Premium Essay

Intermediaries in International Trade and Marketing

In: Business and Management

Submitted By gozdeuzunnn
Words 303
Pages 2
INTERMEDIARIES IN INTERNATIONAL TRADE AND MARKETING

In today’s increasingly globalized world, international marketing is becoming more and more important day by day. When entering this important phase, one of the main dilemmas of manufacturing company becomes, whether doing the export by themselves, or outsourcing the service will be more advantageous. While some companies prefer direct trade and marketing in which the transactions are only done in between the manufacturer and the final retailer; some others proceed indirectly, involving a middle-man before the final buyer.
Direct marketing requires a total dedication of time and resources, and finances to identify opportunities in a foreign market. The manufacturer, all by itself, is responsible for market research, planning and distribution of the product, which is expected to produce satisfactory sales results.
For large companies with time and resources to devote to exporting, direct marketing might be a feasible option. Also in the long run it may be more profitable for a company to build relationships themselves rather than do so through a third party, in order to improve personal relationships in export.
As for small sized companies, marketing through intermediaries can be more feasible and a safer first step in exporting. By using intermediaries, small firms may have a representation in foreign markets without a serious commitment of time and money as the intermediary takes on all responsibilities itself. And due to the wide range of alternatives, manufacturer can actually maintain control over the export process while benefiting from the knowledge and expertise of an outsource service. Frequently, the exporting manufacturer has a reduced level of financial risk because the intermediary assumes the responsibility for finding overseas buyers, shipping products and collecting payment.
The types of...

Similar Documents

Premium Essay

Export

...EXPORT STRATEGIES AVAILABLE TO FIRMS INTERNATIONALISING This report gives an insight into exporting, its definitions and other international business transactions, it goes on discussing the different strategies available to a firm internationalizing for the first time, and these include both direct and indirect strategies available, and provides examples of firms that use export strategies. It also gives the advantages and disadvantages of such strategies. At the end of the report it provides a conclusion and recommendations to what strategies a firm can adopt depending on the situation. 2.0 INTRODUCTION AND BACKGROUND The most conventional forms of international business transactions are international trade and investment. International trade refers to an exchange of products and services across borders. Exchange can be through exporting, importing or countertrade. Exporting is an entry strategy involving the sale of products and services to customers located abroad from the home base or third country. Importing is the buying of products abroad and bringing them to the home market. Countertrade is a business transaction where all or partial payments are made in kind rather than cash. Both finished and intermediate goods, such as raw materials and components are subject to trade. While on the other hand international investment refers to the transfer of assets to another country, or acquisition of assets in that country through foreign direct investment and contractual...

Words: 3014 - Pages: 13

Premium Essay

Exporting

...EXPORTING Exporting is one of several methods an international firm can use to penetrate into a foreign market. It is the function of international trade where goods and services alike are sold beyond national borders. There are two types of exporting: 1. Direct Exporting 2. Indirect Exporting Direct Exporting Direct exporting refers to the act of an international firm involving itself directly to the exporting process of foreign market research, distributing the product to the foreign market, establishing market contact and setting up pricing/promotional strategies among other marketing activities. Usually such a firm sets up an exporting department within its organization to perform these tasks. Advantages of this type of export are: 1. Unified Control: As the firm is performing all the exporting tasks; all the authority in regards to exporting is centered in one organization and is not subject to any external pressure such as international marketing intermediaries. 2. Cost and Profit Control: Owing to the fact that there is an export department situated in the organization managing the cost of exports and the profits obtained as a result is easily achieved, this way an organization can increase its efficiency in terms of how it runs its internal affairs. 3. Customer Identification: The international firm is in direct contact with the foreign market that is buying its products, this way it is easier for the firm to identify what its market requires......

Words: 1002 - Pages: 5

Premium Essay

Management

...economic freedom in foreign direct investment. In this poster there were 6 different variables and hypothesis and they're tested with statistical analysis. After these analysis we saw that hypothesis one, which is "Trade and investment barriers will be inversely related to the inflow of FDI." was the only one that rejected while other ones were supported. With these informations the conclusion of the research was that MNE's prefer the countries that have least government intervention which is equal to political freedom. The next presentation was about growth and if it attract FDI. The main purpose of the research was to investigate if success in economic growth attract FDI. To investigate this the researchers used theories about how economic growth either attract, deterrent or is neutral towards FDI. To investigate this they used a quantitative approach that is based on 946 observations from 140 empirical studies. The results gave that that growth is a significant determinant of FDI but decides of the partial correlation is rather small. They also found that the economic growth is more important for developing countries. The conclusion gave that economic growth is an important determinant for FDI. The third presentation was about influence of international trade agreements on...

Words: 1051 - Pages: 5

Premium Essay

Michal3

...INTERNATIONAL TRADE & INVESTMENT Prof. Dr. Natalia Ribberink World Trade Center, Seoul, South Korea (Picture: Ribberink) INTERNATIONAL TRADE & INVESTMENT Preliminary Notes World Trade Center, Seoul, South Korea (Picture: Ribberink) Preliminary notes • Combination of lecture, seminar, group work and other forms of learning as appropriate; • Grading: working paper 60%, case studies 40% • Communication: natalia.ribberink@haw-hamburg.de © Prof. Dr. Natalia Ribberink 3 Agenda Chapter 1: Chapter 2: Chapter 3: Chapter 4: Chapter 5: International trade and investment environment International trade policy and instruments Forms of international trade FDI theories, patterns and forms FDI policy instruments For details s. Syllabus (will be provided in class on Nov 10, 2015). © Prof. Dr. Natalia Ribberink 4 Message icons Further reading Question for group discussion Case study Int. Trade & Investment Vocabulary © Prof. Dr. Natalia Ribberink 5 Online sources: AuslandsGeschäftsAbsicherung des Bundes: www.agaportal.de Außenwirtschaftsportal: www.ixpos.de Berne Union: www.berneunion.org.uk Kreditanstalt für Wiederaufbau: www.kfw.de OECD: www.oecd.org Statistisches Bundesamt Deutschland: www.destatis.de The Economist: www.economist.com UNCTAD: www.unctad.org World Trade Organisation: www.wto.org © Prof. Dr. Natalia Ribberink 6 CHAPTER 1: International trade & investment environment Westside......

Words: 5898 - Pages: 24

Premium Essay

Channel and Pricing Strategies

...manufacturers do not sell their goods directly to the final consumer. Between the final consumer and the manufacturer stands a group of intermediaries who perform various functions. The intermediaries are referred to as marketing channels, groups of interdependent organizations involved in the process to help make a product or service available for consumption or use, marketing channels (Kotler, & Keller, 2007). Every manufacturer needs a marketing strategy in order to promote their product and make it readily available to the public. So choosing the correct strategy is a critical decision facing management. Apples launch of the new mini iPad will need two channel strategies, one for their domestic market (U.S.A), and one for their international market (Japan). Since the product is new choosing the correct market is crucial for the success of the mini iPad. Apples reputation in their domestic market is one of high brand loyalty. Apple has many brand loyal customers that demand Apple products and choose to purchase Apple products before they go to the store. For this reason a pull strategy is the best route to take concerning the launch of the mini iPad in the domestic market. The pull strategy involves manufacturers promoting their product in a way that consumers start asking intermediaries for the product and in response inducing intermediaries to order the product. Apple may be in high...

Words: 1958 - Pages: 8

Premium Essay

Busieess

...discuss the types and roles of third-party intermediaries in exporting • To discuss the role of countertrade in international business Chapter Overview The first part of Chapter Thirteen is devoted to an examination of export and import strategies. Table 13.1 identifies the steps to consider when developing an export (or import) business plan. Next, the roles of a wide variety of third-party intermediaries are discussed. The chapter concludes with a discussion of the major issues related to export financing, including the use of countertrade as a form of payment mechanism. Chapter Outline OPENING CASE: Grieve Corporation—A Small Business Export Strategy A small firm located near Chicago, Grieve Corporation manufactures laboratory and industrial ovens, furnaces, and heat processing systems for the U.S. market. Grieve began losing business as (i) foreign competitors began to penetrate the U.S. market and (ii) its customers began to move overseas and started sourcing locally. With the help of the International Trade Administration of the U.S. Department of Commerce, Grieve was able to identify potential Asian distributors. During a business trip to Asia, the president of Grieve met with potential candidates and successfully recruited exclusive agents for each country visited. Once Grieve had gained sufficient experience in the Asian market, export activities were expanded to other regions. Moving into international markets has proved to be a major......

Words: 4062 - Pages: 17

Premium Essay

Internationl Marketing

...to enter an overseas market, the options available to you will vary according to the costs involved, degree of risk entailed and the amount of control required. The simplest form of entry strategy is exporting either direct or indirect. More complex forms may involve joint ventures or other forms of strategic alliances while, eventually, companies may decide to invest directly in the host country. Direct exporting This involves selling directly to your target customer in their home market. With this approach your business will retain its full margin but it also requires a large financial and human resource commitment. It takes time to make contacts, build relationships, negotiate deals, understand the market and engage in relevant marketing activities. Advantages of direct exporting Disadvantages of direct...

Words: 2724 - Pages: 11

Premium Essay

Method of Exporting

...Exporting[edit] Exporting is the process of selling of goods and services produced in one country to other countries.[4] There are two types of exporting: direct and indirect. Direct Exports[edit] Direct exports represent the most basic mode of exporting made by a (holding) company, capitalizing on economies of scale in production concentrated in the home country and affording better control over distribution. Direct export works the best if the volumes are small. Large volumes of export may trigger protectionism. The main characteristic of direct exports entry model is that there are no intermediaries. Types[edit] Sales representatives Sales representatives represent foreign suppliers/manufacturers in their local markets for an established commission on sales. Provide support services to a manufacturer regarding local advertising, local sales presentations, customs clearance formalities, legal requirements. Manufacturers of highly technical services or products such as production machinery, benefit the most form sales representation. Importing distributors Importing distributors purchase product in their own right and resell it in their local markets to wholesalers, retailers, or both. Importing distributors are a good market entry strategy for products that are carried in inventory, such as toys, appliances, prepared food.[5] Advantages[edit] * Control over selection of foreign markets and choice of foreign representative companies * Good information feedback from......

Words: 1329 - Pages: 6

Premium Essay

Culture & Strategy - Alphabet Games

...International Business Chapter 1 What is international Business Key Concepts In International Business * International Trade - describes the exchange of products and services across national borders * Exchanges can be made through exporting or can also take the form of: * Importing or Global Sourcing - the procurement of products or services from suppliers located abroad for consumption in the home country or a third country. * International Investment - refers to the transfer of assets to another country or the acquisition of assets in that country. Economists refer to such assets as factors of production and they include capital, technology, managerial talent and manufacturing infrastructure. * Foreign Direct Investment - is an internationalisation strategy in which the firm establishes a physical presence abroad through acquisition of productive assets such as land, plant, equipment, capital and technology. It is a foreign-market entry strategy that gives investors partial or full ownership of a productive enterprise. * International portfolio investment - refers to the passive ownership of foreign securities such as stocks and bonds for the purpose of generating financial returns. International portfolio investment and foreign direct investment are the two essential types of cross-border investment. The Nature of International Investment Foreign direct investment (FDI) is the ultimate stage in internationalisation and encompasses......

Words: 2728 - Pages: 11

Premium Essay

International Business Marketing

...CH 14 international marketing channels Distribution process The physical handling of goods, the passage of ownership, and especially important from a marketing viewpoint the buying and sellingnegotiations between the producers and middlemen and between middlemen and customers Agent middlemen In an international transaction, intermediaries who represent the principal rather than themselves; agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise Export management company (EMC) An important middleman for firms with relatively small international volume or those unwilling to involve their own personnel in the international function. These EMCs becomes an integral part of the marketing operations of its client companies. Working under the names of the manufacturers, the EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. Export trading company (ETC) An act allowing producers of similar products in the united states to form an export trading company; the act created a more favorable environment for the formation of joint export ventures, in part by removing antitrust disincentives to trade activities. Distribution structure The system, present in every country’s market, through which goods pass from producer to user; within the structure are a variety of middlemen Merchant middlemen In international transactions, the intermediaries,......

Words: 1460 - Pages: 6

Premium Essay

Communication Paper

...Purushothaman University of Phoenix MKT 571 Professor Siegal November 22, 2010 Channel and Pricing Strategies Team C’s objective is to state the channel and pricing strategies of Thermo Express. Our team has decided to have our home country as Chile and our international market country as the United States. We considered the population as well as the potential that our product “Thermal Express,” in order for the launching of the product to take place. We have also realized that the challenges and opportunity will accompany it. In order for the company to develop and launch, we had to develop pricing strategies in both the domestic and international markets. We will also provide justifications for our choice for acquiring the United States as our international market. The two advantages in this product are that it is green, meaning it is good for the environment and will eliminates the excessive use of cups and perishable items. Second because of the economic state, people can save money by using this and not constantly buying coffee or tea bags. Justification for Thermo Express Our organization has selected the United States has our international market to sell our product Thermo Express. Although the opportunities for companies to enter and compete in foreign markets are significant, the risks also can be high. Companies selling in global industries however, in fact have no choice but to internationalize their......

Words: 1638 - Pages: 7

Premium Essay

Marketing 3000

...* Quizzes Home * Summary * Submissions Selected * Reports ------------------------------------------------- Top of Form Xiaoshu Zhang (username: xzhang2) | To Submissions ------------------------------------------------- Attempt 1 Written: Mar 3, 2012 1:28 AM - Mar 3, 2012 1:57 AM ------------------------------------------------- Submission View Your quiz has been submitted successfully. Quiz 8 Chapters 19 and 20 | Question 1 | | 1 / 1 point | Critics charge that intermediaries ________. | | are too few in number | | | are inefficient | | | provide only necessary services | | | underprice their services | | | are too competitive | Question 2 | | 1 / 1 point | ________ calls for meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. | | The sustainable marketing concept | | | Innovation | | | Consumerism | | | Environmentalism | | | The strategic planning concept | Question 3 | | 1 / 1 point | What are deficient products? | | products that have neither immediate appeal nor long-run benefits | | | products that give high immediate satisfaction but only hurt consumers in the long run | | | products that have low appeal but may benefit consumers in the long run | | | products that are either unsafe or inferior | | | any product in the decline stage of the product life cycle | Question......

Words: 1195 - Pages: 5

Premium Essay

International Business

...OUTLINE FOR AN INTERNATIONAL BUSINESS PLAN Please type your plan single-spaced. The first stage in developing an international business plan is to undertake a preliminary country analysis. Presented below are four separate sections to be completed for collection and analysis of market data and preparation of the plan: (1) Analysis: Cultural Environment; (2) Analysis: Economic; (3) Analysis: Market and Competitors; and (4) International Business Plan. The headings in each section are general and intended to provide direction to areas to explore for relevant data. Heading topic area may be emphasize or de-emphasized, depending on the nature of the firm’s product and the country being targeted. Some topic headings are unimportant for some countries and can be ignored. In the material that follows, “product” can refer to products or services. CULTURAL ANALYSIS The data obtained for this section provides vital information to guide development of the business plan and to support managers in understanding specific cultural dimensions of the country. Such information is useful to ensure the firm is effective in both developing the plan and interacting with the target market. Hence the information developed for this section serves a dual purpose both in the early stages of developing the plan and in executing the plan through interactions with country nationals. The information in this section constitute more than simple facts. Managers responsible for developing and executing the......

Words: 2244 - Pages: 9

Premium Essay

Market

...”To stay competitive, organizations must change with market conditions and customer desires” (MacVicar & Gooderham, p1). Classic Airlines is facing a difficult time in their history. The organization has lost many of its loyal customers and its remaining customers are flying less frequently. The organizations CEO, Amanda Miller has challenged the marketing team with improving their number of loyal customers while increasing Classic Airlines profitability and stock price. All must be accomplished with a 15% cost reduction. To assist in its growth strategy, Classic Airlines marketing team is looking at growing globally and adding the United Kingdom to their international market. This paper will review channel and pricing strategies Classic Airlines must consider to achieve its desired results. Justification of choice of international market – UK Loyalty is a difficult goal and the most marketers can do at times is to encourage consumers to purchase one brand over another. Classic Airlines choice for an international market is access to the vast number of air travelers each year in the United Kingdom. The Department for Transportation in the United Kingdom estimates that “carrying over 235 million passengers a year and over 2.3 million tons of freight. Demand for air travel is projected to grow in the medium to long-term. Department for Transportation has put in place a long-term framework that balances the delivery of social and economic benefits from aviation...

Words: 1661 - Pages: 7

Premium Essay

How to

...Those differences may be climate and environmental factors, social and cultural factors, local availability of raw materials or product alternatives, lower wage costs, lower purchasing power, the availability of foreign exchange (hard currencies like the dollar, the British pound, and the Japanese yen), government import controls, and many other factors. If a product is successful in a domestic market, one strategy for export success may be a careful analysis of why it sells here, followed by a selection of similar markets abroad. In this way, little or no product modification is required. If a product is not new or unique, low-cost market research may already be available to help assess its overseas market potential. In addition, international trade statistics (available in many local libraries) can give a preliminary indication of overseas markets for a particular product by showing where similar or related products are already being sold in significant quantities. If a product is unique or has important features that are hard to duplicate abroad, chances are good for finding an export market. For a unique product, competition may be nonexistent or very slight, while demand may be quite high. Finally, even if domestic sales of a product are...

Words: 2207 - Pages: 9