lesson 10: export distribution channels

Question 1

• Involves all the activities concerned with the transfer of goods from the manufacturers to the consumers.
• Its aim is to ensure the availability of products to people who want these items whenever and wherever they want to acquire them

Answer 1

DISTRIBUTION

Question 2

• Deals with trade contracts and the choice of wholesale and retail channels that involve finding good markets and demand stimulation
• This is often referred to as the marketing channel of distribution, or simply, the marketing and trade channels
• This export distribution set-up appears complicated when compared with the commercial distribution system in the domestic market because the former involves a variety of middlemen and intermediaries before the goods reach the end-consume

Answer 2

COMMERCIAL DISTRIBUTION

Question 3

• Deals with the problem of space and time, specifically how to effect the transport and storage of goods

Answer 3

PHYSICAL DISTRIBUTION

Question 4

Refers to the sale in the foreign market by the manufacturer himself. A manufacturer does not use any middlemen in the channel between the home country and overseas market. Following figure shows direct exporting channels.

Answer 4

DIRECT EXPORTING

Question 5

• Through this method, you may gain a lot of firsthand experience in exporting and get the highest return on profit
• The only disadvantage of this method is the high risk and cost involved

Answer 5

DIRECT EXPORTER SALES

Question 6

• Means relying on imports and commission agents both here and abroad who, in turn, distribute or serve major buyers directly.
• Indirect exporting refers to the transfer of the selling responsibility to other organization by the manufacturer.

Answer 6

INDIRECT EXPORTING

Question 7

This type demands a lot of flexibility on the part of the exporter and is considered low cost and low risk
- However, it provides very little or insignificant experience in the market as well as low returns

Answer 7

INDIRECT EXPORTING

Question 8

the most widely used form of shipment in international trade, being the cheapest mode of transportation for delivering large quantities of goods over long distances

Answer 8

OCEAN FREIGHT

Question 9

• These ships belong to a line which is a member of a shipping conference

Answer 9

CONFERENCE LINE VESSELS

Question 10

are groups of shipping lines bound together for the purpose of adopting common rules and regulations

Answer 10

conferences

Question 11

These ships are operated by shipping companies that offer scheduled services but quote freight rates independently from one another

Answer 11

non-conference vessels

Question 12

These ships do not follow regular routes but travel where cargoes are available

Answer 12

tramp ships

Question 13

• These ships can be hired to transport products for a particular purpose or time
• The most commonly used type of shipping is via the conference line vessels

Answer 13

charter ships

Question 14

• Mostly depend on the nature of goods shipped, the weight or volume of the goods, and the destination

Answer 14

ocean freight rates

Question 15

• Surcharges such as currency adjustment factor, bunker adjustment factor, container service charge, port congestion surcharge, war risks, arbitrary charge, etc.

Answer 15

BASIC RATE PER CUBIC METER OR METRIC TON

Question 16

• Shipments weighing ______ becomes uneconomic to go by air freight.

Answer 16

more than 500 kg

Question 17

• Packages that are ______ can economically go by courier (express freight

Answer 17

lighter than 150 kg

Question 18

• Is an article of transport equipment which is single, rigid, non-disposable cargo box, ventilated, insulated, reefer, flat rock, vehicle rack, or open top with or without bogies and attached not less than twenty (20) feet in length, and having a closure or permanently hinged door that allows ready access to the cargo

Answer 18

freight container

Question 19

Implies that the shipper will have a container at his/her disposal and that he/she will normally have enough cargo with which to fill the container

Answer 19

FULL CONTAINER LOAD (FCL)

Question 20

This implies goods in any quantity intended for carriage in a container, but the goods are delivered to the carrier for containerization

Answer 20

LESS CONTAINER LOAD (LCL)

Question 21

A good choice for goods which are highly perishable and valuable

Answer 21

AIR TRANSPORT

Question 22

• is typically handled by one company (like DHL, UPS or FedEx) that manages the entire shipment lifecycle, with shipping from door to door in under five days. These express air freight shipments are usually smaller (less than one cubic meter and 200 kilograms) than air freight.

Answer 22

EXPRESS AIR FREIGHT