An executive is undecided whether to rely on in-house or external export specialists/intermediaries in the home country. He is leaning towards direct representation in a market. What are the benefits of going forth with direct representation?

Question

What will be an ideal response?

Answer 1

It is a common problem faced by many executives planning on exporting goods and services to foreign countries. There are two specific advantages to direct representation in a market. It allows decisions concerning program development, resource allocation, or price changes to be implemented unilaterally. Thus, control and communication aspects are major benefits. This is very significant when a product is not yet established in a market. It will require special marketing efforts for which direct efforts will be necessary rather than relying on intermediaries. Also, the marketer's investment ensures special efforts that are undertaken to achieve sales. With indirect or independent representation, such efforts and investment may not be that effective due to lack of incentives. It is also advantageous to get feedback and firsthand information related to the market. This information can greatly improve export marketing decisions concerning product, price, communications, and distribution. In essence, all operational parameters are under control. However, it should be noted that direct representation will depend on the size of the market. It may not be possible to have it when market size is small.