Professional Documents
Culture Documents
2 Direct Export
Manufacturer
or exporter sells
directly to an importer or buyer
located in the foreign market area.
This proactive approach gives the
company greater controls on issues
such as the finished product, the
selling and marketing methods
Continued
The
Continued
i. Product
ii. Place
iii. Promotion
iv. Price
v. Process
vi. People
vii. Physical aspects
Continued
Continued
3.2.1
HOMECOUNTRY
BASED
DEPARTMENT
3.2.2
FOREIGN
SALES
BRANCH
3.2.3
STORAGE OR
WAREHOUSE
FACILITIES
3.2.4
FOREIGN
SALES
SUBSIDIARY
3.2.5
TRAVELING
SELASPERSON
3.2.6
FOREIGN-BASED
DISTRIBUTORS
&
AGENTS
(REPRESENTATVES)
Continued
3.2.2
3.2.1
HOME-COUNTRY
BASED DEPARTMENT
(i)
Built-in
Department
(ii)
Separate
Export
Department
(iii)
Export Sales
Subsidiary
Continued
Small in size;
New or relatively new to export
marketing;
Expected foreign sales volume is
moderate to small;
Management philosophy not oriented
toward growth of foreign business;
Company resources are limited.
Continued
Advantages:
provides unified control;
profit center;
can more easily allocate orders and
COMPARISON
Built-in
department
Organizations
structure
simplest
Separate
export
department
complex
Export sales
subsidiaries
Conflicting
pressures
high
high
low
Independent
degree
dependent
independent
quasiindependent
profitability
low
medium
high
Ease of
financing
difficult
easy
easiest
Financial
control
none
moderate
high
much more
complex
Advantages
Disadvantages
Built in
Department
simple in structure
easy to establish
flexible and economical
use
problems in getting
support
from other units and in
carried out technical
functions.
Separate Export
Department
Export Sales
Subsidiary
unified control
profit center
ease of financing
wider products line
Serious involvement in
international trade.
a. Primary purpose:
Closer supervision of foreign
sales by manufacturer in home
country.
b. Secondary purpose:
A foreign facility for
manufacturer to display its
product line (Display center).
Responsibility:
i.
ii.
Continued
iii. Product quality
(national/international)
standard, development stage
(first/second generation,
low/high tech.)
iv. Computer & logistically literate,
importer/exporter adaptability &
flexibility
Continued
v. Exchange rate stability, importation cost
Continued
viii. Investment inward (joint
ventures, franchising, licensing,
M & A, etc)
ix. Local government & financial
environment (employment law,
taxation, incentives, trade zones)
x. Perceived benefits of the market
Continued
v. Fully utilization of company resources
& infrastructure
vi. Increase market share & dominance,
being a marketing led company
vii. Increase companys competitiveness,
wide range of products offer
locally/internationally
viii. Long-term plan, develop a proactive
company that globally focused &
market driven environment
Continued
ix. Develop an international brand image
personnel, product, commitment
x. Use available techniques in all areas of
company operations
xi. Membership of trade associations and
accreditation
xii. Increase profit and ROI
Continued
v. Maintain control over marketing
strategy
vi. Detailed market and financial
performance data
vii. Networks with national
distributors
viii. Assess how it performs relative
to customers expectations