Essentially, there are two main modes of exporting: indirect and direct. Figure 10.2 summarizes the particular export modes from which a company can choose. 1
Indirect Exporting. In indirect exporting the manufacturer does not undertake exporting singlehandedly. Rather, domestic intermediaries such as trading companies, export merchants, export management companies, and the like become involved in the process. Indirect exporting allows the company to get a feel for exporting without risking sizeable sums of money.
Direct Exporting. When a company operates under the direct export mode, it maintains a chain of marketing agencies that links it to the final buyers (or users) of its product in the final target market. These agencies negotiate sales transactions, direct the physical movement and storage of the product, and provide the other services necessary to get the product to the buyers. The foreign agencies participating in a direct export channel may be independent intermediaries, or they may be owned by the manufacturer. It is important for manufacturers to conceive of the export channel as the full marketing channel rather than as a channel that stops with the foreign distributor or agent.
A foreign agent is an independent intermediary who represents the manufacturer in the target country. The agent does not take title to the manufacturer's goods and seldom holds any inventory or extends credit to customers.
A foreign distributor is an independent merchant who takes title to the goods and then resells them to other intermediaries or final buyers. The distributor also holds inventory, does promotion, extends credit to customers, and delivers and services the product. (See Table 10.1 for sources of distributor leads.)
|
Country and regional business directories such as Kompass (Europe), Bottin International (worldwide), Nordisk Handelskalendar (Scandinavia) and the Japan Trade Directory are a good first sources. Foreign yellow pages (available at libraries) can give you an idea of which companies are active at retail and wholesale levels. The Jaeger and Waldmann International Telex Directory is also useful. Company lists by country, line of business or both can be ordered from the US Commerce Department, Dunn & Bradstreet, Reuben H. Donnelly, Kelly's Directory and Johnston Publishing. Advertise in foreign trade publications. Trade publications and exporters' associations sometimes help their subscribers and members find foreign dealers. US firms can issue a new product press release and distributor request worldwide at minimal cost through the Commerce Department. Its Trade Opportunity Program (TOP) is available by subscription or online through the DIALOG data base. Trade fairs are a good way to meet potential distributors, get lists of companies in your industry and pick the brains of "old hands." Banks sometimes help good customers contact appropriate companies abroad. Some of the more aggressive airlines, air cargo services and freight forwarders will make trade contacts; some publish trade leads. Although most consulates and trade offices push their own exports, a few (for example, Japan's Jetro) can be very helpful with distributor leads. National and international chambers of commerce can be very helpful, particularly if your company becomes a member or expatriate member. Have a precise procedure to follow up unsolicited inquiries from overseas-reputable companies often see your advertising. The best long-term investment in international business is a well planned trip to selected markets. |
| SOURCE: 161 More Checklists (New York: Business International, 1985) , 89. |
A branch or subsidiary is a unit of the exporting company. Such units range from small sales offices to sister companies engaged exclusively in exports.
- 1383 reads
