Introduction
Like any decision in business, a person must take the decision to go for exporting or importing to get the comparative advantage and to achieve international competitiveness. The most important thing is to take a decision to export and import and reap the benefits of international trade.
It is essential that a person (or a company) engaged in international trade be aware of the various procedures involved in it. The business of exports and imports is heavily document oriented and one must get acquainted with the entire procedure. Failure to comply with documentary requirement may lead to financial loss and, therefore, it is advisable for the traders to know about all procedures.
Foreign Market Entry Strategies
Indirect export
The market-entry technique that offers the lowest level of risk and the least market control is indirect export, in which products are carried abroad by others. The firm is not engaging in international marketing and no special activity is carried on within the firm; the sale is handled like domestic sales.
There are several different methods of indirect exporting:
* The simplest method is to deal with foreign sales through the domestic sales organization. For example, if a firm receives an unsolicited order from a customer in Spain and responds to the request on a one-off basis, it is engaging in casual exporting. Alternatively, a foreign buyer may approach to the firm. Products are sold in the domestic market but used or resold abroad. This type of arrangement may arise if, for example, a foreign department store has a buying office in the firm’s home country. If the exporting firm does not follow up the contact with a sustained marketing effort, it is unlikely to gain future sales.
* A second form of indirect exporting is the use of international trading companies with local offices all over the world. Perhaps the best-known trading companies are the Sogo Sosha of Japan such as Mitsui or Mitsubishi....