The exporter has to make an important decision in respect of entry in overseas markets. The exporter needs to follow a certain procedure in the selection of overseas markets. The market selection process is as follows:
1. Determine Export Marketing Objectives: Before entry in overseas market, the exporter must list out export marketing objectives. The export marketing objectives may be as follows:
• Increase in market share.
• Increase in profits.
• Building firm’s goodwill, etc.
2. Collection of Information: The exporter must collect relevant information from the overseas markets. The information may be in respect of the following:
• Demand for the product.
• Nature of consumers.
• Political situation.
• Import regulations.
• Infrastructure facilities, etc.
3. Analysis of Information: The exporter has to analyze the collected information in respect of overseas markets. Such analysis is required to shortlist the overseas markets. For instance, the exporter has to analyze the likes and dislikes of the buyers, the purchasing power, buying pattern, etc.
4. Short Listing of Markets: After analysis of the overseas markets, the exporter must shortlist the markets. The main objective of short listing is to arrive at a list of few markets/ countries, which promise good returns not only in the short term but also from the long term point of view.
5. Detailed Investigation of Short Listed Markets: The exporter should undertake detailed investigation of the short listed markets. The detailed investigation is in respect of competition, demand, consumers, government policies, availability of intermediaries, etc. The exporter may even visit the short listed overseas markets to conduct detailed investigation.
6. Selection of Markets: After detailed investigation of the short listed markets, the exporter would then proceed to select the overseas markets. The exporter should eliminate such markets which are subject to high rate of inflation, government instability, high trade barriers, and so on. The exporter may select only those markets or countries, which would provide a good return investment not only in the short run but also from the long term point of view.
7. Entry in Overseas Markets: The exporter then makes necessary arrangements to enter in the overseas markets. He-may appoint the required sales people, and intermediaries. He should complete all other formalities regarding the entry in overseas markets. He would then produce the goods as per the requirements of overseas buyers.
8. Follow-up: The exporter should undertake a review of the performance in the overseas markets. Such review would enable the exporter to know which markets are performing well, and which ones are not. He would then find out the reasons for the same, and if there are problems, he would try to resolve such problems, or exit from such markets that do not provide good potential.
Latest posts by MT UVA BMS (see all)
- International Finance Important Question Bank – MT UVA BMS - May 5, 2014
- Special Studies in Finance Chapter-wise Important Sums for practice - November 25, 2013
- Operations Research Important Questions 2013 – MT UVA BMS - April 22, 2013