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Getting goods on to the market - Essay Example

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These are fundamentally the various international market entry modes that can be opted by a company depending upon its situation and…
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Getting goods on to the market

Under licensing, the licensor does not have to forego the ownership of the property (the brand name etc); hence its usefulness lies in a situation where the owner is not willing to lose his ownership. Also, the responsibilities of marketing, investing and manufacturing rests on the firm receiving the license.
Franchising is another form of contractual arrangement between parties concerning the use of a firm’s brand name, logo, trademark etc. In case of franchise, the owner firm (franchiser) backs up the firm acquiring rights (franchisee) in all the standardised marketing and management activities against the payment of some royalty for permanent time period (Roof, 1994).
Exporting is of three kinds, viz. direct, indirect and own. Direct exporting connotes a firm or a manufacturer reaches the market and sells its product with the help of an intermediaries or middlemen. On the contrary, indirect exporting implies a firm selling its products and maintaining direct relationship with the customers in the foreign markets. Own exporting refers to a firm that reaches its customer internationally without any involvement of middlemen in the trade. All the three exporting methods do not imply any sort of ownership and manufacturing in the international market (Czinkota et al, 1992). The success of exporting largely depends upon availability of proper distribution channels in the foreign market.
Agency and distribution both are necessary elements in conducting export trade. An exporter can opt for any one of the agent or distributor to sell its products in a foreign market. Agent will not be financially involved in the purchase of the product; he will just get the product form the firm and sell it to the customers. Distributors on the other hand, first purchase the product from exporter and then sell it to the customers.
The commercial factors that are likely to influence a firm’s choice concerning the marketing arrangement ... Read More
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