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Export Management Assignment

There are two main types of export distribution channels - indirect and direct exporting. Indirect exporting involves using intermediaries like commission agents, export management companies, export trading companies, or export agents to introduce products to foreign markets with less risk and responsibility for the exporting company. Direct exporting gives more control over the export process but is more expensive. Key factors to consider when choosing an export channel include the target market's buying behaviors, product characteristics, market location, competition, local business practices, legislation, desired market coverage, need for customer support services, and cost.

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Ayush Kesri
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316 views

Export Management Assignment

There are two main types of export distribution channels - indirect and direct exporting. Indirect exporting involves using intermediaries like commission agents, export management companies, export trading companies, or export agents to introduce products to foreign markets with less risk and responsibility for the exporting company. Direct exporting gives more control over the export process but is more expensive. Key factors to consider when choosing an export channel include the target market's buying behaviors, product characteristics, market location, competition, local business practices, legislation, desired market coverage, need for customer support services, and cost.

Uploaded by

Ayush Kesri
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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AMITY

UNIVE
RSITY
ASSIGNMENT OF EXPORT MANAGEMENT

Submitted By: Submitted to :Mona ratnesh


Name :Ayush Kumar
Enrollmentno. : A36106418076
Course/Sem. : BBA ‘4B’
Batch: 2018-21
 What are the different types of export distribution channel
and also explain what factors should be considered while
choosing the export channel ?

 There are two ways to introduce your company or products in a


foreign market: indirect exporting and direct exporting.

 INDIRECT EXPORTING.
The principal advantage of indirect exporting is that allows the
companies introduce their products into foreign markets without
any responsibility or risk. This way is perfect for small
companies.

 Commission agents.
They find foreign firms that want to purchase our products.
Commission agents work as an intermediary between sellers
and buyers.

 Export management companies.


Independent firms that act like an export department. In
conclusion, they manage the small companies exports.

 Export trading companies.


This companies could act like an export department for
producers or export the product for its own account.
 Export agents.
Export agents buy the goods from the producers and then they
sell this products in foreign markets where they assume all the
risk.

 “Piggyback” marketing.
Piggyback marketing is an arrangement in which one firm
distributes a second firm’s product or service. In this way, the
company can introduce their products in other markets without
incurring the marketing and distribution costs associated with
exporting.

 DIRECT EXPORTING
The advantages of direct exporting are: more control over the
export process and a closer relationship with the customer in the
foreign country.  This way to export is more expensive than
indirecting exporting.

 Organizing for exporting.


In some cases, the company may create an international
department to keep an eye on all the exports and imports. That
means more control over your product.
 Sales representatives.
The sales representatives present the product to potential buyers
behalf of the company. They work on a commission basis and
assume no risk or responsibility.

 Agents.
They operate on your behalf by introducing you to foreign
markets. The company can control the final prize and the brand
image.

 Distributors.
Distributors purchase the product from a company, who want to
export, and resell it at a profit. The distributors provide support
and service for the product.

 Foreign retailers.
A company may sell directly to foreign retailers. These
transactions are effective in countries that have large retail
chains.

 Direct sales to end users.


A company may sell its products directly to end customers in
foreign countries. The disadvantage is that the export company
is responsible for shipping, payment collection and product
servicing.
9 factors should be considered while choosing the export
channel

1. Target market buying behaviours


It is vital that an organization knows where and how
customers want to buy its products and services. Market
research is the key to answering these questions. During
market research, demographic, psychographic, geographic
and behavioural characteristics are considered to answer
questions such as: where do customers in the target market
buy similar products and services? In stores? Online? From
sales representatives? The exporter must also consider the
international sales and marketing plan and what the
organization wants to achieve in that specific market.

2. Product and service characteristics


The characteristics of products and services are primary
considerations when making decisions about how to sell and
distribute products to an international market. Is the product
light and small or is it a single piece of industrial equipment
weighing several tonnes? Is the product perishable or
hazardous, requiring special shipping and handling
conditions? Can the service be delivered online or does it
require face-to-face interaction?
3. Market location
The location of the target market, including proximity to the
export location, will influence the sales channels selected. Is
it a neighbouring country accessible via a well-established
road system or is it on the other side of the globe? Can the
market be accessed by established shipping, rail or trucking
routes? How long will it take to reach the market and restock
supplies? What types of sales channels are available in this
location? The geography of the target market, the distances
between customers and the availability of different types of
sales channels in that location all affect sales channel
decisions.

4. Competition
The sales, marketing and pricing strategies used by
competitors can help organizations choose the best sales
channels for their own products and services. If it has worked
for competitors with similar offerings, it can also work for
the organization. No matter whether the organization uses
similar or different channels, it will strive to deliver and
distribute its products and services as well as, or better than,
the competition. It can gain competitive advantage by
making it easier for customers to access its products and
services, and by providing timely deliveries and inexpensive
shipping.

5. Local business practices


Local business practices are another factor to consider when
selecting sales channels. For example, when retailers make
frequent purchases in small volumes, organizations need to
find ways to warehouse and distribute products in the local
market in response to that practice.

6. Legislation
Organizations must consider how legislation influences the
sale and distribution of products and services in domestic and
international markets. For example, Scotland has restrictions
on holding and using personal data. Japan has legal
requirements concerning store size and the opening of new
retail outlets. Until 2001, China prohibited the direct
involvement of foreign companies in its distribution and
retail sectors. Countries may also have special packaging and
labelling requirements.

7. Market coverage
The extent of market coverage—the percentage of the total
market that may be reached through marketing or sales
activities—is a crucial consideration for entering a market.
This applies to both selling and distribution activities. If an
agent or distributor only operates within a specific
geographic jurisdiction within the market, the company must
decide if that geographic market coverage is sufficient for its
needs. In some cases, particularly when entering a large
market for the first time, some companies may decide to
limit market coverage due to supply concerns or as a way to
test the market. Market coverage also refers to the extent that
selling and distribution activities will access the targeted
customers or market segments. For example, an exporter of
luxury products may not require their market coverage in a
foreign country to extend beyond the major urban centres.

8. Customer support services


Regardless of the distance between headquarters and the
international market, today’s communications systems
enable parties to communicate almost instantaneously via
telephone, instant messaging, text messaging and emails.
Communication technology helps to avoid some of the
constraints posed by earlier communication methods and
allows agents, distributors and consumers to have their
queries answered quickly.
9. Cost
An obvious consideration when developing a sales channel
strategy is cost, particularly the cost-benefit analysis of one
strategy versus another. Every link in the sales network
implies a cost. The level of control and customer reach may
be lower for certain distribution methods, but could be
significantly less expensive, thereby offsetting loss in sales
volumes.

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