INTRODUCTION One of the most important and critical decisions in international marketing is the mode of entering the foreign market. No country can easily accepts other country easily. An exporter can’t enter all markets with same strategies. He has to apply different strategies for different markets.
EXPORTING • Exporting means company exports the product from its home base, without any marketing or production in foreign countries.
DIRECT EXPORTING Direct Exporting is the method in which whole activity is done by the exporter himself. He himself undertakes all the activities instead of any help from any agent.
ADVANTAGES • Better knowledge of customers’ requirements • Goodwill • Full Control • Full returns on exports • Permanancy • Full knowledge of market conditions • Short Chain of Distribution • Proper choice for certain products • Dedicated staff
DISADVANTAGES • More capital needed • Managerial ability essential • Increased distribution cost • More risky • Other limitation
FORMS OF DIRECT EXPORTING • Establishment of Branches Abroad • Establishment of plants • Licensing Arrangement • Joint Venture • Appointment of exclusive Agent • Distributor • Strategic Alliance • Mergers and Acquisitions • Contract Manufacturing • Assembly
INDIRECT EXPORTING • Indirect export means export of product or services through middlemen. Firm sells its products to some other firm or person in the country which further sells them in foreign country.
ADVANTAGES • Free from botheration • No Need of export organisation • Economy • A boon to new entrants • Valuable market information
DISADVANTAGES • Ignorance about foreign trade • No scope for product development • Inappropriate in certain cases • Availability of middlemen • Commission to middlemen • No obligation to any manufacturer • No efforts to promote exporter’s product • No permanency of business
EXPORT MARKETING MIDDLEMEN • Merchant Exporter or Export Houses • Export Commission Houses • Visiting or resident buyers • Manufacturer’s export agent • Export Broker • Buying govt agency in exporting country • Govt Buying agency for export • Piggy-backing