Show Summary Details

Quick Reference

A discipline within international marketing that concentrates mainly on the sale of products created in the domestic market to overseas markets. Exporting is usually the first stage in full-scale international marketing and foreign market entry. Exporting is also a central component of international trade negotiations as well as multilateral and bilateral trade agreements. Exporting is also a barometer of the strength or weakness of the domestic economy and partly determines the balance of trade. There are several ways to export. The way in which a company chooses to export its products can have a significant effect on its international market strategies. The basic categories of exporting all relate to the exporter's level of involvement in the export process. There are at least three approaches, which may be used alone or in combination:Passive exporting, in this approach, orders are received from foreign buyers and fulfilled domestically and shipped to the buyer. Alternatively, sales are made to domestic buyers who then export the product to overseas buyers. These sales are indistinguishable from other domestic sales as far as the original manufacturer is concerned. Someone else has decided that the product in question meets foreign demand. That party takes all the risk and handles all of the exporting details, in some cases without even the awareness of the original seller.Active exporting, this approach is when the company seeks out domestic export merchants or agents or companies who represent foreign customers. These buyers are a large customer market for a wide variety of goods and services. In this case, a company knows that its product is being exported, but it is still the intermediary who assumes the risk and handles the details of exporting. This is known as indirect exporting. The chief characteristic of indirect exporting is that the export of products is carried out through intermediaries. It is also a lower risk and lower cost option for international exporting. It involves no direct investment in the foreign markets. With this approach, a company engages the services of an intermediary firm, agents, or merchants capable of finding foreign markets and buyers for its products. Export management companies, export trading companies, international trade consultants, and other intermediaries can give the exporter access to well-established expertise and trade contacts.Direct exporting, this approach is the most ambitious and most difficult, since the exporter personally handles every aspect of the exporting process from market research and planning to foreign distribution, fulfilment, and collections. Consequently, a significant commitment of management time and attention is required to achieve good results. It also requires greater investment and research to be successful. However, this approach may also be the best way to achieve maximum profits and long-term growth and grow into a fully international company. The direct exporting company will most likely set up an export department within its own company. Additionally, the company will set up sales offices in foreign markets to handle storage, distribution, sales, servicing, and marketing. Alternatively, the company may recruit foreign sales agents who exclusively represent the product in that territory.


Subjects: Marketing.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.