Advantages and Disadvantages of Exporting Processes and International Marketing Methods

V
INTERNATIONAL MARLETING (PART 2)
Advantages and disadvantages of the different types of exporting processes for exporting
merchandising and services.
 Direct Exporting is the process in which sales of products without involving anybody
in between like middlemen. In this case direct exporting a company itself involves
selling of goods to overseas and is also responsible directly dealing with the foreign
organisation. A company like HSBC carry on the exporting directly by these modes:
◦ Sales branches through overseas.
◦ This is abroad based retailer, agents and distributors.
◦ Establishing HSBC’s own corporate export provision.
Advantages-
 Increase Profit- This helps firm to reduce business costs, resulting in potential for
increasing profit. During the export process there is no intermediary to take
commission.
 Increase Control- This help company HSBC to increase control more over the brand
image and also allow to forge deals and relationships with aims aligned with the
foreign businesses. The distribution and product in market can also be controlled.
Disadvantages-
 Increased Workload- The logistical planning is very complex and time-consuming.
The exporting process will lead to unnecessary costs for the company, it also
increases demand for more resources, finance and time on the company exportation
process. Cutting down intermediary means taking responsibility for their work.
 Increased Costs- Increased workload is directly linked with logistics of export
company and also the foreign research will more staff (Padmanabhan, 2022). This can
result in increased salaries, costs and more paid packages of employees. This directly
represent the increase financial risk for direct exporters.
In-Direct Exporting is the process in which company sales goods in foreign country
through middlemen. This involves using the sales intermediaries and independent
middle men that takes the responsibility of products which is send to foreign countries.
Some indirect exporting intermediaries are:
 Purchasing and buying of agents.
 Domestic based export trade and exports merchants’ companies.
Advantages-
 Less Risk- Indirect exporters has less risks and less risk of marketing as it gets
transferred to export market intermediaries and these intermediaries as special
skills in their filed.
 Less Investments- Indirect exporters mostly concentrate on assembling of
goods, manufacturing of products and they also require the less amount of
capital than direct exporters.
Disadvantages-
 Lower Prices- There is many intermediaries in case of indirect exports. So, in
various intermediaries there is distribution of total revenues and the high
prices is charges to exporter.
 Lower Sales Volume- The products are arranging in export houses from
various places and then there is contribution of individual exporters to merge.