Exporting is the most traditional and well established form of operating in foreign markets. Exporting can be defined as the marketing of goods produced in one country into another.
Whilst no direct manufacturing is required in an overseas country, significant investments in marketing are required. The tendency may be not to obtain as much detailed marketing information as compared to manufacturing in marketing country; however, this does not negate the need for a detailed marketing strategy. • Include all transactions and other costs involved in countertrade in the nominal value specified for the goods being sold • Avoid the possibility of error of exploitation by first gaining a thorough understanding of the customer’s buying systems, regulations and politics, • Ensure that any compensation goods received as payment are not subject to import controls.Despite these problems countertrade is likely “to grow as a major indirect entry method, especially in developing countries. Foreign production Besides exporting, other market entry strategies include licensing, joint ventures, contract manufacture, ownership and participation in export processing zones or free trade zones.
Licensing: Licensing is defined as “the method of foreign operation whereby a firm in one country agrees to permit a company in another country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor”.