ENTRY TO OVERSEAS MARKETS

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. Expo rting Direct Exporting Indirect Exporting

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

WHY INDIAN EXPORTERS TAKE RECOURSE TO DIRECT EXPORTING DIRECT EXPORTING BY INDIAN EXPORTERS IMPROVE EXPORTERS IMAGE IN DOMESTIC MARKET EXPORT INCENTIVES

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

FORMS OF INDIRECT EXPORTING MIDDLEMEN IN INDIRECT EXPORTING EXPORT MARKETING MIDDLEMEN CO-OPERATIVE EXPORT TRADING ORGANISATION

EXPORT MARKETING MIDDLEMEN 1. Merchant Exporter or Export Houses 2. Export Commission Houses 3. Visiting or resident buyers 4. Manufacturer’s export agent 5. Export Broker 6. Buying govt agency in exporting country 7. Govt Buying agency for export 8. Piggy-backing

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