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Chapter 9

Entrepreneurship Chapter 9.docx

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Department
Commerce
Course
COMM 320
Professor
All Professors
Semester
Fall

Description
Entrepreneurship Chapter 9International Market EntrySee table 31 pg 424 for overview on different market entry strategiesElements to considerTo select the best strategy companies must consider the markets they have selected the products or services they wish to sell and their overall aims for international tradeSee table 32 page 425 for market entry considerationsMarket entry strategies1Exporting It is the traditional method for trading internationally and involves goods produced by a company in one country being delivered to another country and marketed thereDirect exporting Involves a company selling goods directly to a customer in an international marketaMost important types of customers for direct exporting areiImportersoperate by importing goods into their countryUseful because they have researched the local market and are confident they can sell goods they importiiWholesalerscompanies that purchase goods in bulk and distribute them to retailers or other customers in the local marketUseful because they have an established customer baseiiiDistributorsWholesalers that only carry noncompeting lines of goodsivRetailersCompanies that sell to end consumersvGovernment procurement departmentslocal government departments that seek out providers of goods and services that are required for servicing the publicviConsumerscustomers that can be reached directly using sales methods such as television promotions ecommerce doortodoor sellingFinding CustomersbIf a company wants to export they should contact its countrys embassy in foreign markets which will provide them with valuable information and important business contactscOnce a distributor retailer or wholesaler is found the following questions should be askediDoes the business have a solid financial backingiiDoes the business have a reputation for paying invoices on timeiiiDoes the business have a wide coverage of the target marketivHow much stock will the business holddMake sure the business you deal with trades in ethical waysGovernment ProcurementeGovernment departments are excellent customers as they account for 20 of a countrys GDPfCompanys also have prestige when they are able to be known as government suppliersgSee page 429 for list of questions to answer before dealing with governmentsBusiness ModelshA wide range of business models to accomplish this can be usediHaving en export department within the companyiiEstablish a sales office in the target marketiiiEmploy overseas sales personnelivSelling to an intermediary or by contracting an agentcompanies new to direct exporting should start with thisvAgent Represents the company on a commission basis and can engage in promotional work or help establish dealsiSee table 33 for advantagesdisadvantages of using agents vs distributorsAdvantagesDisadvantages of Direct Exporting jAdvantages of direct exportingiCompany controls its manufacturing process and the process is based in the companys facilities
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