■ Overseas sales branch or subsidiary:The sales branch handles sales and distribution
and might handle warehousing and promotion as well. It often serves as a dis-
play and customer service center.
■ Traveling export sales representatives:Home-based sales representatives are sent
abroad to find business.
■ Foreign-based distributors or agents:These distributors and agents might be given
exclusive rights to represent the company in that country or only limited rights.
Whether companies decide to export indirectly or directly, many companies use
exporting as a way to “test the waters” before building a plant and manufacturing a
product overseas. This strategy worked well for IPSCO, Inc. In the early 1980s, this
Saskatchewan-based steel producer exported its steel pipe and flat steel to the United
States from Canada—despite significant transportation costs. Once the company re-
alized there was a significant U.S. demand for its products, it decided to set up shop
there.^14
One of the best ways to initiate or extend export activities is by exhibiting at an
overseas trade show. A U.S. software firm might show its product at an international
software expo in Hong Kong. With the World Wide Web, it may not even be neces-
sary to attend trade shows to show one’s wares to overseas buyers and distributors.
Electronic communication via the Internet is extending the reach of companies, par-
ticularly small ones, to worldwide markets. The Internet has become an effective means
of everything from gaining free exporting information and guidelines, conducting
market research, and offering customers several time zones away a secure process for
ordering and paying for products. See Table 6.3 for five sources of free on-line
exporting help. Then check the Marketing Memo “Making Your Web Site Worldwide
andWorldly Wise” for tips on Web sites that attract, rather than frustrate, overseas
customers.
LICENSING
Licensing is a simple way to become involved in international marketing. The li-
censor licenses a foreign company to use a manufacturing process, trademark,
patent, trade secret, or other item of value for a fee or royalty. The licensor gains
entry at little risk; the licensee gains production expertise or a well-known prod-
uct or brand name. E-Trade Group, the Palo Alto, California, on-line broker-dealer,
has entered into a licensing agreement with Jerusalem Global Ltd., an Israeli
chapter 12
Designing
Global Market
Offerings^375Going On-line for Exporting HelpTABLE 6.3