Companies contemplating entering overseas markets will need to develop specialist knowledge and expertise in these areas. Some sales managers feel that selling abroad is impossibly difficult, but most who try it see that, although it is ‘different’, it is no more demanding than selling in the home market.
Success depends largely on the attitude and approach of the firm and the personal qualities of the salespeople – not every salesperson is suited to such a task from the point of view of understanding and empathy with the foreign market concerned. While it is hoped that this text will contribute to the development of the personal qualities necessary for successful salesmanship, the chapter concentrates specifically on those aspects of international selling with which a firm either exporting or contemplating it should be familiar.
One study found evidence to support the hypothesis that there are four identifiable stages in a firm’s internationalization. The four stages are:
- Non exporters,
- Export intenders,
- Exporters, and
- Regular exporters.
- Concept of balance of payment.
- International trade.
- General Agreement on Tariffs and Trade (GATT).
The fact that national economic prosperity depends on selling overseas is not without relevance to individual companies. There are, however, a number of more pressing reasons why companies benefit from selling overseas:
- Trade due to non-availability of a particular product:
- Trade due to international differences in competitive costs:
- Trade due to product differentiation
We have looked at three broad reasons why individual firms become involved in selling overseas, but there are other more situation specific reasons:
(a) To become less vulnerable to the effects of economic recession, particularly in the home market, and to counter market fluctuations.
(b) Loss of domestic market share due to increased competition.
(c) To take advantage of faster rates of growth in demand in other markets.
(d) To dispose of surplus or to take up excess capacity in production.
(e) Loss of domestic market share due to product obsolescence.
(f) To achieve the benefits of long production runs and to gain economies of scale
(g) The firm has special expertise or knowledge of producing a product that is not available in a foreign market.
(h) Simply the existence of potential demand backed purchasing power, which is probably the strongest incentive of all.
Organisation to implement international sales operations can be complex. Decisions must be made on arranging the interface between manufacturing and sales and in delegating responsibility for international operations. Each problem can have alternative solutions and an optimal decision must be tailored for each firm.
Some companies are so deeply involved in international trade that it forms the majority of sales turnover, while others are simply content to supply export orders. A distinction is made between multinational marketing, international marketing and exporting and each is now considered:
Relates to companies whose business interests, manufacturing plants and offices are spread throughout the world. Although their strategic headquarters might be in an original country, multinationals operate independently at national levels. Multinationals produce and market goods within the countries they have chosen to develop. Examples of multinationals are Shell, Ford, Coca-Cola, Microsoft and McDonald’s. To be successful multinationals need to understand their competences and weaknesses. The Microsoft case history examines this company’s bright and dark side.
International marketing covers companies that have made a strategic decision to enter foreign markets, have made appropriate organizational changes and marketing mix adaptations.
Exporting is at the simple end of the scale and the term is applied to companies that regard exporting as a peripheral activity, whose turnover from exporting is less than 20 per cent.