investment banking operation. E-Trade’s agreement with the Israeli firm is part of
a strategy to form licensing agreements and international joint ventures in an ef-
fort to bring its brand of no-frills investing to people abroad. E-Trade has already
created E-Trade Australia and has announced plans to form E-Trade Germany and
E-Trade Central Europe.^15
Licensing has some potential disadvantages. The licensor has less control over the
licensee than if it had set up its own production and sales facilities. Furthermore, if
the licensee is very successful, the firm has given up profits; and if and when the con-
tract ends, the company might find that it has created a competitor. To avoid this,
the licensor usually supplies some proprietary ingredients or components needed in
the product (as Coca-Cola does). But the best strategy is for the licensor to lead in in-
novation so that the licensee will continue to depend on the licensor.
There are several variations on a licensing arrangement. Companies such as Hy-
att and Marriot sell management contractsto owners of foreign hotels to manage these
businesses for a fee. The management firm may even be given the option to purchase
some share in the managed company within a stated period.
Another variation is contract manufacturing, in which the firm hires local manu-
facturers to produce the product. When Sears opened department stores in Mexico
and Spain, it found qualified local manufacturers to produce many of its products.
Contract manufacturing has the drawback of giving the company less control over
the manufacturing process and the loss of potential profits on manufacturing. How-part three
Developing
Marketing(^376) Strategies
Making Your Web
SiteWorldwideand
Worldly Wise
Many companies that would never dream
of launching an exporting initiative without
careful planning are launching Web sites
that are actually damaging their image with
global customers. It may be something as
seemingly innocuous as using address fields
that don’t allow for European postal codes
or as major as not providing translation for
a site you are aiming at Japanese customers.
Here, then, is a list of do’s and don’ts for cre-
ating an export-friendly Web site:
■ Be sure international customers can
view your Web page at adequate
speeds:In some countries, Internet ac-
cess is still limited to 9,600 bps. It may
help to have your Web site hosted or
mirrored overseas. The closer your data
is to your customers, the better able
you are to ensure fast, reliable trans-
mission. You should also consider set-
ting up a text-only version. Rather
than forcing overseas customers to
wait for bandwidth-hogging graphics
to download, design a parallel path of
text-based information.
■ Make sure every customer in markets
you are approaching can experience
your Web site and order products in the
language, custom, and culture with
which he or she feels comfortable:Be-
cause every country is assigned a
unique URL address, you can set up
e-commerce software to autodetect
an international customer the moment
he or she logs on. Then you can auto-
matically set up a dedicated country
page, written in the language of that
country. It’s also possible to link your
Web site to a currency conversion cal-
culator and recalculate prices every
day, every hour, or even with every
transaction in the home currency
of the visitor. Finally, for apparel
(continued)
MARKETING
memo