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Import Export SFSU IBUS 430
Chapter 7: Export Entry Modes
30
Business
Undergraduate 4
12/18/2011

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Term
two basic forms of exporting
Definition
direct and indirect exporting
Term
considerations about form of exporting:
Definition

1. cost of performing functions

2. costs of organizing activities or contracting with others

Term
indirect exporting
Definition
uses independent organizations in manufactuer's own country
Term
two types of marketing organizations
Definition
merchants and agents
Term
merchants
Definition
take title to the products
Term
agents
Definition
do not take title to the products
Term

home country based merchants:

export merchants

Definition
do all steps except product and package modification
Term

home country based merchants:

trading companies

Definition
type of export merchants, large and do more functions : providing financing, are supply/demand rather than production or user oriented
Term

home country based merchants:

export desk jobber (export drop shipper/cable merchant)

Definition
buy and sell primarliy raw materials.  take title but not physical possession
Term

home country based agents:

broker

Definition
primarily finds buyers for sellers and visa versa
Term
export management company (emc)
Definition
acts as exculsive export deparment for manufactuer for several allied but non-competing manufacturer for overseas buyers; uses manufacturer's letterhead; some act more like distributors (merchants) others like agents
Term

home country based agents:

manufacturer's export agent

Definition
operates in own name; doesn't provide as many services
Term

home country based agents:

export commission house

Definition
essentially becomes a domestic buyer; easy but exporter has little control; not long term
Term

home country based agents:

confirming house

Definition
assists overseas buyers; pays exporter
Term

home country based agents:

resident buyer

Definition
can build up long term relationships
Term
advantages of independent marketing organizations
Definition
inexpensive to start, foreign expertise, build up volume quickly, good for out-of-the-way markets
Term
disadvantages of independent marketing organizations
Definition
may not provide enough marketing effort; take some profit, may drop a manufacturer
Term
piggyback marketing
Definition
company a marketing the product of company b through company a's channels; may use the brand of b, a, or private label; easy low risk way to begin exporting
Term
exporting combinations
Definition
associations to promote exports of member's products or to serve as export cartel
Term
Direct Exporting: Built in Export Department
Definition
easiest to establish; may have problems getting support from other units and in carrying out technical functions
Term
Direct Exporting: Separate export Department
Definition
little conflict in daily operations but may be competition for resources
Term
direct exporting: export sales subsidiary
Definition
provides unified control; profit center; ease of financing; wider product line; tax advantages in some countries
Term
direct exporting: foreign sales branch
Definition
provides control, service dedicated staff for your products; costly
Term

direct exporting: storage or warehouse facilities

Definition
may be for one country or regional. used when inventory in foreign market is necessary or profitable
Term

direct exporting: foreign sales subsidiary

Definition
has greater autonomy because of foreign incorporation and domicile. may have tax and business practices advantages. (taxes are not the only reason for establishment)
Term
direct exporting: traveling salespersons
Definition
functions: selling activities, customer relations, information gathering; may act as demonstrator or tutor. balance costs vs benefits
Term
advantages of dependent export organizations
Definition
full return on sale, protection from neglect, knowledge, permanency' protect goodwill, costs decrease with volume
Term
disadvantages of dependend export organizations
Definition
costs and risks, luck of specialized knowledge, volume may be slow to build
Term
business functions that can be performed on the internet
Definition
  • market research
  • expanding representation
  • customer and marketing support
  • advertising
  • trade leads
  • logistics
Term
gray market exporting
Definition
marketing channels not authorized by the exporter for a particular foreign market.  high-priced, branded consumer goods.
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