UNIT-2
Export Distribution and Promotion
A distribution channel is a means through which goods are moved from the place of production to the place of consumption.
Exporters may consider direct distribution channels. A better approach to channel is to start with the final buyer is/are most effective.
Following are the main factors that influence channel selection:
1. Customer Characteristics:
An exporter may consider customer characteristics in the of distribution channels
(a) If the customers are large in number and are located in several countries, the export firm may select indirect distribution channels as it may not be feasible to reach to large number of customers in different markets. For instance, an exporter of consumer goods may adopt indirect channels
(b) If the customers are few in number and the exporter exports in only one export market; the export firm can select direct channel as it may be possible for the firm to serve directly to the customers. For instance, if an exporter caters to few industrial buyers in few export markets, the exporter may select direct exporting channel.
2. Product Characteristics:
Product characteristics include product class and product features like durability, shape, size, design, etc.
(a) In the case of high priced luxury goods like Rolls Roy, Lamborghini. Bentley, etc., the exporter may adopt exclusive distribution through one or two showrooms especially in the major metro cities of a particular country.
(b) In case of FMCG products, the exporter may adopt indirect channels, because the number of buyers are large and buy in smaller quantities in different countries.
(c) In case of perishable items like vegetables, meat products, etc., the exporter may select shorter indirect channels to avoid re-handling and spoilage.
3. Company Profile:
A company's corporate image, resources, and distribution capabilities influence the selection of distribution channels:
(a) If an exporter has limited resources, it will have to depend on intermediaries, and therefore, it will select indirect channels in overseas markets.
(b) If an export firm has a distinct image in the overseas markets, it may select reputed dealers in the overseas markets.
(c) If an export firm has a strong network of its sales representatives in overseas markets, it will make efforts to distribute the goods through direct channels.
4. Competitors' Distribution Strategy:
Generally, a firm may consider the distribution strategy of its competitors in the choice of channel selection. Normally, a marketer may use the same channel that is used by the competitors.
(a) Almost all exporters of FMCG goods use indirect channels to distribute the product.
(b) In case of certain industrial goods such as heavy machinery and equipment, most of the firms resort to direct channel.
5. Area Coverage:
An export firm may consider the area coverage in the choice of distribution channel:
(a) If an export firm exports in only one or two overseas markets and if it caters to few customers; it may resort to direct exporting.
(b) If an export firm exports to several overseas markets and that too to a large number of buyers, it may select indirect channels.
6. Middlemen Characteristics:
The characteristics of middlemen, such as their resource strengths and capabilities, must be considered.
(a) A firm may distribute the products through sole selling agents, especially when the agents have their own distribution facilities such as warehouses, showrooms,
delivery vehicles, etc., the company may go for indirect channels.
(b) Sometimes, retailers may be reluctant to stock goods with higher price; the company may resort to direct selling.
7. Economic Conditions:
Economic conditions prevailing in the overseas markets are considered for selection of distribution channels:
During recession, middlemen may be reluctant to stock products unless they are provided with extra incentives such as ‘push commission'. Therefore, during recession, if extra incentives to middlemen are not feasible, the export firm may resort to direct channel of distribution, especially in few markets. For instance, to sell readymade garments during recession, a garment exporter may take part in trade fairs and exhibitions and sell the products directly to the customers.
8.Technological Factors:
The technological factors also influence channel selection. For instance, technological developments in telecommunications have made it possible for home shopping via telemarketing. Also, internet has made it possible for customers to place direct orders on-line, thereby, eliminating the need for intermediaries.
9. Size of the Orders:
The size of the order may influence the choice of channel selection. Normally, when a company receives large size orders and that too from few customers, it may prefer direct channel to serve the customers. However, when a firm get small size orders from large number of customers, it may adopt indirect channels.
In direct exporting. the exports are undertaken directly manufacturer. The manufacture firm makes its own arrangement to export its products ether within the existing sales network or by creating a separate export department or division. exporters are known as Manufacturer Exporters
The direct exporter may take the benefit or any or a combination the following arrangements to book orders:
Appointing agents / distributors in overseas markets.
Deputing sales representative abroad.
Opening sales offices abroad.
Direct booking of orders through correspondence.
Advantages of Direct Exporting:
The direct exporter enjoys the following advantages
1. Reputation:
The direct exporter can earn a good name in the domestic market as well as in the export markets. He can earn a good name by providing good quality goods and services.
2. Optimum Production Capacity:
If a manufacturer sells only in the domestic market, then h may not be able to make optimum use of production capacity due to lack of demand in the domestic market. Exporting overseas would enable him to make optimum use of production
3. Spreading of Risks:
The direct exporter can spread business risks by exporting to several overseas markets. If he sells only in domestic market there may be business risks due to recession, or other reasons.
4. Export Obligation:
At times, the manufacturer may have to fulfill export obligation due to import of machinery under the Export Production Capital Goods (EPCG) Scheme. The manufacturer exporter can fulfill export obligation by direct exports.
5. Direct Control:
The manufacturer exporter can have a direct control over export marketing. He can have a control over pricing, packaging promotion, after-sale-service, etc.
6. Export Incentives:
The direct exporter can claim a number of incentives such as duty drawback, exemption from income tax, exemption from sales tax, refund of excise duty, etc.
Disadvantages of Direct Exporting:
1. Higher Risks:
Direct exporting involves more risks because of manufacturing risks, sales risks and also credit risks. Export through merchants exporters would reduce sales and credit risks.
2. More Investment:
The direct exporter requires more investment. He has to invest in manufacturing activities such as plant and machinery. He also needs to invest in marketing activities such as showrooms after-sale-service centres, etc.
3. Lacks Specialisation:
Direct exporter requires concentration on both marketing and production aspects. However, if exported through intermediaries, he can concentrate only on production aspects.
4. High Overheads:
The direct exporter has to bear high overheads. He has to bear production overheads as well as marketing and distribution overheads.
5. Problem for Small Manufacturers:
Small firms may find it difficult to export directly on their own. They may depend on the merchant exporters or on marketing cooperatives to export their products.
6. Less Economies of Distribution:
The direct exporter may not be able to reap economies of large scale in respect of distribution. The merchant exporter can however, enjoy such economies, as he can combine several shipments together.
The manufacturer does not directly export to foreign buyers. The manufacturer exports through intermediaries, such as:
(a) Merchant Exporters,
(b) Export Houses,
(c) All forms of Trading Houses,
(d) Export Consortia, etc.
Advantages of Indirect Exporting:
1. Less Risks:
The manufacturer who exports indirectly through intermediaries has to bear less risks. He has to bear only manufacturing risks and not selling risks.
2. Less Investment:
The manufacturer requires less investment as he need not invest in export marketing infrastructure. He has to invest only in the production field.
3. Specialisation:
The manufacturer can concentrate only on his production activities. Thus he can specialise in production. The marketing activities are looked after by the intermediaries.
4. Suitable to Small Firms:
The indirect method of exporting is more suitable to small firms. This is because small firms face a number of problems in negotiating and selling their products in the international markets. They can export their products through intermediaries or marketing cooperatives.
5. Technical Guidance:
The manufacturer can obtain technical guidance for the manufacture of products from the export houses through whom he exports.
6. Less Overheads:
The indirect exporter has to bear less overheads as compared to direct exporter. This is because the manufacturer has to bear only production overheads.
Disadvantages of Indirect Exporting:
1. Lower Profits:
The manufacturers may get lower profits. This is because; the margin of the merchant exporters and other intermediaries is included in the consumer price.
However, in the case of direct exporting, there is no question of including the margin of merchant exporters in the consumer price, and therefore, the manufacturer exporter may get higher profits.
2. Less or No Export Incentives:
The manufacturer may not get incentives. This is because, the intermediaries who export in their names can claim the incentives offered on exports.
3. Lack of Positive Support from Intermediaries:
At times, the intermediaries may not give positive support to the manufacturer. This means, the intermediaries may promote the exports of only a few manufacturers with whom they have better relations.
4. Second Hand Information:
The manufacturer may not get firsthand information of the export markets. At times, the intermediaries may not provide necessary information on time.
5. Lack of Control:
The manufacturer may not have direct control over export packaging, pricing, promotion and other marketing activities. The intermediaries may undertake such activities. This may affect the sales of the manufacturer.
6. Lower Sales:
The manufacturer may not be able to get more sales through the intermediaries. This is possible when certain intermediaries favour and promote the export sales of certain manufacturers.
The Logistics is a network of people, organisation, technology, activities, information and resources involved in movement of products from the supplier to the customer. Therefore, logistics include information, customer order processing, inventory management, material handling, logistical packaging, transportation and warehousing.
1. Information:
Logistics is essentially an information based activity of inventory movement across a supply chain. Information system plays an important role in delivering superior service to customers.
IT is used for collecting, storage, analysis, and transmission of data in respect of all components of logistics, order processing inventory management, transportation, warehousing, and materials handling. A well-managed information system enables efficient performance of the various components of logistics.
2. Customer Order Processing:
It involves receipt of orders and processing of order so that the ordered products reach to the customer at the right time and at the right place.
Order processing is closely linked to the firm's customer service standards. Based on the customer service standards, the company makes every possible effort to deliver the products to the customers.
The order processing section must verify the following:
Location of the delivery.
Specifications of the order.
Delivery schedule.
Payment terms and conditions.
3. Warehousing:
Warehousing involves the storage of products. The warehouses can be grouped under two broad categories:
• A storage warehouse keeps products for relatively long periods of time and is used most often for products that are seasonal in supply or demand.
• A distribution warehouse is used to gather and redistribute products. Distribution warehouses keep products for a time as short as possible. They are mainly used by manufacturers that have several small customers at different locations.
Major warehousing decisions in warehousing include:
Size and number of warehouses.
Ownership of warehouses— owned or hired.
Location of warehouses.
Design and layout of warehouses.
4. Transportation:
It facilitates the movement of goods from the supplier to the buyer. The form of transportation used to ship products depends primarily on the kind of product, the distance, and the cost. The physical distribution manager has an option to choose from a number of companies and modes of transportation.
Transportation Modes: The movement of goods can take place through various modes of transport such as air, road, rail, water, and pipeline (for gas). The choice of mode of transportation depends on certain factors such as nature of goods, location of the customer, cost of transportation, etc.
5. Materials Handling:
Material handling refers to the activity of moving items within plants, warehouses, transportation terminals and retail stores. Equipment used to handle goods includes forklift trucks, conveyor belts, and trucks.
Unitization and containerization have improved materials handling in many ways:
• Unitization-combining as many packages as possible into one load that can be handled by a forklift truck. It is sometimes done with steel bands or shrink packaging.
• Containerization-putting packages, usually made up of several unitized loads into a form that is relatively easy to transfer.
Improved material handling has reduced product damages, delays in deliveries, theft and incidental overheads. For selecting the right material handling system, the company considers the volume and weight of load, the speed required for material movement and the level of delivery service to be offered to the customers.
6. Inventory Management:
Inventory management is concerned with maintaining the right level of inventory to meet customer requirements at the lowest cost. Inventory management tries to achieve a balance between costs of maintaining inventories and customer satisfaction. To reduce inventory costs, many firms use computerized inventory control management systems.
The company should maintain right level of inventory. Over-inventory and under-inventory is to be avoided.
Over- inventory blocks working capital,
Under- inventory affects delivery schedules.
7. Logistical Packaging:
Logistical packaging is an important element of logistics network. Logistical packaging is different from product packaging. Logistical packaging performs several functions:
Protective function - logistical packaging protects the product from damage during transit.
Storage function— logistical packaging facilitates the storage of the product.
Information function- the packages are marked in such a way that the products in it are easily identified-by colour pictures or labels. Also proper handling instructions are listed on the packages especially in the case of fragile, perishable, and inflammable products.
Transportation function -it facilitates the transportation of the products from one place to another.
Handling function -it facilitates the loading and unloading of goods.
The different logistics functions of packaging, i.e., protection, storage, transport, information and handling provide a good example of the interdependencies that exist in logistics.
In international trade there are mainly four modes of transports namely, road, sea, rail and air. It is necessary for companies to choose the right mode of transport to ensure that the goods reach to the buyers in proper condition and at the right time. In case of certain products, there is only one mode of transport which is feasible. For instance, In the case of export of diamonds, air transport is more feasible. However, in case of several products, alternative modes of transport are possible. Therefore, there is need to select best mode of transport considering the time factor, freight charges, etc.
In order to select the best alternative, the company hiring the shipper must evaluate the following factors:
1. Logistic Feasibility:
The export firm must consider the logistic feasibility to consider the right mode of transport. For instance, in certain countries there is no feasible means of transport or the quality of mode of transport may be not suitable. For instance, rail or land transport may not be available between to trading nations or if available, the land (road and rail) transport may not be in good condition as is the case of several developing countries. Therefore, the options available would be air transport or sea water) transport.
2. Stowage of the Cargo:
Stowage is the amount of space available for stowing materials aboard a ship, rail or an airplane.
Stowage involves the placement or lading of cargo in an aircraft or on the rail or on the ship in such a way that it gives maximum Space usage, and allows easy access to the cargo at the point of offloading.
For example: An exporter who wants to export goods from Mumbai to Shanghai in China in several containers may select sea transport as compared to air transport because container shipping provides huge space at lower freight rates.
3. Value of the Goods:
Freight charge in air transport is costlier as compared to land transport and the least expensive is the sea transport. Thus, if the merchandise is of low value and large quantities, it is better to avoid air transport, and instead select the sea transport. However, air transport is viable mode of transporting precious minerals or items such as diamonds.
4. Shipping Quantity:
An exporter must consider the volume and weight of the consignment:
If the export quantity of a consignment is large, the exporter may choose sea transport.
If the export quantity of one consignment is low, the exporter may choose air transport depending upon on the nature and value of goods.
5. Perishability of the Cargo:
When the cargo is perishable, it would be better to export the goods through air transport. Sea transport is less preferred due to longer transit times: the perishable cargo may get spoilt. There is no better option than air freight, although in the case of short routes, ground transportation is often a good choice. Maritime transport is less than optimal in the case of perishable goods due to transit times, which tend to be longer and may reduce the cargo's commercial life cycle. Land transport, used for short distances, may be well suited for perishable cargo.
6. Urgency of the Buyer:
The choice of mode of transport also depends on the urgency of the buyer to receive the mercandise. For instance, buyers may need certain goods quickly such as medicines, spare parts, and such other goods. In such a situation, air transport is more preferred as compared to sea and land transport. However, if urgency is not the issue, the exporter may choose sea transport and land transport for very short routes.
7. Risks Factor:
The mode of transport depends on the risks which one is willing to assume. There are certain risks associated with transportation such as loss due to accidents, loss due to sea pirates, etc. Generally, air transport is the safest, and therefore, an exporter may select air transport to reduce the amount of risks. However, the freight rates of air transport are higher as compared to sea and land transport.
8. Costs of Port Terminals:
An exporter must consider the costs of port (air and sea) terminals, and the cost of bonded warehouses. The costs vary from country to country.
Generally, the port terminal costs are highest, and therefore, it is not advisable to ship smaller consignments through sea transport. Minimum port terminal fees are charged irrespective of the quantity of cargo.
The air cargo terminals represent moderate costs, which are reduced if the merchandise is shipped (through airplane) quickly.
In case of land transport, bonded warehouses may provide lower charges but the freight charges of land transport tend to increase over longer distances.
There is a need for insurance to cover the risks in export business. Exporters suffer loss on account of various risks such as:
Commercial risks such as loss due to delay in shipment, insolvency of the buyer, etc.
Political risks such as risks due to war, revolution, civil disturbances in the importer's or exporter's country.
Legal risks on account of commercial disputes between the seller and buyer.
Cargo risks due to ship collisions, robbery by sea pirates, explosion on the vessel, etc.
Credit risks such as default of credit payment by the importer.
Exchange rate risks for the exporters when domestic currency appreciates against other currencies such as US dollars.
Risks due to natural calamities such as floods, earthquakes, etc.
Certain risks such as cargo risks can be insured with the marine insurers. Some other risks such as commercial risks, credit risks and political risks can be insured with ECGC.
The need for insurance against risks can be stated as follows:
1. Protects against Commercial Risks:
Exporters may have to suffer loss due to commercial risks such as:
Insolvency of the buyer
Failure of the buyer to make the payment on due date or after reasonable period of time.
Buyer's failure to accept goods subject to certain conditions.
Therefore, it is advisable for the exporter to obtain ECGC policy to cover against commercial risks.
2. Protection against Credit Risks:
In export trade, the exporter may extend credit terms to the importer. However, importer may fail to make payment within the due date or within a reasonable period of time. In such an instance, the exporter suffers credit risks. Therefore, the exporter may obtain ECGC policy to protect against credit risks.
3. To Protect Against Loss due to General Average Principle:
General Average is an internationally accepted principle where if certain types of accidents occur to the vessel, all parties share in the loss equally.
The exporter or importer may be required to sign a bond and/ or cash deposit in order to obtain release of the cargo following a case relating to general average principle, even though there was no loss or damage to the goods.
By insuring against general average principle event, the insurance company assumes the responsibility and expedites the release of the cargo.
4. Contractual Requirement:
The export contract may require the exporter to insure the goods. For instance, under CIF contract, the exporter has to obtain the insurance to protect against loss to the goods due to damage or destruction or theft of goods. Therefore, under CIF contract, the exporter obtains the insurance policy and pays the insurance premium.
Under FOB contract and under C&F contract, the importer has to obtain insurance policy and pay for the insurance premium. Coverage for Limited
5. Carrier Liability:
The carriers or vessels may not be responsible for certain causes of loss that occur in transit. For instance, the acts of God, or the General Average Principle, the carriers have limited risk liability. The exporter or the importer (depending on the type of contract) has to bear the major loss. In such a case, the exporter or importer obtains insurance to minimize the loss.
6. To Reduce the Time for Recovery of Loss:
If there is loss on account of damage and destruction of cargo, and if the cargo is not insured, the exporter or the importer may have to spend lot of time and effort to recover the loss from the shipping company. The time, effort and money is involved for settling the claims in the courts of foreign markets. Therefore, it is advisable to insure the loss to goods with the insurance firms so that the insurance firms can settle the claims within short period.
7. To Protect Against Political Risks:
There are various political risks in the international trade. The political risks include:
War, revolution, or civil disturbances in the buyer's country and the exporter suffers the loss to non-receipt of payment or damage to goods.
Imposition of restrictions on remittance by the government in the buyer’s country, etc.
Sales promotion is an important element of promotion-mix. The other elements include publicity, advertising, salesmanship, sponsorships, public relations, packaging, trade fairs and exhibitions, direct marketing, etc.
Sales promotion consists of various techniques or tools that induce a desired response from customers and intermediaries. Sales promotion offers certain benefits to the exporter such as:
It induces or persuades the buyers to buy the product.
It helps to develop brand image.
It develops brand loyalty.
It enables the exporter to gain competitive advantage, etc.
The techniques of sales promotion are broadly divided into three groups:
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A. Consumer-Oriented Promotion Tools:
The consumer-oriented promotion tools are aimed at increasing the sales to existing customers, and to attract new customers to the firm's product. Some of the commonly used consumer-oriented promotion tools are:
1. Combo-Packs:
A firm may provide combo packs to persuade the buyers to buy the firm's products. For example, a toothbrush may be banded or included along with a toothpaste pack. The combo pack may be provided at a discounted rate.
2. Discounts:
It refers to reduction in price on particular items during a particular period of time. This is quite common during festival season or during off-season period. It is very effective in stimulating short-term sales, especially when the firm offers genuine discount.
3. Exchange Offers:
The customer is allowed to exchange the old product for a new one. The old product is exchange value is deducted from the price of the new product. This sales promotion tool is used by several firms to promote durables such as TV sets, refrigerators, motor-bikes, and so on.
4. Installment Sale:
Consumers initially pay smaller amount of the price and the balance amount in monthly installments over a period of time. At present, many consumer durables such as refrigerators, cars, motorbikes, electronic items, etc., are sold on installment basis.
5. Other Forms:
There are several other forms of consumer promotions such as free trials, contests, patronage rewards, in store-demonstrations, etc.
B. Trade-Oriented Promotions:
The trade-oriented promotion tools are directed at channel intermediaries to induce them to stock and promote the sale of products. Some of the important trade-oriented promotion tools are:
1. Cash and Trade Discount:
A firm may offer attractive cash discount to the dealers so that they make payment on time. Apart from cash discount, a firm may provide trade discount to the dealers to induce them to place large orders.
2. Credit Terms:
Special credit terms may be offered to encourage bulk orders from retailers or dealers. However, it is to be noted that longer credit terms may likely to result in higher bad debts. Therefore, firms may provide shorter credit terms with attractive incentives.
3. Cooperative Advertising:
The manufacturer may agree to share the advertising expenses of the dealers. This would induce the dealers to undertake a g0od amount of advertising to promote sales in their areas.
4. Staff Incentives:
Marketers may provide special gifts, or prizes to the staff of the dealers for attaining a particular level of sales target. The marketer may also provide training to the staff of the dealers.
5. Stock Return:
some firms make take back partly or wholly the unsold stock with the retailers, and distribute it to other dealers, where there is a demand for such stock.
C. Sales Force Incentives
1. Performance-Oriented Reward:
sales force may be provided with performance-oriented rewards. For instance, sales persons completing a particular sales target are rewarded with special gifts, and promotions.
The performance-oriented rewards induce the sales staff to perk-up their performance.
2. Suggestion Incentive:
The sales force may also be provided with special rewards for giving valuable suggestions. The suggestions may be in respect of product modifications, or innovative schemes to promote the sales.
Participation in trade fairs and exhibitions is an important element of promotion-mix. In trade fairs and exhibitions, an export firm can display and demonstrate its products and provide information about its products so as create a good impact on the visitors at the fair or exhibition.
The importance of trade fairs and exhibitions is explained as follows:
1. Creating Awareness:
Participation in trade fairs and exhibitions enable the exporters to create awareness of the products in the minds of the customers. The exporter can display and demonstrate the products in trade fairs and exhibitions. Generally, a large number of people visit trade fairs and exhibitions, and they come to know about the displayed products.
2. Developing Attitudes:
Participation in trade fairs and exhibitions enable the exporter to develop positive attitude of the products in the minds of overseas buyers or to correct the negative attitudes. For instance, in Western Europe and North American markets, customers have a negative attitude towards certain Indian goods. Participation in trade fairs provides an opportunity to the exporters to create a favourable impression (positive attitude) in the minds of the customers through creative or innovative behaviour of the exporter's staff at the trade fairs.
3. Demonstration of Product:
Trade fairs and exhibitions provide an excellent opportunity for the exporters to demonstrate the product. Effective demonstration of the product can create a good impact on the potential customers visiting the fair or exhibition. The good impact may lead to higher orders from the overseas customers.
4. Developing Trust of Customers:
Participation in trade fairs and exhibitions provide an opportunity to the exporters to interact with overseas buyers. Effective personal interaction with the overseas buyers may lead to developing a bond with the overseas buyers. Once the trust or bond is developed, the prospects may become buyers and the buyers may become loyal customers.
5. Compiling List of Prospective Customers:
Trade fairs and exhibitions provide an excellent opportunity to the exporters to compile a list of prospective customers. Such list can be useful to provide the overseas prospective customers with information relating to new product launches, new sales promotion schemes, entry in new markets, etc.
6. Brand Image:
Trade fairs and exhibitions can help to develop a good brand image. Brand image is the perception of the brand in the minds of target customers. At the trade fairs, the exporter may provide free samples as well as gifts to the visitors. Therefore, the prospective customers may develop a favourable image of the brand and may place orders.
7. Corporate Image:
Trade fairs and exhibitions enable an exporter to develop the image of the company in the minds of the visitors at the trade fairs. The quality of the set up at the fair, the quality of the staff interacting with the visitors, the treatment given to the visitors, etc., goes a long way in developing good image of the company.
Personal selling refers to face-to-face communication between the forms representative and the prospects. Personal selling is an important element of promotion mix.
Personal selling provides several benefits to the organisation, which are as follows:
1. Identification of Prospective Buyers:
Personal selling enables the exporter to identify prospect buyers The sales force may obtain leads about prospective customer through various sources. After the leads, the sales force mat approach the prospective customers and may convert them int customers by highlighting features, advantages and benefit: (FAB).
2. Persuasion of Customers:
Personal selling helps to persuade the customers to buy company's products. Persuasion can be done by offering various customer-oriented sales promotion techniques such as:
After-sale-service
Banded products.
Coupons or vouchers Discounts
Exchange offers,
Free samples
Gifts, etc.
In personal selling, the salesperson highlights various benefits, uses and features of the product, thereby, persuading the customer to buy the firm's products.
3. Increase in Sales:
Effective communication and good negotiation skills on the part of the sales force helps to induce the target customers to buy the company s products. The increase in purchases by customers leads to higher sales, which in turn brings more profits to the firm.
4. Increase in Market Share:
Personal selling helps to increase not only the sales but also increase in market share. Personal selling may result in more number of customers with increase in orders. The increase in customers with large number and repetitive orders results in increase in market share.
5. Corporate Image:
Personal selling helps to improve corporate image of the firm. The quality of personal interaction between the buyer and the sales person helps to develop corporate image. The services and facilities provided by the sales force also helps to improve corporate image.
6. Competitive Advantage:
Personal selling may generate competitive advantage to the firm. Effective personal selling can create a good brand image and corporate image, which in turn will help the firm to gain competitive advantage in the market. The exporter's firm can easily face the competition in the market on account of committed and dedicated efforts of the personal selling staff.
7. Customer Satisfaction:
Personal selling may lead to customer satisfaction. Customer satisfaction takes place when product performance is equal to customer expectations. Customers may be fully satisfied due to quality of services and facilities provided by the personal selling staff.
8. Customer Loyalty:
Personal selling may lead to customer loyalty. Due to effective salesmanship or personal selling efforts, the customer may become brand loyal, which implies:
Repeat purchases by satisfied customers.
Recommendations by satisfied customers to others.
9. Corrections of Erroneous Impressions:
Personal selling may help to correct erroneous or negative impressions of the product and of the company in the mind of the customers. The personal selling staff may provide factual data about the product and the company to correct the erroneous impression in the mind of the customers.
International advertising Is a communication process that takes place in several countries that differ in terms of communication styles, cultures and consumption patterns. The advertisers in export I markets must consider the following guidelines or essentials to make advertising effective:
1. Target Audience:
The advertiser must consider the nature of target audience in different export markets and accordingly drafts the advertisements.
The advertiser must consider various factors relating to target audience such as demographic, geographic, psychographic, sociographic, and behavioural.
2. Objectives of Advertising:
The advertiser must consider the objective of advertising in overseas markets. Generally, the main objective of advertising is to create top of mind awareness through repetitive and creative advertising. Also, there is need to develop positive.
Apart from the objectives of awareness and attitude, there are attitude towards the product. several other objectives such as creating brand image, developing brand loyalty, education of customers, etc.
3. Media of Advertising:
In some countries, there are restrictions on advertising on certain media. For instance, there are certain restrictions on TV advertising in Germany, France and other countries. In some countries, there are restrictions in terms of number of ads per hour, or timings of adverting. For instance, in some countries there are restrictions such as after 8 p.m.TV ads are not allowed. Also certain channels such as BBC do not allow TV commercials as it is funded by license fee.
4. Language of Advertising:
Translation from one language to another language is crucial in international advertising. The literal translation may fail to convey the desired message across the countries due to cultural factors.
For instance, the English Phrase 'Come Alive' when translated in Chinese language sounds like 'Come out of the Grave'. Therefore, an advertiser must consider language nuances in different countries while drafting the ads.
5. Selection of Brand Ambassadors:
If the export firm wants to select a brand ambassador to promote the it products in overseas markets; it must see to it that the chosen ambassador fits in the global markets. Also, the character or personality of the ambassador must match with the character or personality of the brand.
6. Selection of Ad Agency:
An export firm must select the right ad agency considering various factors such as:
Reputation of the ad agency
Size of the ad agency.
Type of the ad agency.
Clients of the ad agency (avoid competitors' ad agency)
International connections of the ad agency
Fees and other charges of the ad agency, etc.
7. Cultural Considerations:
The culture of a country influences the marketing and advertising campaigns. Customers are quite sensitive about cultural aspects depicted in the advertisements. Advertising themes incorporating family life, respect for elders, harmony with nature, distinct life styles, innovation and novelty, use of celebrities, content of advertising, etc., must reflect the culture of a specific country or region.
8. Education:
The level of literacy plays an important role in deciding the ad content and message to be used in international market. Market segments with lower level of adult literacy need to be addressed by way of more audio visual content rather than a written message. It should be ensured that the visuals convey the desired message rather than the text part of the advertisement.
9. Advertising Code of Conduct:
The regulatory framework of a country influences the advertising in international market. The advertising code of conduct must be strictly followed in various countries.
References
- Export Marketing Imperative by Michael R. Czinkota
- International Marketing and Export Management by Edwin Duerr, Gerald Albaum