There are numerous approaches to penetrate a foreign
market, and within each approach as many variations as there are cultures, languages,
currencies, etc.
* Domestic Export Sales
* Indirect Export Sales
* Direct Export Sales Through
Outside Distribution Channels
* Direct Export and Sales Through
Local Company Sales Organization
* Licensing
* Assembling
* Manufacturing
* Joint Venture
* Strategic Alliances
* Combinations of some of the above
* Others - approaches tailored to
the prevaling conditions of a specific market.One
of the major ingredients for succes is to choose the right alternatives. How to choose the
right alternatives and make the most of them are constant problems facing every business.
At this stage of your international market penetration planning, experienced, hands-on
professionals would be of great help.
Some of the alternatives are defined as:
* Domestic Export Sales
We also call the Domestic Export Sales "spot sales" and "export
sales desk". These sales are mostly "orders taking", orders
coming from domestic organizations which might have overseas subsidiaries or from
export/import houses that buy and sell for their own customers. These sales might also
include bid on tenders from foreign governments, or private organizations, with buying
offices in the domestic markets. Tenders issued by a foreign entity, in the foreign
market, to be transacted locally, require a different approach and organization than a
mere "export sales desk".
* Indirect Export Sales
It is basically marketing your products or services through another company
or sales agency. It could be an import/export house, an export managing firm or just a
company that already has an international distribution network.
* Direct Export Sales Through Outside Distribution
Channels
Direct sales to the foreign market through middlemen such as distributors,
sales agents, brokers, importers, jobbers, etc.
* Direct Export and Sales Through Local Company
Sales Organization
- Create your own branch office and/or subsidiary
- Create a joint selling company
- Create your own sales force
- Set up regional and/or distribution centers or warehouses
- Hire services and rent facilities of public warehouses
- Use combination od company distribution centers and public warehouses
- Organize an international franchise system
- Team up with another manufacturer or several
- Combinations are endless in this approach and would be affected by the
host country's regulations.
* Licensing
- License a patent and/or know-how for royalty payments and fees and/or
equity
- Obtain licenses for foreign patent and/or know-how
* Assembling
- Entitle foreign manufacturers to assemble, or produce and assemble, with
or without license, your equipment or products.
- Cross-license foreign manufacturers for the same type of operations, as
described above, but with an option to assemble, or produce and assemble their equipment
and products.
- Set up assembly operations in a free trade zone of free port.
* Manufacturing
- Contract out manufacture of products.
- Purchase an equity interest in an existing manufacturing or assembly
operation.
- Set up manufacturing operations in a free trade zone of free port.
* Joint Venture - Strategic Alliances
- Organize a joint ventureo r Strategic Alliances with a local partner.
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