Owing to the inadequate logistics infrastructure and the extended channel systems in transitional economies, distribution intensity linked to a “push” strategy is particularly important for reaching fragmented markets (Batra, 1997). As China’s distribution networks continue to evolve, regional disparities warrant a localized approach. Unilever, for instance, successfully introduced its Wall’s ice cream in Beijing and Shanghai using different distribution systems, adapted to suit local environments. As foreign marketers move beyond coastal areas, they are likely to encounter inter-provincial rivalry, trade barriers, and local protectionism. Thus, many multinational corporations are eventually forced to treat each region separately, as they have to negotiate separate partnerships in various regions (Batson, 1996). Although the wholly overseas-owned enterprise has become increasingly popular as a mode of entry and expansion, joint efforts with strong local partners can help diffuse the risks and improve performance in less developed markets (Cui & Lui, 2000).

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