GMS 400 Lecture Notes - Lecture 7: Test Market, Technology Transfer, Offshoring
Document Summary
Determine what has made the product popular domestically (sources of competitive advantage). Exporting: selling product from home country production into a foreign market. Direct exporting: the company sells directly to foreign buyers (end-users, distributors, retailers) Indirect exporting: selling through home country agencies e. g. trading houses: two types: export merchant buys the product from you in canada, export agent sells the product overseas for a commission, but does not buy it. Distributor: a foreign merchant, usually with exclusive sales rights in a country or territory: sells to retailers, advertising should be local, service must be in place before the first product is sold. Sales office (part of your firm) in a large market. Advantages: better knowledge of market culture and language, trading house already has contacts and distribution, good way to test market cheaply and quickly, no in-house marketing team. Disadvantages: loss of profit, loss of control of product: may hurt reputation, no direct access to customers for feed-back.