Approach to Exports and International Marketing Business Model

Today every individual entrepreneur owned businesses as well as Corporates have changed the way they look at their vision and business planning. Companies how ever big or small are no longer operating in domestic markets alone, for they have at their disposal the entire global market which is just waiting to be captured. The globalization has increased the international trade which has been enabled and propelled due to the electronic and internet revolution. Every company draws up ambitious business plans for its domestic markets as well as targeting the most attractive foreign markets for its products with a long term view makes up for most of the business plans.

Today most of the Organizations are thinking global, setting up networks globally and this is leading to an increase in international trade.

Multi National Product Company’s view of global markets and trade is totally different from the other smaller organizations. They generally tend to identify their markets first. To be able to cater to the growing markets they identify suitable manufacturing locations that give them the best cost advantage in terms of labor as well as other resources.

Using various Supply chain network models, as well as commissioning various Market Research reports, they choose to setup manufacturing or assembly plants based on analysis and detailed network designs. Accordingly we see manufacturing plants being set up or transferred from one region to another region. Many US and European companies have setup manufacturing locations in Malaysia, India, Hong Kong, Singapore, Indonesia, Philippines for these are known to offer skilled labor at cheaper costs and are ideally located to the growing markets too etc.

Then there are other companies in the US as well as Europe and other parts of the world who believe in outsourcing or contract manufacturing. There are several Large scale ECM/EMS companies like Sanmina, Solectron, Foxcon, Flextronics etc who have setup manufacturing facilities for electronics field and cater to leading brands all over the world. In the field of Electronics and Computers, contract manufacturing seems to be very much in vogue since 1980s.

Even in the field of pharmaceuticals, last two to three decades have seen several changes in terms of manufacturing. Multi national Companies have increasingly outsourced manufacturing of bulk drugs to countries that are cheaper especially to countries like China, India and Philippines etc.

The increased international trade and sales and marketing efforts in new markets have given impetus to international trade. While planning to capture a new market different Organizations have different approaches. While very big Multi National Companies like Procter & Gamble, Unilever, IBM, Microsoft etc, have approached new markets directly by establishing their own networks and offices in foreign countries, there are other companies that have sought to go in for a Joint venture with local business partners and bring in Foreign Direct Investments into the country. This approach varies from country to country and is especially dependent upon the foreign countries policy towards foreign direct investment and their support for global players to set shop in the country.

However there are host of medium and small size organizations those that explore new markets with a very clear approach of manufacturing locally, products for export markets and exporting to the new markets. Such organizations focus more on setting up marketing network in the new markets. There are different options that are followed by different organizations depending upon their business plans.

There are several different options available to exporters to market their products and manage the exports to the foreign country. Many companies appoint Sales Representatives or Agents that market the products, book orders and work on commission basis. The second type of model followed by many organizations is to appoint Country Distributor who will buy the stocks and sell in the local market. Yet another type of export marketing involves consignment sale to agents in which the consignment is exported to the agent who does not own the stock but holds it in inventory and sells in the market and repatriates the earning directly back to the company.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to and the content page url.