Question

A group of students Their plan is to sell an existing product in another country. They have no experience in international business. They decide to target a small, poor, country. Their product targets poor farmers so they have to cover a geographically disperse market in which there are no hugely profitable customers. Their product is not really superior to existing products, just a bit cheaper. They hope for small, steady, growing sales but do not expect to get rich off this product. The product does not need service and is not part of a system. There is nothing to protect with patents. There are no legal requirements that favor one entry mode over another. What entry mode would you advise this firm? please explain your answer

Answer 1

Considering the background of the business, product specification and various elements I believe it is great to use Direct Exporting as a method of direct selling in the market.

• It is an existing product and the group of students don't possess any form of experience or understanding of the International business.
• The target segment involves small, poor and underdeveloped economies and even the farmer market is geographically quite dispersed.
• Under the direct exporting method the group of students can establish a sales program and approach the local agents & distributors to represent and help them sell the products int the local market.
• This can help them to use people who have more understanding and considering the target market is farmers they will trust the local citizens & distributors more.
• The students are looking at a small and progressive growth, the product requires no servicing or legal requirement and hence the local vendors can add more value & reduce the overall cost of international expansions.
• The incentive system for agents can help to increase growth slowly.
• These agents will become the face of the company and hence if selected in the right manner can help to penetrate into the market successfully.

Licensing, franchising, partnership, JV, turnkey project, greenfields investment and other forms require a huge investment and also depend on a lot of international marketing experience and credibility.

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