Session5 Flashcards
When a company wants to dynamite its sales 2 possibilities
- distribution contract
- agency contract
Distribution contract
Contract based on sale: find companies which will be ready to buy its product to resell them
Sales of good contract + distribution contract
The one bearing the risk in the distribution contract
The distributor =wholesales, retailers
Agency contract
There are:
A principle
The representative
Representative
Selling on behalf of the principle
In charge of finding clients for the benefit of the principle (manufacturer)
Contract based on representation
The one bearing the risks in agency contract
Manufacturer
Diff between the eu and the us in terms of distribution contract
Companies have to set up a diff strategy in setting in the eu market or us market
Distribution network
Many distribution contracts
In europe distribution contract
Distributor = economic entity diff from manufacturer
—> not allowed for the manufacturer to impose prices for the resale to its distributor (free price policy)
If manufacturer wants to impose prices :
representation contract
When companies want to test a new market
Can use a self employed commercial agency contract : advice of the agent + take control of the price policy
Self employed commercial agency contract
Commissions on the sales
If the test is positive
Can decide to set up theor own unit
Eu legal order rules
Has an impact on the strategies developed by manufacturers
Common points betw distribution and agency contracts
Based on the will to promote the brand image
A trade mark
Not a warranty of quality
Diff from labels
Warranty of origin