Suppose you have done all the necessary foreign market research required and selected an ideal foreign market for your product. In that case, you now need to decide how to enter the market concerned. When devising your export marketing plan, you could construct a number of ways to enter the foreign market and establish your business. This article focuses on the four main export market entry strategies, i.e., indirect exporting, direct exporting, joint venturing and foreign direct investment.
What is a Foreign Market Entry Strategy in International Marketing?
A foreign market entry strategy is the strategy you implement to get your products in an identified target market. Different export market entry strategies require varying degrees of financial resources, time, and expertise. The four main foreign market entry strategies are indirect exporting, direct exporting, joint venturing and foreign direct investment.
What does Indirect Exporting mean in International Marketing?
Indirect exporting is the process of selling products to a local intermediary, for example, a trading house, which will then sell your products directly to customers or importing wholesalers in the foreign market. Indirect exporting involves the least amount of investment and risk for the exporter and is the equivalent of a domestic sale.
What does Direct Exporting mean in International Marketing?
Direct exporting occurs when the manufacturer performs the export task rather than delegating it to others. The tasks of market contact, market research, physical distribution, documentation completion, pricing, etc., all fall on the exporter.
What does Joint Venturing mean in International Marketing?
An international joint venture is often described as the joining together of two or more business partners from separate jurisdictions to exchange resources, share risks, and divide rewards from a joint enterprise. Licensing arrangements and franchise agreements are popular forms of a joint venture.
What does Foreign Direct Investment mean in International Marketing?
Foreign direct investment (FDI) usually involves the investment by a local company in foreign-based assembly or manufacturing facilities, or service operations. FDI requires significant financial resources and a thorough understanding of the international business environment.
Understanding the international marketing environment and how best to approach marketing for exports is vital in ensuring your business’s global success. However, you should consider several crucial factors before attempting to sell your products abroad. Thankfully, Trade Forward Southern Africa, in collaboration with the International Trade Institute of Southern Africa, has created the TFSA School of Export to get you started on your export journey. Join our community, and let’s grow together! Click the links below and sign up for FREE.
To sign up to the School of Export CLICK HERE.
If you already have a profile, CLICK HERE to login to begin the module.