Foreign market penetration











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The basic philosophy behind stage one is extension of programmes and products, behind stage two is decentralisation as far as possible to local operators and behind stage three is an integration which seeks to synthesize inputs from world and regional headquarters and the country organisation. Special features of commodity trade As has been pointed out time and again in this text, the international marketing of agricultural products is a "close coupled" affair between production and marketing and end user. In marketing products from less developed countries to developed countries point iii poses major problems. Huge investments may have to be undertaken, with the investor paying a high risk price, long before the full utilisation of the investment comes. Nali was able to grow into a successful commercial enterprise. Countertrade By far the largest indirect method of exporting is countertrade.

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How To Enter A Foreign Market

For example, in the exporting of African horticultural products, the agents and Dutch flower auctions are in a position to dictate to producers. New market opportunities may be made available by expansion but the risks may outweigh the advantages, in fact it may be better to concentrate on a few geographic areas and do things well. Its major success has been the growing and exporting of Birdseye chilies. It is interesting to note that Korey 5 warned that direct modes of market entry may be less and less available in the future. Clearing account barter, also termed clearing agreements, clearing arrangements, bilateral clearing accounts or simply bilateral clearing, is where the principle is for the trades to balance without either party having to acquire hard currency.

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International market entry strategies

In turn, the trader may forfeit a portion of the discount to sell these products for hard currency on the international market. Management Decision", Vol. Khoury 6 categorises countertrade as follows see figure 7. Those who decide to license ought to keep the options open for extending market participation. Where the seller has no need for the item bought he may sell the produce on, usually at a discounted price, to a third party. If the firm achieves initial success at exporting quickly all to the good, but the risks of failure in the early stages are high.

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Description: In turn, the trader may forfeit a portion of the discount to sell these products for hard currency on the international market. Whilst most developing countries are hardly in stage one, they have within them organisations which are in stage three. In direct exporting the organisation may use an agent, distributor, or overseas subsidiary, or act via a Government agency. In building a market entry strategy, time is a crucial factor. Structure Of The Chapter The chapter begins by looking at the concept of market entry strategies within the control of a chosen marketing mix. However it is being now hampered by a number of important "exogenous" factors. Growing trading blocs like the EU or EFTA means that the establishing of subsidiaries may be one of the only means forward in future. Passiveness versus aggressiveness depends on the motivation to export. The contract's value is expressed in non-convertible, clearing account units also termed clearing dollars that effectively represent a line of credit in the central bank of the country with no money involved.
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