Direct Exporting Methods in International Marketing
DIRECT EXPORTING METHODS IN INTERNATIONAL MARKETING
Agents
• Agents provide the most common form of low cost direct involvement in foreign markets. • They are independent individuals or firms who are contracted to act on behalf of exporters to obtain orders on a commission basis and do not take ownership of the goods. • They typically represent a number of manufacturers and will handle non-competitive ranges. • They agree to meet certain targets and are expected to contribute towards the preparation of forecast, development of strategies and tactics. • The selection of a suitable agent will take the following into account; the financial strength of the agent, their contracts with potential customers, the nature and extent of their responsibilities to other organisations and their premises, equipment and resources, and sales representatives.
Distributors
• Distributors buy the product from the manufacturer and so take the market risk on unsold product. • They therefore expect to take a higher percentage commission than agents to cover their costs and risk. • They usually seek exclusive rights for a specific sales territory and generally represent the manufacturer in all aspects of sales and servicing in their area.
Direct marketing
• Direct marketing is concerned with marketing and selling activities which do not depend for success on direct face-to-face contact and include mail order, telephone and television marketing, media marketing, direct mail and electronic commerce (www). • The critical factors are in the degree of standardisation of products and communications. • The challenge lies in the need to build and maintain up-to-date databases the use of multilingual data processing and personalisation software programs, developing reliable credit control and secure payment systems.
Management contracts
• Management contracts emphasise the growing importance of services, business skills and management expertise as
Agents
• Agents provide the most common form of low cost direct involvement in foreign markets. • They are independent individuals or firms who are contracted to act on behalf of exporters to obtain orders on a commission basis and do not take ownership of the goods. • They typically represent a number of manufacturers and will handle non-competitive ranges. • They agree to meet certain targets and are expected to contribute towards the preparation of forecast, development of strategies and tactics. • The selection of a suitable agent will take the following into account; the financial strength of the agent, their contracts with potential customers, the nature and extent of their responsibilities to other organisations and their premises, equipment and resources, and sales representatives.
Distributors
• Distributors buy the product from the manufacturer and so take the market risk on unsold product. • They therefore expect to take a higher percentage commission than agents to cover their costs and risk. • They usually seek exclusive rights for a specific sales territory and generally represent the manufacturer in all aspects of sales and servicing in their area.
Direct marketing
• Direct marketing is concerned with marketing and selling activities which do not depend for success on direct face-to-face contact and include mail order, telephone and television marketing, media marketing, direct mail and electronic commerce (www). • The critical factors are in the degree of standardisation of products and communications. • The challenge lies in the need to build and maintain up-to-date databases the use of multilingual data processing and personalisation software programs, developing reliable credit control and secure payment systems.
Management contracts
• Management contracts emphasise the growing importance of services, business skills and management expertise as