THESTAGESOFGOINGINTERNATIONAL 131Firmstypicallyapproachinvolvementininternationalmarketingrathercautiously,
andthereappearstoexistanunderlyinglifecyclethathasa seriesofcriticalsuccessfac-
torsthatchangeasa firmmovesthrougheachstage.Forsmall-andmedium-sizedfirms
inparticular,exportingremainsthemostpromisingalternativetoa full-bloodedinterna-
tionalmarketingeffort,sinceit appearstooffera degreeofcontroloverrisk,cost,andresource
commitment.Indeed, exporting, especiallybythesmallerfmns,isofteninitiatedasa response
toanunsolicitedoverseasorder-theseareoftenperceivedtobelessrisky.
Exporting
Ingeneral,exportingis a simpleandlowrisk-approachtoenteringforeignmarkets.Firms
maychoosetoexportproductsforseveralreasons.First,productsinthematuritystageof
theirdomesticlifecyclemayfindnewgrowthopportunitiesoverseas,asPerrierchoseto
dointheU.S.Second,somefirmsfindit lessriskyandmoreprofitabletoexpandbyexport-
ingcurrentproductsinsteadofdevelopingnewproducts.Third,firmswhofaceseasonal
domesticdemandmaychoosetoselltheirproductstoforeignmarketswhenthose prod-
uctsare"inseason"there.Finally,somefirmsmayelecttoexportproductsbecausethere
islesscompetitionoverseas.
Afirmcanexportitsproductsinoneofthreeways:inctirectexporting,semi-direct
expOlting,anddirectexporting.Indirectexportingisa commonpracticeamongfirmsthat
arejustbeginningtheirexporting. Sales,whetherforeignordomestic,aretreatedasdomes-
ticsales.Allsalesaremadethroughthefirm'sdomesticsalesdepartment,asthereisno
exportdepartment.indirectexportinginvolvesverylittleinvestment,asnooverseassales
forceorothertypesofcontactsneedbedeveloped.Indirectexportingalsoinvolveslittle
risk,asinternationalmarketingintermediarieshaveknowledgeofmarketsandwillme.lee
fewermistakesthansellers.
Insemi-directexporting,anAmericanexporterusuallyinitiatesthecontactthrough
agents,merchantmiddlemen,orothermanufacturersintheU.S.Suchsemidirectexport-
ingcanbehandledina varietyofways:(1)acombinationexportmanager,a domesticagent
intermediarythatactsasanexportingdepartmentforseveralnoncompetingfirms;(2)the
manufacturer'sexportagent(MEA)operatesverymuchlikea manufacturer'sagentindomes-
ticmarketingsettings; (3)aWebb-PomereneExportAssociationmaychoosetolimitcoop-
erationtoadvertising,orit mayhandletheexportingoftheproductsoftheassociation's
membersand;(4)piggybackexporting,inwhichonemanufacturer(carrier)thathasexport
facilitiesandoverseaschannelsofdistributionhandlestheexportingofanotherfmn's(rider)
noncompetingbutcomplementaryp~oducts.
Whendirectexportingisthemeansofentryintoa foreignmarket,themanufacturerestab-
lishesanexportdepartmenttoselldirectlytoa foreignfilm.Theexportingmanufacturercon-
ductsmarketresearch,establishesphysical distribution,and obtainsall necessaryexport
documentation.Directexportingrequires(lgreaterinvestmentandalsocarriesa greaterrisk.
However,it alsoprovidesgreaterpotentialreturnandgreatercontrolofitsmarketingprogram.
Licensing
Underalicensingagreement, a finn(licensor)providessometechnologytoa foreignfinn
(licensee)bygrantingthatfirmtherighttousethelicensor'smanufacturingprocess,brand
name,patents, orsalesknowledgeinreturnforsomepayment.Thelicenseeobtainsa com-
petitiveadvantageinthisarrangement,whilethelicensorobtainsinexpensiveaccesstoa
foreignmarket.