International Trade Intermediaries
Part 6. International Marketing
Published Online: 15 DEC 2010
Copyright © 2011 John Wiley & Sons, Ltd. All rights reserved.
Wiley International Encyclopedia of Marketing
How to Cite
Ellis, P. D. 2010. International Trade Intermediaries. Wiley International Encyclopedia of Marketing. 6.
- Published Online: 15 DEC 2010
International trade intermediaries (ITIs) are specialist intermediaries involved in the management of international trade. This service either involves an agency-brokerage or a merchant-reselling role. ITIs are ubiquitous in global markets and are one of the most enduring organizational entities in the history of international business. Acting as agents, ITIs exist because manufacturers sometimes lack the ability or the incentive to engage in exporting directly. However, manufacturers may hesitate to contract with independent intermediaries because of the threat of opportunism. The circumstances under which manufacturers would prefer ITIs to in-house exporting can be predicted using transaction cost analysis, which describes the matching of exchange characteristics with particular exchange modes or governance structures. Acting as merchant resellers, ITIs create new markets for goods and services by developing exchanges between buyers and sellers located in different nations. In developing these links, the ITI may also transfer marketing skills to others in the channel. Although ITIs improve the efficiency of exchange and entrepreneurially create markets where none existed previously, their survival within cross-border channels of distribution is inherently impermanent. The information asymmetries that give ITIs their “edge” in a market tend to diminish over time, undermining their position in the channel.
- international trade intermediary;
- indirect exporting;
- distribution channels;
- information asymmetry