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With export entry modes a firmâs products are manufactured in the domestic market or a third country and then transferred either directly or indirectly to the host market. Export is the most common mode for initial entry into international markets. Sometimes an unsolicited order is received from a buyer in a foreign country, or a domestic customer expands internationally and places an order for its international operations. This prompts the firm to consider international markets and to investigate their growth potential. Exporting is thus typically used in initial entry and gradually evolves towards foreign-based operations. In some cases where there are substantial scale economies or a limited number of buyers in the market worldwide (e.g. for aerospace), production may be concentrated in a single or a limited number of locations, and the goods then exported to other markets. Exporting can be organized in a variety of ways, depending on the number and type of intermediaries. As in the case of wholesaling, export and import agents vary considerably in the range of functions performed. Some, such as export management companies, are the equivalent of full-service wholesalers and perform all functions relating to export. Others are highly specialized and handle only freight forwarding, billing or clearing goods through customs. In establishing export channels a firm has to decide which functions will be the responsibility of external agents and which will be handled by the firm itself.While export channels may take many different forms, for the purposes of simplicity three major types may be identified: indirect, direct and cooperative export marketing groups. Global Marketing Svend Hollensen Fifth Edition A decision-oriented approach
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ĐĐ°ŃĐ”ŃĐžĐ°Đ»Ń Đ»Đ”ĐșŃОО: "ĐĄĐżĐŸŃĐŸĐ±Ń ĐČŃŃ ĐŸĐŽĐ° ĐșĐŸĐŒĐżĐ°ĐœĐžĐč ĐœĐ° Đ·Đ°ŃŃĐ±Đ”Đ¶ĐœŃĐ” ŃŃĐœĐșĐž"
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With export entry modes a firmâs products are manufactured in the domestic market or a third country and then transferred either directly or indirectly to the host market. Export is the most common mode for initial entry into international markets. Sometimes an unsolicited order is received from a buyer in a foreign country, or a domestic customer expands internationally and places an order for its international operations. This prompts the firm to consider international markets and to investigate their growth potential. Exporting is thus typically used in initial entry and gradually evolves towards foreign-based operations. In some cases where there are substantial scale economies or a limited number of buyers in the market worldwide (e.g. for aerospace), production may be concentrated in a single or a limited number of locations, and the goods then exported to other markets. Exporting can be organized in a variety of ways, depending on the number and type of intermediaries. As in the case of wholesaling, export and import agents vary considerably in the range of functions performed. Some, such as export management companies, are the equivalent of full-service wholesalers and perform all functions relating to export. Others are highly specialized and handle only freight forwarding, billing or clearing goods through customs. In establishing export channels a firm has to decide which functions will be the responsibility of external agents and which will be handled by the firm itself.While export channels may take many different forms, for the purposes of simplicity three major types may be identified: indirect, direct and cooperative export marketing groups. Global Marketing Svend Hollensen Fifth Edition A decision-oriented approach
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ĐĐ°ŃĐ”ŃĐžĐ°Đ»Ń Đ»Đ”ĐșŃОО: "ĐĄĐżĐŸŃĐŸĐ±Ń ĐČŃŃ ĐŸĐŽĐ° ĐșĐŸĐŒĐżĐ°ĐœĐžĐč ĐœĐ° Đ·Đ°ŃŃĐ±Đ”Đ¶ĐœŃĐ” ŃŃĐœĐșĐž"
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Export and Import Practices Chapter 14 Chapter Objectives Explain why firms export and challenges to exporting Identify the sources of export counseling and support Discuss the meaning of the various terms of sale Identify some sources of export financing Describe the activities of a foreign freight forwarder Understand the kinds of export documents required Identify import sources Describe the activities of a customhouse broker Who Exports? Many people believe large multinationals do not export because they supply their foreign markets from local production However, some of the largest U.S international firms were also the nationâs largest exporters. Who Exports? (continued) The U.S. Bureau of Census reported that manufacturers accounted for the largest proportion of exports (69+%). The survey showed that the top 50 manufacturers accounted for a minimum of 45% of the known export value while; 200,000+ small and medium-size firms were responsible for 31% of the known export value. Why Export? Reasons to export To serve markets where the firm has no production facilities. the local plant does not produce the firmâs complete product mix. To satisfy a host governmentâs requirement that the local subsidiary export. IOW: By rule, the organization must export. To remain competitive in the home market. Why Export? Reasons to export (contâd) To test foreign markets and foreign competition inexpensively. To meet actual or prospective customersâ requests for the firm to export. (AKA: Accidental Exporting) To offset cyclical sales of the domestic market. To achieve additional sales. (Using production capacity to reduce fixed cost per unit.) To extend a productâs life cycle. Why Export? Reasons to export (contâd) To distract foreign competitors that are in the firmâs home market by entering their home markets. To partake in the kind of success the firmâs management has seen others achieve by exporting. To improve equipment utilization rates. (Using production capacity to reduce fixed cost per unit.) Why Donât They Export Two major reasons U.S. firms give for not exporting Preoccupation with the vast American market. Or their respective home market. A reluctance to become involved in a new and unknown operation. Why Donât They Export General Problem Areas that Deter Firm from Exporting Locating foreign markets. Payment and financing procedures. Export procedures. Sources of Export Counseling Trade Information Center (TIC) The federal government has set this up as a first stop for information: about all federal export assistance programs as well as country and regional market information. Trade Information Center Web Site http://www.export.gov/exportbasics/ticredirect.asp Among the items at the TIC index page are links to government export programs, trade promotion events, and trade lead information. Sources of Export Counseling International Trade Administration (ITA) Good Source for Continuing Assistance from Uni ...
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1 Chapter 4 Marketing 4220 International Sourcing, Logistics & Transportation Methods of Entry Into Foreign Markets 5/21/2015 1 Methods of Entry Into Foreign Markets Entering A New Market Indirect Exporting Active Exporting Production Abroad Other Issues 2 Entering a New Market Determining the appropriate method to enter a new market depends on several factors: Size and growth of the market Potential market share of the exporter Type of product and marketing strategy of the exporter Willingness of the exporter to get involved Characteristics of the importing country Time horizon considered Entering a New Market The company must decide whether market factors favor Manufacturing abroad Manufacturing at home Active Exporting Indirect Exporting Entering a New Market Active Exporting Exporter actively participates in finding potential markets abroad. Best option for large firms or firms with international experience. Indirect Exporting Exporter does not seek export sales. Allows manufacturer to concentrate on domestic market and leave exporting to the experts. Indirect Exporting Export Trading Companies Export Management Corporations Piggy Backing 6 6 Export Trading Company An Export Trading Company [ETC] is a firm with offices in multiple countries that purchases goods in one country and resells them in another. For the âexporterâ selling to the ETC, as well as for the âimporterâ buying from the ETC, the transactions are domestic transactions, even though the goods eventually travel internationally. Historically, the first ETCs were created in Britain, France, and the Netherlands to facilitate trade with India and Indochina. They were then created in Spain and Portugal for trade in South America. Following World War II, ETCs became popular in Japan as the country began to trade with the outside world. Today, they are almost exclusively Japanese: Mitsui, Mitsubishi, Marubeni, Itochu, etc. Export Trading Company ETC in Country A ETC in Country B Country A Country B Firm 1 Firm 2 ETC Export Management Corporation An Export Management Corporation [EMC] is normally located in the exporting country. The EMC acts as a representative for the exporter abroad, but never takes title to the goods; it acts as a facilitator helping the exporter find buyers and earns a commission on the sale. A sale through an EMC requires more exporter involvement; it has to ship the goods, invoice the importer, carry the risk of non-payment and has to manage parts of the transaction. Export Management Corporation Exporter Importer EMC Exporting Country Pays a commission Sells Payment Importing Country Goods Piggy Backing Piggy-backing refers to the possibility of a small firm piggy-backing on another firmâs efforts to enter a foreign market. For example: A firmâs custom ...
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International Business 8e By Charles W.L. Hill Chapter 15 Exporting, Importing, and Countertrade Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 15-3 Why Export? ï¶ Exporting is a way to increase market size and profits ï¶ increasing thanks to lower trade barriers under the WTO and regional economic agreements such as the EU and NAFTA ï¶ Large firms often proactively seek new export opportunities, but many smaller firms export reactively ï¶ often intimidated by the complexities of exporting ï¶ Exporting firms need to ï¶ identify market opportunities ï¶ deal with foreign exchange risk ï¶ navigate import and export financing ï¶ understand the challenges of doing business in a foreign market 15-4 What Are The Pitfalls Of Exporting? ï¶Common pitfalls include ï¶poor market analysis ï¶poor understanding of competitive conditions ï¶a lack of customization for local markets ï¶a poor distribution program ï¶poorly executed promotional campaigns ï¶problems securing financing ï¶a general underestimation of the differences and expertise required for foreign market penetration ï¶an underestimation of the amount of paperwork and formalities involved 15-5 How Can Firms Improve Export Performance? ï¶Many firms are unaware of export opportunities available ï¶Firms need to collect information ï¶Firms can get direct assistance from some countries and/or use an export management companies ï¶both Germany and Japan have developed extensive institutional structures for promoting exports ï¶Japanese exporters can use knowledge and contacts of sogo shosha - great trading houses ï¶U.S. firms have far fewer resources available 15-6 Where Can U.S. Firms Get Export Information? ï¶The U.S. Department of Commerce - the most comprehensive source of export information for U.S. firms ï¶The International Trade Administration and the United States and Foreign Commercial Service Agency - âbest prospectsâ lists for firms ï¶The Department of Commerce - organizes various trade events to help firms make foreign contacts and explore export opportunities ï¶The Small Business Administration ï¶Local and state governments 15-7 What Are Export Management Companies? ï¶ Export management companies (EMCs) are export specialists that act as the export marketing department or international department for client firms ï¶ EMCs normally accept two types of assignments 1. They start export operations with the understanding that the firm will take over after they are established ï¶ not all EMCs are equalâsome do a better job than others 2. They start services with the understanding that the EMC will have continuing responsibility for selling the firmâs products ï¶ but, firms that use EMCs may not develop their own export capabilities 15-8 How Can Firms Reduce The Risks Of Exporting? ï¶To reduce the risks of .
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Chap015
1.
Chapter Exporting, Importing,
and Countertrade 15
2.
3.
4.
5.
6.
7.
Government support for
exports www.bundesregierung.de www.miti.go.jp 15-2
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
Preference of the
US exporter Fig 15.1
20.
Preference of the
French importer Fig 15.2
21.
The use of
a third party Fig 15.3
22.
A typical international
transaction Fig 15.4
23.
24.
25.
26.
27.
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29.
30.
31.
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