Lecture 5

Information for International MarketingExport Entry Mode

International Information Research Process

Determine Information Requirements Develop Research Plans Data Collection Data Interpretation Update databank Report presentation

Sources of Information

Web Bank Customs Forwarders Consultants

EXPORT ENTRY MODES

Indirect Export Direct Export

A. Indirect Export

When exporting manufacturer uses independent organizations located in the producer’s country. Or producer may have a dependent export organization by:

1. Using International Marketing Organizations2. Exporting thru a cooperative organization.

International Marketing Organizations

There are two types of independent wholesale marketing intermediaries:

Merchants & Agents(Title) (No title)

International Marketing Organizations

Merchants: They buy & sell on their own accounts. Trading Co’s (FTC)

Export Commission House: (Export buying agent) represantative of foreign buyers who resides in the exporter’s home country. Overseas customer’s hired purchasing agent in the domestic market of exporter. (Gets commission from buyer) It scans the exporter’s country for cheap/deals.

manufacturer gains financial/credit/payment advantages.

International Marketing Organizations

Conforming House: Conforming the orders already placed, so that manufacturer may receive payment from the conforming house when the goods are shipped.Banks FI more than that in UK.

Resident Buyer: ECH -similar to- All operations placing orders follow up, export operations, cashflow; difference is employed represantative (resident or local people).

Broker: Function is to bring the importer & exporter together. Sort of contractual function; paid by any principal.

International Marketing Organizations

Export Management Company: Is an international sales specialist who functions as the exclusive export department for several allied but non-competing manufacturer.

Manufacturer’s Export Agent: They keep manufacturer’s own identity. They get straight commissions. Less job (advertising & financial assistance)!

Cooperative Organizations

Cross between indirect/direct export.1. Piggyback marketing 2. Exporting combinations

Piggyback marketing

One manufacturer uses its foreign distribution facilities to sell another manufacturer’s products.

Companies are allied not competitive. GE+Borg Wagner to broaden product

line up. Arçelik+Siemens mobile.

Exporting combinations

A manufacturer can export cooperatively by becoming a member of some type of exporting combination.

Cooperative associations of producers or /Tarım Koop.

Export cartels when 2 or more independent biz firms in the same or affiliated fields of economic activity join together for the purpose of exerting control over a market.

B. Direct Export

Selling directly to foreign buyer.A- Home based departmentB- Foreign Sales BranchC- Storage or WH Facilities D- Foreign Sales SubsidiaryE- Traveling SalespersonF- Foreign Based Distributers & Agents / Reps.

Home based department

Built in Dept: Export manager- Actual selling + direct it. Most other XP marketing activities outsourced (advertising + logistics + credits)

Seperate Exp.Dept: Most of XP activities are handled within the Dept. itself. Complete Exp. Mn. Dept.

Export-Sales Subsidiary: To divorce from Domestic Operations one may establish an export sales subsidiary as a part of seperate corporation.

B- Foreign Sales Branch

Handles all sales, distribution & promotional work out in foreign market and sells to wholesalers & dealers (marketing org.)

C- Storage or WH Facilities

When it is profitable for a manufacturer to maintain an inventory in foreign markets, a storage & /or WH can be established. Such facilities may be part of a sales branch.

D- Foreign Sales Subsidiary

Similar to Export Sales Subsidiary in homebased department//sales branch. Difference is that they have great autonomy because of their foreign incorporation & domicile.

E- Traveling Salesperson

Who resides in one country often the home country of the employer, and travels abroad to perfrom the sales duties. May be sent to market & be a resident.

(FS Branch)

F- Foreign Based Distributers & Agents / Reps.

Profile must be checked

Gray Market Exporting

Channel conflict// known as parallel importation.

Not authorized by the exporter for a particular foreign market.

Legal importation of genuine goods into a country by intermediaries other than authorized distributers.

Authorized distributors face competition from others.