Infrastructure Issues in Channels

The marketer’s desire to establish a distribution channel is often complicated by what options are available to them within a market. While in the planning stages the marketer has an idea of how the distribution plan should be executed, the organization may find that certain parts of the distribution channel may not be what they expected. For example, a supplier of high-end, specialty snack foods may find a promising target market for their products is located in a mountain ski area in Colorado. However, the company may also discover that no suitable distributor in that area possesses the required refrigerated storage space that is necessary to store the product in the proper way specified by the marketer.

This concern is even greater when a marketer looks to expand into international markets. Marketers often find the type of distribution system they are used to employing is lacking or even nonexistent (e.g., poor transportation, few acceptable retail outlets). In fact, depending on the type of product, a marketer could be prevented from entering a foreign market because there are no suitable options for distributing the product. More likely, marketers will find options for distributing their product but these options may be different, and possibly inferior, from what has made them successful in their home country.  While viewed as risky, companies entering foreign markets often have little choice but to accept the distribution structure that is in place if they want to enter these markets.