Page 209 - Marketing the Basics 2nd

gloBal Marketing 201
income which flows from years of hard work. However for publicly traded companies or for firms with younger owners growth is a necessity. The stock market looks to firms for regular growth, year in, year out, if they don’t deliver, their stock price will decline – which if it goes on too long will mean a cry for a new CEO.
Other things to consider when you are thinking about which market to enter first is, have we had multiple requests from the country for our product? Often first export sales occur often almost by serendipity. A firm from another country hears about our products and calls to order. For many, the initial reaction is go away, don’t bother us, it is too much work to send our product to you. One of these foreign firms just keep working on us, perhaps offering a considerable price premium to service them, we break down and do. Humble beginnings but many a large firm has started out this way.
HOW TO ENTER THE COUNTRY, OR MODE OF ENTRY
Once a firm decides to target a particular country it has to decide the best mode of entry. That is, should it indirectly export, directly export, license its product to another firm, form a joint venture or use direct investment. This is a critical decision which we will spend some time on next. Over time as the firm enjoys or doesn’t enjoy success it may well evolve in an intelligent design from one form to a more committed form. Firms often start with more of a toe in the water approach by only indirectly exporting, the form which takes the least commitment and resources, but as they do well move to a more committed form of international activity.
INDIRECT AND DIRECT EXPORT
This is the normal starting place for most firms. Occasional exporting is a relatively passive phase, which we talked about earlier, where the firm exports from time to time almost under protest. Active exporting takes place when the firm makes a commitment to expand into a particular market or markets. Companies typically start with indirect exporting, using independent intermediaries.
Domestic-based export merchants buy the vendor’s products and then sell them on their behalf abroad. Domestic-based export