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Exporting, How ? Export through representatives (reps) Licensing, franchising Sales office abroad Co-operation agreements Contract manufacturing and sub-

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Presentation on theme: "Exporting, How ? Export through representatives (reps) Licensing, franchising Sales office abroad Co-operation agreements Contract manufacturing and sub-"— Presentation transcript:

1 Exporting, How ? Export through representatives (reps) Licensing, franchising Sales office abroad Co-operation agreements Contract manufacturing and sub- contracting abroad Joint enterprise, joint venture Project export Manufacturing abroad By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

2 Export through Reps Representative –Someone “working” for you. (S)he gets paid, compensated after the work is done… –External person or organisation, who however, is not employed or owned by the manufacturer –Typically used by small and medium size companies and by large companies working in small markets By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

3 Representative types => someone “working” for you, gets paid after the work is done Agent (exclusive / non- exclusive) –does the background marketing work for you –will get monetary compensation of the made contracts –does not have the authority to make - your - legal contracts with the Customer (except when specially authorized) Distributor (exclusive / non-exclusive) –buys and sells in his own name based on a representative agreement Wholesaler, export broker, jobber –buys and sells at his own price without a representative agreement By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

4 Export through Reps Advantages +Prompt use of local language & cultural skills, market know-how and customer base is readily existing => Speedy +Possibility to use “local” image and brand (you as a newcomer, are unknown, …building of trust, networks…) +Small economical risk +No need to bind extra persons or “much” money => Cheap +Possibility to test products & operations before possibly building your own sales organisation in the area. +In the beginning, reps are active, “ eager”& ”hungry”,...later ? +Before selection, reps give abundant info, - after selection - …scarce, biased info… +New INFO: international market/product/competition (x-check !) +Your company / personnel will get on the “learning curve” …(concrete & abstract learning)… By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

5 Export through Reps Disadvantages / =>...after selection... –Info feedback from the customers is meagre –Representatives optimise the sales for them- selves, not for the principal –Product compete with other principal’s products –No long term investments, sells for short term profit =>...“quick decisions”... –Interest in principal’s product may collapse –Too good sales frightens the agent (= your possible market takeover) –When the representative goes, also market knowledge and customer contacts goes with him –In many countries, agent legislation protects the agent, making termination & restart difficult By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

6 Representative selection Representative search Comparison of potential candidates by acquired information (& credit info !) Selection of 2-4 candidates Interviews Selection Agreement Good luck By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

7 Representative search, sources: Internet - country information, “Compass”, trade/company directories Finpro (in Finland), local companies who do business there Euro info centre Shows, fairs, conferences Customers, Co-operation partners, own network, friends Embassies/ Consulates (Own/foreign) Banks, Chamber of Commerce, Trade/ Intern. organisations Leisure organisations - lions, rotary, expatriate clubs Advertisement in magazines / Trade journals Consultants By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

8 Representative selection contact them & get info Facts, contact details, turnover, No. & level of personnel, credit info History, ownership, own manufacture, import/export… Current operations, area coverage / branches, future plans… Customers, profiles, % of each segment… Other principals, products & sales / product range… Market information, size, trends, competitors… Their contact network & Branch / product know-how… Their estimate about the sales & work needed Get …deeper and deeper info, …x-checking… Overall impression, “gut feeling”, intuition, chemistry… By courtesy of: Dir. Matti Tervaskanto / Noptel Oy

9 Starting with representative Creating co-operation relationship Compare : …“Marriage”… BUT, someone “working” for you, who gets paid after the work is done… Understand cultural factors Provision / compensation politics Marketing support & info feed-back Training Storing, service Pricing Country visits min. 2-3/yr. & Reps company visits By courtesy of: Dir. Matti Tervaskanto / Noptel Oy


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