Identifying Country Markets

Export Marketing

1. Country Market Research

1. 2. 3. 4. Market research allows firms to determine which foreign markets have the best potential for a particular product. New to export firms should seek a few target markets based on the following: Demographic and Physical Environment, The political Environment, Economic Factors, Social and Cultural Environment

 Conducting a through market factor assessment will help the firm predict the demand for its product and services. In order to identify two or three foreign markets, it is important conduct the market factor assessment study based on upto ten countries that appear to offer export opportunities for the product.

The Exporter should follow the below 17 points:

1. 2. 3. Over all population of each country. (density & growth) Degree of population located in urban, suburban and rural areas. Climatic and weather variations that may affect the product or service. Shipping distances from the point of export to the various target countries. Average age and quality of transportations and telecommunication infrastructure.

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6. Adequate shipping, packaging, unloading and other local distribution networks. 7. governments attitude towards the importation of foreign products. Political system should be stable for conducting a sound business. 8. Predicted forecasting and economic growth rates for the country & countrys commitment towards fostering higher imports and exports. 9. Currency exchange and rate of inflation in the country. 10.Per capita income rate i.e. increasing or stagnant.

11. The percentage of discretionary income that can be spent on consumer goods. 12. Average education level prevailing in the country. 13. Degree of adaptability or translation of products is necessary. 14. Documentary, technical and environmental import regulations. 15.Intellectual protection property laws which could effect the products and services. 16. If commercial dispute arises fairness and un biasness of a judicial system should be reviewed and tax laws should be clear. 17. Number of foreign competitors in the market and from what regions.

2. Ways of Entering Into Export Market

Selecting the mode of entry into a particular export market is among the most important decisions to make. It also has implications for a wide range of international marketing actions.

7 Ways of Entering into Export Market:

1. Forming an Export Consortium: Two or more exporters can form a consortium. Consortiums enjoy special benefits from the governments such as reliefs etc. and small exporters use the approach during the initial years of exporters.

7 Ways of Entering into Export Market:

2. Indirect Exporting: A firm wishing to export but not having the required personnel or resources to do so may export through merchant exporters, export houses or export trading houses. These entities have the infrastructure & expertise required to export to a no. of different countries.

7 Ways of Entering into Export Market:

3. Direct Exporting: The manufacturer exporter carries out the entire export process and does not use any intermediaries, direct exporting can be done by mail order, by travelling sales person and through branch officers.

7 Ways of Entering into Export Market:

4. Sales Agents: Sales agents are either commission agents or distributers. The former merely bring in the two interested parties, (i.e. the buyer and the seller) together and charge a commission, where as a later take the little to the goods from the manufacturer and then sell these at their own outlets, on their own terms.

7 Ways of Entering into Export Market:

5. Direct Sales to End Users: A firm sells to an end user in a foreign country. Buyers are identified through trade shows, international publications, word of mouth, or government contact programs and responsible for the shipping, payment, collection, product servicing & all other facets of exporting.

7 Ways of Entering into Export Market:

6. Import Promotion Offices: Many countries have special office to encourage imports from developing countries.

7 Ways of Entering into Export Market:

7. Exporting through Channelizing Agencies: Items appearing under the channelized list of exports can be exported only through public sector channelized agencies. These agencies provide special facilities and assistance to manufacturers/ suppliers. They have their own procedures for registering suppliers or business associates.

3. Logistics Network Establishment

Several sales & distribution channels exist in different markets around the world Some Examples are:

1. Agents: Also can be known as commission

agent, purchasing agent, and is usually employed by small firm or his or her expertise of a particular product in a foreign company or in a foreign market. The agents income is through a commission from a net export price.

2. Distributor: Purchases merchandise from an exporter, usually at a discount and resells it in the foreign market for a profit. The distributor maintains an inventory of the suppliers products & usually provides support & service. He/she does not sell to an end user. Payments terms & other agreements between the distributor and the company are established through a contract.

3. Internet: With the worlds market becoming more competitive. Internet has become the favored choice, especially in the developed countries, of a sales and distribution network. Potential buyers visit a site and they buy goods from that website and get it delivered to their house.

4. Wholesalers: A wholesaler buys in bulk from the exporter & organizes the retail distribution. The wholesaler makes profit on the markup. Direct Sales to End Users: Through exporting, a firm sells directly to an end user in a foreign or a government contact programmes and the firm is responsible for shipping, payment collection, product services and all other facets of exporting.

5. Sales Representatives: An individual who represents the company in a foreign market is a sales representative. Representative use the company literature and sample, usually works on a commission basis & assume no risk or responsibility. Signed prior to hiring the representatives contract should outline the territory, terms of sales, methods of compensation, reasons of termination of services etc.

6. Export Development Companies: An indirect exporting option, EDCs handles all aspects of exporting for the SME, from warehousing, loading & unloading cargo, freight forwarding of goods, shipping documents, to provide short term & long term financing, conducting market research & preparing and placing advertisements.

7. Mail Order Houses: Depending on the nature of supplying the product & the market, this type of exporting could be a valuable sales outlet for SMEs. once a product has been warehoused in the importing country then the stock can be sold through mail order.