Governance of International Distributors through Incentive Travel Programmes: Insights from Manufacturing Enterprises

Distributors are important export channels for internationally active small and medium sized manufacturers. Effective governance of these channel members is crucial for the manufacturers’ sales and marketing success. Unilateral incentive schemes represent one mechanism to govern distributors. The variety of incentives is noticeable, among them, incentive travel programmes are one possible instrument for sales managers to steer and motivate their sales partners. This paper examines how incentive travel initiatives can be designed in international business and provides an insight into their application by manufacturing companies. Based upon a literature review a schema for organizing the variety of incentives is developed and at that point travel incentives are classified within this taxonomy. Then, general design possibilities for incentive travel programmes are discussed. A qualitative study conducted within 5 manufacturing enter¬prises highlights how the design is used by Austrian manufacturers. The results suggest that the investigated companies rather use a bilateral governance approach when applying in¬centive travel programmes in order to strengthen the relationship with the distributors in the long term and not primarily to motivate them in the short run. This contradicts the common classification of incentive travel in the literature and questions the common practice of artificially separating governance mechanisms and their (unilateral or bilateral) characteristics without taking business reality into account. Finally, the study provides some insights about country and culturally specific aspects which ought to be considered when designing an incentive travel programme. The paper concludes that especially the specific nature of different countries opens a wide range of opportunities for further research in the area of channel governance through incentive travel.