Copyright? 2001 by Harcourt,Inc.,All rights reserved,Requests for permissions to make copies of any part of the work should be mailed to
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INTERNATIONAL MARKETING 6e
The Export Process
Chapter 8
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-2
Motivations to Internationalize
Proactive Motivations
Profit advantage
Unique products
Technological advantage
Exclusive information
Managerial urge
Tax benefit of a Foreign Sales Corporation (FSC)
Economies of scale
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-3
Motivations to Internationalize
Reactive Motivations
Competitive pressures
Overproduction
Stagnant or declining domestic sales
Excess production or service capacity
Saturated domestic markets
Proximity to customers and ports
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Change Agents
Internal change agents
Enlightened management
New management
Significant internal event
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Change Agents
External change agents
Foreign demand
Other firms and distributors
Banks and other service firms
Chambers of commerce
Export agents
Governmental activities
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Export Involvement
Key managerial characteristics affecting the
desire for export involvement
Education
International Exposure
Expertise
International orientation
Commitment
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Exporting and Internationalization
Internationalization stages
Innate,or start-up,exporters
Partially interested exporter
Experimental exporter
Export adaptation
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Exporting and Internationalization
Firm-level stages of internationalization
Stage 1,The completely uninterested firm
Stage 2,The partially interested firm
Stage 3,The exploring firm
Stage 4,The experimental exporter
Stage 5,The experienced small exporter
Stage 6,The experienced larger exporter
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-9
Exporting and Internationalization
Given that the firm you are working
for fits with the profile of a
“completely uninterested firm”
How do you help the firm to be
interested in exporting?
Personal effort
External information
Strategy
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-10
Exporting and Internationalization
Given that the firm you are
working for fits with the profile
of a,partially interested firm”
How do you help the firm to be
interested in exporting?
Personal effort
External information
Strategy
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-11
Exporting and Internationalization
Given that the firm you are
working for fits with the profile
of a,export exploring firm”
How do you help the firm to be
seriously interested in exporting?
Personal effort
Financial sources
Strategy
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-12
Exporting and Internationalization
Given that the firm you are
working for fits with the profile
of an,experimental exporting
firm”
How do you help the firm to be
seriously interested in exporting?
Personal effort
External information
Strategy
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-13
Exporting and Internationalization
Given that the firm you are
working for fits with the profile of
an,experienced small exporting
firm”
How do you help the firm to be
interested in exporting?
Personal research on financial sources
External information
Strategy
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-14
Exporting and Internationalization
Given that the firm you are
working for fits with the profile
of an,experienced large
exporting firm”
How do you help the firm to be
interested in exporting?
In the area of customer service
Strategy
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The Partially Interested Firm and Exporting
Main corporate concerns
Financing
Information on business
practices
Communication
Providing technical advice
Sales effort
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The Exploring Firm and Exporting
Main corporate concerns
Communication
Sales effort
Marketing information gathering
Information on business practices
Obtaining financial information
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The Experimental Exporter
Main corporate concerns
Sales effort
Obtaining financial information
Physical product
Marketing information gathering
Information on business practices
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The Experienced Small Exporter
Main corporate concerns
Communication
Sales effort
Marketing information gathering
Obtaining financial information
Handling documentation
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The Experienced Larger Exporter
Main corporate concerns
Communication
Sales effort
Marketing information gathering
Providing repair service
Information on business practices
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A Model of the Export Development Process
Domestic
Expansion
Uninterested
Firms
Change Agents
External
Internal
Alternative
Strategies
Indirect
Exporting
Licensing
Franchising
Export
Awareness
Export
Interest
Export Trial
Export
Evaluation
Export
Adaptation
Information
Experience
Perception
Further
Activity
Direct
Foreign
Investment
Concerns
Information
Mechanics
Communication
Sales Effort
Service
Delivery
Regulations
Stimuli
External
Internal
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Corporate Strategy and Exporting
The perception of rising risks during export
initiation
The decrease in immediate,short-term
profitability associated with the costs of
initiating exporting activities
The long-term decrease in risk due to market
diversification,away from,domestic only”
with greater profit potential in expanded
markets
Focus on export effectiveness,efficiency,and
competitive strength
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-22
Profit and Risk During Export Initiation
Market
GapProfit
Risk
Export Experience
(Transactions x Customers
Copyright? 2001 by Harcourt,Inc,All rights reserved,8-23
Exporting and Internationalization
Discussion:
Explain why the American export
practice is usually known as
reactive when compared to
European and Japanese exporting
experience.