Mode of entry can be defined as a procedural technique by which individuals or firms make their economic commodities available to customers in the international market. There are various ways of exploring potential marketplaces, and each method has its advantages and disadvantages. Companies and enterprises usually approach non-domestic markets after identifying their mode of access. They also analyze trade opportunities and internal capabilities to determine which best strategies should be considered first (World Trade Organization, 2013). Mostly, firms start with a lower-risk strategy as they improve to other methods, and after proving a success, they consider the addition of investment and risk. As a business person outsourcing tea as an agricultural product, I opt for exporting as a way of exploring new markets.
Exporting is a mode of entry that involves marketing as well as the direct sale of locally manufactured merchandise in another nation. Therefore, I should have a new way to distribute and market my farm products in the new territory because the method does not involve establishing operations in a foreign country (Watson et al., 2018). I will do this by making contract agreements with a distributor or a local company. Additionally, I must consider labeling, packaging, and evaluating the appropriate cost for the market. I will also focus on marketing and promotions to let my potential buyers know my discounts, be it through advertising, trade shows, or the local sales team. Almost all the money required for the process takes the form of marketing expenses hence no investment in the foreign country.
In conclusion, I chose to export as a method of entry because my firm is still developing, and its a low cost of shipping and lower risk compared to other entries. In addition, the Internet has made exporting easier for me. With my small firm, I can easily access important information about non-domestic markets, like inspecting the target market, studying the competition, and finally, creating a list of prospective buyers. Applying for export and import license is also enabled by many governments to be processed online.
References
Watson, G., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. (2018). International market entry strategies: Relational, digital, and hybrid approaches.Journal of International Marketing, 26(1), 30-60.
World Trade Organization. (2013). From new technologies to trade opportunities[Video].