There are several considerations you’ll need to take into account when choosing one of the following four market entry modes for your company:
- Indirect exporting – In this entry mode, exporting is conducted through domestically-based export intermediaries. Your company would have no control over your products and/or services in the foreign market.
- Direct exporting – This entry mode involves no intermediaries and works best if your company’s product volume is small.
- Foreign direct investment (FDI) – In this entry mode, a company based in one country would make an investment in a company or entity based in another country.
- Licensing– In this entry mode, a licensor in a foreign market would use your property (i.e. trademark, patent, production techniques) through an international licensing agreement.
To learn more about modes of entry to new markets, please refer to Export.gov’s “The Basic Guide to Exporting.”
How do I determine buyers and sellers?
There are several programs available to help identify buyers and sellers. The U.S. Department of Commerce is an excellent partner that can assist you with identifying potential leads, and each year it certifies more than 100 events in more than 23 countries in a variety of industry sectors.10 Other organizations programs that can help you connect with buyers and sellers include:
- Business Information Database System (BIDS)
- The Business Information Database System (BIDS) is a portal built to help U.S. businesses learn about significant international commercial opportunities. It also connects U.S. businesses to detailed information and to U.S. embassies overseas.11 Your company can use BIDS to locate new opportunities and connect with U.S. government officials in the field and to contact U.S. embassies overseas.
- Featured U.S. Exporters Service (FUSE)
- The U.S. Commercial Service’s Featured U.S. Exporter Service (FUSE) provides U.S. companies with a high volume, local-language promotion channel in over 60 markets worldwide and in over 15 different languages.12 Through FUSE, you can reach international prospects in their local language and drive qualified leads in your target markets.
- Foreign Agricultural Service
- The Foreign Agricultural Service (FAS) links U.S. agriculture to the world to enhance export opportunities and global food security.13 The FAS provides data on U.S. agricultural exports and offers databases, forecasts and programs to support new market development and export financing.
- Gold Key Matching Service
- The U.S. Commercial Service’s Gold Key Matching Services can help you find potential overseas agents, distributors, sales representatives and business partners, and offers customized market and industry briefings with trade specialists and timely and relevant market research. The Service also provides companies with post-meeting debriefings with trade specialists, assists in developing appropriate follow-up strategies, and helps with travel, accommodations, interpreter services and clerical support.14
- Trade Fair Certification Program
- The U.S. Commercial Service’s Trade Fair Certification program is a cooperative arrangement between private sector trade show organizers and the U.S. government to increase U.S. exports and expand U.S. participation in overseas trade shows.17 The program helps to facilitate U.S. pavilions at selected foreign trade shows, providing high-quality, multi-faceted opportunities for American companies to successfully market overseas. 18
- U.S. Agency for International Development
- The U.S. Agency for International Development (USAID) works to create markets and trade partners for the U.S., and foster good will abroad.19 The USAID works to expand opportunities for U.S. small businesses by supporting small business participation in USAID procurements20 and by offering subcontracting opportunities for small businesses in USAID contracts.21
- U.S. Trade and Development Agency (USTDA)
- The U.S. Trade and Development Agency (USTDA) links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse trade missions.22 USTDA offers opportunities for U.S. companies to expand their reach into global markets and helps to position new exporters to compete for lucrative contracts. USTDA’s events also help U.S. exporters save time and money by gathering all key officials associated with current projects in particular sectors and countries at one time. 23
How do I determine appropriate pricing for my products/services?
- To determine appropriate pricing for your products and/or services in international markets, you should first consider the following:
- What type of market positioning (i.e. customer perception) do you want to convey through your pricing structure?
- How might your product and/or service’s price reflect its quality?
- How are your competitors’ products priced?
- Should the price of your product and/or service differ by market segment?
- What pricing options are available if your costs increase or decrease?
- Is the demand in the foreign market flexible or inflexible?
- When finalizing your product’s and/or service’s price, remember the following key steps:
- Calculate the actual cost of your export product and/or service
- Calculate the final consumer price of the product and/or service
- Assess market demand and competition
- Consider modifying your product and/or service to reduce the export price
- Include “nonmarket” costs such as tariffs and customs fees
- Omit cost elements that do not benefit your export function, such as domestic advertising 19
10“Chapter 6: Finding Qualified Buyers,”
A Basic Guide to Exporting, July 26, 2016, http://www.export.gov/basicguide
. 11“What is BIDS?”
United States Department of State Business Information Database System, July 26, 2016, http://bids.state.gov/
. 12“Featured U.S. Exporters,”
Export.gov, July 26, 2016, http://export.gov/fuse/fuseinformation037538.asp
. 13“About FAS,”
USDA Foreign Agricultural Service, July 26, 2016, http://www.fas.usda.gov/about-fas
. 14“The Gold Key Matching Service,”
Export.gov, July 26, 2016, https://www.export.gov/Gold-Key-Service
. 15“The International Buyer Program,”
Export.gov, July 26, 2016, http://2016.export.gov/ibp/
. 16“What is the International Buyer Program (IBP)? And is there a fee to participate?”
Export.gov, November 18, 2016 https://www.export.gov/article?id=Is-there-any-fee-to-apply-to-the-International-Buyer-Program-IBP
. 17“Trade Fair Certification,”
Export.gov, July 26, 2016, http://2016.export.gov/ibp/eg_webcontent_022146.asp
. 18“Trade Fair Cert. Program,”
Export.gov, October 20, 2016, https://www.export.gov/article?id=Trade-Fair-Certification-Program
. 19“Who We Are,”
USAID, July 26, 2016, https://www.usaid.gov/who-we-are
. 20“Small Business,”
USAID, July 26, 2016, https://www.usaid.gov/work-usaid/partnership-opportunities-refresh/small-business
. 21“Subcontracting Program,”
USAID, July 26, 2016, https://www.usaid.gov/business/small_business/subcontracting-program
. 22“Our Mission,”
USTDA, July 26, 2016, https://www.ustda.gov/about/mission
. 23“For U.S. Companies,”
USTDA, July 26, 2016, https://www.ustda.gov/program/us-companies