Export Models: Direct, Indirect, and Agreed
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ScribdTranslationsExport Models: Direct, Indirect, and Agreed
Translated by
ScribdTranslationsEXPORT MODELS
Students:
Susan Vindas
Marcos Carmona
Jeilin Zuñiga
Course: International Market and Trade
Concept of
Exportation:
An export refers to any legitimate good and/or service that the
producing or exporting country (the exporter) sends as merchandise to a
third party (importer), for their purchase or use.
It involves producing goods in the local market and selling them in the
foreign markets.
It is the most traditional and most established way to operate.
internationally, and it is usually the way in which the
companies start their international activities, since
it allows to avoid many of the fixed costs of doing business
abroad.
Model of
Direct Export:
It is the marketing of goods between an organization and a customer.
exterior. Hello, directly and without intermediaries.
This type is an active export since the same company is the one that seeks.
contacts abroad, manages the documentation, physical distribution and the
establishment of pricing and branding policies.
In this case, a greater commitment to is maintained
resources and a greater improvement in the control of the
operations.
Direct export may not be the best
alternative for small businesses, as it requires
of many resources. It is more advisable for
organizations that can cover the expenses of a
export department and also have a
ample legal department so that they can manage
the correct way the processes before the involved countries.
The companies that use this modality are companies that are
interested in keeping track of the dynamics of their products
in the target market, and be sure that they do not have
transformations at the time of sale.
Using this export method works when the market
The objective is easily accessible, that is to say where the internal dynamics
from other countries is very similar to that of the exporting country.
ADVANTAGES DISADVANTAGES
It allows the development of channels of
distribution in the target country. Marketing and market research expenses can
It is easier to monitor the reception of the become a sunk cost, if the company fails in
products in the target market, improving position oneself.
the feedback process. From this Investment in market studies is greater, given that the
it facilitates decision-making in The exporter must be familiar in detail with the characteristics of
regarding production volume and strategies market.
of marketing. In case of return, the costs incurred are higher in
Since there is no intermediary, there is no comparison to when you have a local partner.
conflict of interest regarding the The risk of damage or loss of merchandise during the
objectives that the company wishes to achieve. Shipping costs are the responsibility of the exporter.
The exporter has control over the process. There is a possibility of erring when entering the market due to lack of
for the shipment of goods. Therefore, it is in charge of of knowledge. Furthermore, the legislation must be known
transport, logistics, licenses and the from each country, since it takes care of the transfer process.
insurance payment.
There is greater flexibility to manage the
entry and exit of the target market.
Example of companies that use the Export Model
Direct
Apple:
Apple, for example, they sell their products.
electronics in Europe using its own subsidiary and
using both sellers as a commercial network
authorized as own stores.
Automotive companies:
When they sell vehicles not produced in a
determined country, in this case using networks of
dealers.
Export Model
Indirect
It is the model in which the exporting company uses the services of intermediaries, normally.
installed in the local market itself, which are the ones that carry out the export.
The exporting company is limited to accepting or rejecting the price proposed by the buyers, which is
They are in charge of the export operations and the marketing mix policy is determined by the intermediary.
The company only makes the modifications to the product that have been agreed upon.
Sale to a Market Responsibility Shipping and
intermediaries International the documentary marketing
o
The intermediaries:
Intermediaries are companies specialized in the marketing of goods in certain markets.
Therefore, they have the ability to reduce shipping costs and understand distribution channels.
more suitable.
The most common intermediaries
Intermediate
son
Purchased
r Agent
foreigner
Company
Commercial
Merchant
Consortium of
exportation
Advantages Disadvantages
It is an affordable option for
enter a market in
comparison with export
direct.
What is it for? The export process is clear
export and transparent for the exporter, The exporter relinquishes margin of
since the intermediary assumes the
indirect? profit to the intermediaries.
transport responsibilities and The handling of marketing and
distribution. Likewise, the marketing in the market
the intermediary will be responsible for
The objective is carried out by the intermediary.
It is a good alternative organize the documentation Therefore, it is part of the control over
para las empresas corresponding before the the products that it cedes
small, because not authorities of both countries. producer.
The producer does not require Generally, the producer tends to
you have to invest in
experience, skills or to be unaware of the business dynamics
trained personnel in deep knowledge about the in the destination country.
export processes export process. Therefore, not
requires making investments in
said area.
The risks associated with are eliminated.
damage from the shipment for the
exporter.
Export Model
Agreed:
The coordinated export brings together several.
manufacturing companies that are interested in exporting to the
same countries. This common interest allows them to share
technology, knowledge, experience, and even a
same commercial network to establish its products in the
market more convenient for them.
Agreed export formulas:
The piggyback or kangaroo export. The exporting company The export consortium. The companies
distributes its products abroad through the channels or competing locales or with product lines
distribution subsidiaries of another established company in the complementary partners work together to carry out a
market. common export.
The commercial joint venture. It is about a company
created by two or more companies to market
a product.
In this way...
Expenses are shared, improving their entry options in the market.
and a safer export of your goods is achieved.
At the moment of internationalizing a business activity it is
it is necessary to have partners who facilitate administrative processes or
that ensure a good system of collections and payments in the desired currency.
Conclusion...
This export model involves the collaboration of the company.
exporter with other manufacturers including various modes of
very different entries that always imply the
collaboration of the exporting company with the help of one or
several manufacturers.