carry one or two different natural cosmetics lines in their product range. So you can see that going into a supermarket to sell luxury or natural make up could be a huge mistake. People perceive these places as cheaper places to buy cosmetics and the value of your brand could be totally diminished by going into such a distribution channel with a high end product.  
Just a little fun picture question. Can you spot the difference. Which of these is a high end make up brands photo and which is a daily cosmetics brands photo?