Methods of exporting to new markets.

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METHODS OF EXPORTING

Presented by:-

Yashh Berry – 6

Aafreen Contractor – 12

Shalabh Hirawat – 17

Radhika Kajaria – 24

Nidhi Parikh – 39

Jahnavi Vaishnav - 55

Introduction

Entering a new market is one of the most important decisions a company will make. Deciding upon its entry method may depend upon its success or failure. There are many different market entry methods, and this is complicated further by considering different international markets. The entry method will determine the level of involvement in international markets. Entry methods range from simply making the products available to export, if anyone is willing to do so, to the furthest extreme when your most important market is outside your domestic market.

Direct Exporting

Companies who take a more direct approach to exporting may choose to transport the goods into a foreign market themselves. This proactive approach gives the company greater controls on issues such as the finished product, the selling and marketing methods used and the markets it wishes to enter. It is a long term strategy that can produce higher profits, as third parties are less involved or not at all. It gives the exporter a great deal of information about the processes involved and the markets it is entering. They can therefore quickly adapt products to market changes. It also allows relationships to be built directly with the customer, and maybe even the consumer.

Although the advantages are obvious, this method requires definite long term commitment, due to the costs, time, effort and resources it takes up. Tariff barriers may dramatically increase your costs, quota systems may limit your exporting potential and additional taxes, are just a number of systems that protect the domestic company. Personnel experience is essential, and even a change in organisational structure is recommended “to support more complex functions”. Choosing the right channels to use could also have a dramatic effect on the success of your exports. These channels include:

  • Domestic Export Departments
  • Foreign Based Distributors and Agents
  • Foreign Sales Branch

Companies will probably choose to use a number of different strategies, depending on each market they decide to enter. Most companies will have their own domestic export department, regardless of other methods used.

Procedures for Direct Exporting

Decide whether you want to sell directly to final foreign buyers yourself or through an import agent or to a foreign distributor located in the target market

1. Prepare literature about your company and products that would be suitable for your exporting activities.

2. If selling direct to final foreign buyers yourself, arrange for promotion campaign (direct mail, trade shows, advertising foreign visits, The Internet etc.) and develop a list of sales leads.

3. Begin sending letters, etc. to prospective customers and following up sales lead.

4. If selling through agent or distributor, begin search for 
suitable agent or distributor in each foreign market.

5. Select agent or distributor

6. Negotiate and sign agency or distributorship agreement.

7. Fill orders, as and when received.

8. Monitor performance of agent or distributor.

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Advantages

  • Greater profits: Your potential profits are greater because you are eliminating intermediaries.
  • More control: You have a greater degree of control over all aspects of the transaction.
  • Absence of middlemen :You know who your customers are. Your customers know who you are.  They feel more secure in doing business directly with you. Your business trips are much more efficient and effective because you can meet directly with the customer responsible for selling your product.
  • Direct feedback: Your customers provide faster and more direct feedback ...

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