How can you choose the right distribution channels for your international marketing strategy?

1 Market potential

The first criterion to consider is the market potential of each distribution channel. Market potential is the estimated size, growth, and profitability of the market segment that you can reach through a specific channel. You want to choose a channel that can access a large and lucrative market segment, while avoiding channels that are saturated, declining, or unprofitable. To assess the market potential of each channel, you need to conduct market research on the following aspects: the demand and supply of your product or service, the customer profile and behavior, the competitive landscape, the legal and regulatory environment, and the cultural and social factors.

2 Customer preferences

The second criterion to consider is the customer preferences of each distribution channel. Customer preferences are the expectations and needs of your target customers regarding how they want to buy your product or service. You want to choose a channel that can meet or exceed your customer preferences, while avoiding channels that are inconvenient, unsatisfactory, or incompatible. To understand the customer preferences of each channel, you need to collect feedback from your existing or potential customers on the following aspects: the product or service attributes, the price and value perception, the promotion and communication methods, the delivery and after-sales service options, and the trust and loyalty factors.

3 Channel capabilities

The third criterion to consider is the channel capabilities of each distribution channel. Channel capabilities are the skills and resources of your channel partners, such as intermediaries, agents, or distributors, that can help you achieve your marketing objectives. You want to choose a channel that can provide you with high-quality and reliable channel capabilities, while avoiding channels that are low-performing, unreliable, or incompatible. To evaluate the channel capabilities of each channel, you need to analyze the following aspects: the channel partner profile and reputation, the channel partner goals and incentives, the channel partner training and support, the channel partner performance and feedback, and the channel partner relationship and commitment.

4 Channel costs

The fourth criterion to consider is the channel costs of each distribution channel. Channel costs are the expenses and risks involved in using a specific channel to deliver your product or service to your customers. You want to choose a channel that can minimize your channel costs, while maximizing your channel benefits. To calculate the channel costs of each channel, you need to consider the following aspects: the fixed and variable costs of setting up and maintaining the channel, the opportunity and transaction costs of using the channel, the risk and uncertainty costs of depending on the channel, the control and coordination costs of managing the channel, and the adaptation and innovation costs of changing the channel.

By applying these four criteria, you can choose the right distribution channels for your international marketing strategy, and optimize your market entry and expansion in foreign markets.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?