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International Channels of Distribution: The Role of Centralization

Aviv Shoham, Technion-Israel Institute of Technology
Gregory M. Rose, University of Mississippi Main Campus
Fredric Kropp, Monterey Institute of International Studies

Abstract

Channel centralization -- the degree to which manufacturers report that their relationship with their channels of distribution are governed by rules and procedures of decision-making -- has been a popular topic of research. However, most studies of decision-making centralization have been conducted in the context of domestic marketing. In light of this relative deficiency in the literature, this paper has two purposes. The first purpose is methodological: a measurement scale that was developed to measure decision-making centralization in domestic marketing (Dwyer and Oh 1987, 1988) is used to measure international decision-making centralization. Its psychometric properties when used in international marketing in a sample of 98 Israeli exporters are assessed. The second purpose is substantive. We examine a number of potential determinants of international channel decision-making centralization: (1) the use of trained export salespeople; (2) the number of international customers; (3) the quality of the channel of distribution used internationally; and (4) the frequency of overseas sales' visits. Methodologically, Dwyer and Oh's four-item scale of centralization (1987, 1988) was found to be reliable when used for internationally active firms without modifications. Substantively, the diversity of international customers served, the use of trained salespeople, the frequency of overseas sales' visits, and the quality of the channel of distribution used internationally were found to affect the level of centralization used by exporters. Theoretical and managerial implications of these findings are discussed.

Suggested Citation

Aviv Shoham, Gregory M. Rose, and Fredric Kropp. "International Channels of Distribution: The Role of Centralization" Journal of Global Marketing 13.1 (1999): 87-104.