Direct Sales You can sell directly to export customers by making sales visits to territories where you have identified demand. This is a simple, cost-effective way to enter global markets, but your potential sales are limited by the time and resources you can allocate to sales visits.
Distributors Working with distributors provides you with a local presence in your target markets and reduces your own sales and logistics requirements. Distributors buy products from you and resell them to their own customers. They offer you the benefit of established local contacts and market knowledge. Investing in training will give distributors the product and market knowledge they need to increase sales of your product. Although working with distributors provides you with access to established markets, you have minimal control over the way distributors deal with customers or market your product.
Joint Venture A joint venture with a local business partner also provides the benefits of local market knowledge and contact. Your company sets up a business relationship with a company in the local market. The local partner may also reduce the risk of discrimination against your company. Take legal advice before setting up the joint venture as some countries limit foreign companies to minority participation in the venture, reducing your effective control.
17. Foreign market entries. Explain procedure of Licensing, Franchising and Joint Venture.
Foreign Market Entryis basically introducing your company to new markets by selling your product or service in a different country. It can enhance sales and profits, build brand recognition, lower the risks of just operating in one market and lengthen the life cycle of your product.
For a successful foreign market entry strategy, these are the factors that you should consider:
1. Marketing – how do you organise and implement marketing efforts?
2. Sourcing – whether to get items, make them or buy them?
3. Investment and control – will it be an acquisition, joint venture or worldwide partner?
