BULE HORA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF MARKETING MANAGEMENT

COURES TITLE: International marketing

Course code:

Prepared by: ESA BEKER…………………………………………………………….3230 /13 ID

SUBMITED TO: MR KENASA

SUBMITION DATE: 1/17/2024

1
Suppose you are the owner of large organization and you decide to entry new foreign market.
Which enter mode you will select? Why? Which country you want to enter? Why? Note:-
consider the reality of Ethiopian and the country you are enter environment.

INTRODUCTION
 First of all let us understand the definition of an entry mode to
international markets. An entry mode describes a company’s approach to
enter a new foreign market that has not been targeted by the company
before.
 The process aims at bringing a product or service to a targeted
international market. It can also initiate the entry of related business
activities, such as technology, human resources, management and other
resources to the new target country.
 It is important to consider that there are several ways of entering an
international market. Compared to a new market entry in your home
country, in case of foreign market entry, the specificities of the targeted
country should be considered when making a decision regarding the
appropriate market entry mode.
The main international market entry modes

 Depending on the company’s requirements, capabilities and constraints, the idea of the
market entry and the favored scope of engagement, risk, control and profit potential,
companies choose from many available market entry modes. All these entry modes
combine different advantages and disadvantages of what companies should be aware of
before making their Choice
How to choose the right entry mode for new international markets?

 In international business, choosing the right entry mode is essential to maximize the success of your
international expansion. How you enter a foreign market is highly dependent on your company’s
capabilities and strategy, as well as on your target market.
 It also depends on the presence of local and international competition, on regulation, on industry specifics
etc. This is why having a deep understanding of your target market is very important to your choice of
entry mode.
 Evaluating international market potential can help you grasp the specificities of foreign markets and even
guide you in the market selection process.

2
  After choosing the markets offering the most opportunities for your company, you will then have to
consider how to enter each of them. There is no one specific mode of entry an organization can adopt to
enter into a new international market.

 KERCHANSHE
KERCHANSHA Trading, another of the top 10 Ethiopian coffee exporters, aims to deliver
only the finest Ethiopian coffee exports to the rest of the world. It is well known for
providing quality coffee to its customers locally and around the world

I. I SELECT THE EXPORT MODE OF ENTERY

Because Exporting is a typically the easiest way to enter an international market, and therefore most
firms begin their international expansion using this model of entry.

Exporting allows me to tap into new markets and more customers, increase sales, capitalize on
growth opportunities

Exporting is the sale of products and services in foreign countries that are sourced from the home
country. The advantage of this mode of entry is that firms avoid the expense of establishing operations
in the new country, so my organization will profitable if enter through export mode of enter in
international market

THER ARE FOUR REASONS WHY EXPORTING SHOULD BE PART OF MY BUSINESS STRATEGY

 Exporting give access to new customers for my company

 Exporting diversifies my revenue stream
 Exporting gives a competitive advantage for my organization
 Exporting gives an opportunity to solve global problems

 Exporting give access to new customers for my company

Exporting allows me to tap into new markets and more customers, increase sales, capitalize on
growth opportunities and reduce my organization dependence on the domestic market.
Exporting also exposes my company to a wider audience and helps me to build trust and
credibility in the eyes of potential buyers. It can also open up opportunities for partnerships and
collaborations with international companies, allowing me to expand my business even further.
By working with foreign partners, I can access new resource technologies and expertise that can
help me improve my products and services. This can lead to even more customers, sales and
long-term business growth for my organization.

3
  Exporting diversifies my revenue stream

Revenue streams can evaporate overnight in a recession, but exporting can give me access to
liquid markets where economic conditions may be more favorable. Diversify my organization
revenue stream and I WILL reduce my organization dependence on the domestic market and
provide a hedge against economic downturns and other risks out of my control. Another
benefit of diversifying my organization revenue stream through exporting is that it can help my
organization tap into new and emerging markets, which can skyrocket my company’s growth
potential. Exporting to a country that is experiencing strong economic growth can help me take
advantage of that growth, meet the demands of the market and increase my organization
revenue.

 Exporting gives a competitive advantage for my organization

As the world becomes more connected and the competition in the domestic market increases,
businesses that don’t export risk being left behind in a rapidly evolving global economy. Less
than 1 percent of U.S. companies are exporters, which means I can gain a competitive
advantage and differentiate my business by offering unique products or services that are not
readily available in foreign markets. Exporting can also help my organization access new
technologies and production methods in target market, which can lead to increased efficiency
and cost savings for my organization.

 Exporting gives me an opportunity to solve global problems

Exporters are uniquely equipped to solve the world’s problems. By leveraging expertise and
resources, exporters can have a positive impact on communities and economies around the
world by sharing new technologies and ideas with people that didn’t have access before.
Exporting is also a great way to contribute to the livelihoods of people in my community and
contribute to the development of foreign markets by providing good-paying jobs and
promoting economic growth. Not all problems can be solved with a job or access to goods, but
it goes a long way in improving the standard of living for people around the world and to
promote mutual respect across cultures.

4
 Firms must, however, have a way to distribute and market their products in the new country, which
they typically do through contractual agreements with a local company or distributor. When exporting,
the firm must give thought to labeling, packaging, and pricing the offering appropriately for the market.

In terms of marketing and promotion, the firm will need to let potential buyers know of its offerings, be
it through advertising, trade shows, or a local sales force

Firms export mostly to countries that are close to their facilities because of the lower transportation
costs and the often greater similarity between geographic neighbors.

The Internet has also made exporting easier. Even small firms can access critical information about
foreign markets, examine a target market, research the competition, and create lists of potential
customers. Even applying for export and import licenses is becoming easier as more governments use
the Internet to facilitate these processes.

Because the cost of exporting is lower than that of the other entry modes, entrepreneurs and small
businesses are most likely to use exporting as a way to get their products into markets around the globe.
Even with exporting, firms still face the challenges of currency exchange rates. While larger firms have
specialists that manage the exchange rates, small businesses rarely have this expertise. One factor that
has helped reduce the number of currencies that firms must deal with

Exporting is the marketing and direct sale of domestically produced goods in another country. Exporting
is a traditional and well-established method of reaching foreign markets. Since it does not require that
the goods be produced in the target country, no investment in foreign production facilities is required.
Most of the costs associated with exporting take the form of marketing expenses.

While relatively low risk, exporting entails substantial costs and limited control. Exporters typically have
little control over the marketing and distribution of their products, face high transportation charges and
possible tariffs, and must pay distributors for a variety of services. What is more, exporting does not give
a company firsthand experience in staking out a competitive position abroad, and it makes it difficult to
customize products and services to local tastes and preferences.

Advantages of exporting for my organization

I will significantly expand my markets, leaving my less dependent on any single one.

Greater production can lead to larger economies of scale and better margins.

I will research and development budget could work harder as I can change existing products to
suit new market

5
 Increasing my sales potential

While importing products can help businesses reduce costs, exporting products can ensure increasing
sales and sales potential in general. Businesses that focus on exporting expand their vision and markets
regionally, internationally or even globally. Instead of earning money by selling their offerings on the
local market, these businesses are focused on discovering new opportunities to present their work
abroad.

Exporting products is especially good for medium and large businesses – the ones that have already
expanded within the local market. Once they have saturated the market in their country, exporting
products abroad can be a great opportunity for these businesses to increase the sales potential.
Additionally, exporting can be one way of scanning opportunities for overseas franchising or even
production.

Increasing profits

Exporting products can largely contribute to increasing your profits. This is mainly due to the foreign
orders, as they are usually larger than those placed by the local buyers. While local customers buy a few
products or a pallet, businesses abroad oftentimes order a container of products which inevitably leads
to increased profits. Moreover, if your products are considered unique or innovative abroad, your
profits can increase rapidly in no time.

Depending on the company’s requirements, capabilities and constraints, the idea of the market entry
and the favored scope of engagement, risk, control and profit potential, companies choose from many
available market entry modes. All these entry modes combine different advantages and disadvantages
of what companies should be aware of before making their choice.

Disadvantages of exporting for my organization

Unless I will careful, my company can lose focus on my home markets and existing customers.

My administration costs may rise as i have to deal with export regulations when trading outside
the ETHIOPIA.

6
I will be managing more remote relationships, sometimes thousands of miles away.

In overseas markets, my organization may lose some of the control that i used to at home.

I will need to think of my organization new market differently to the home market. They will be
different customers with their own reasons for buying my organizatio products.

There are ways to I can manage the risks of exporting.

Tax considerations when exporting

I will have different responsibilities for VAT depending on whether I sell to other Ethiopia
countries or export MY goods outside of the Ethiopia.

If i sell to other countries in the Ethiopia, I must keep records and submit details of these sales
on my organization VAT return. If will have a high level of sales to Ethiopia countries, I must
complete an Intarsat at Supplementary declaration. Read an introduction to Intrastat.

If I will sell to countries outside the Ethiopia, i must keep documents that count as proof of
export. These must identify:

 the exporter
 the customer
 the goods and their value
 the export destination
 the mode of transport and the route.

II MY ORGANIZATION profit from exporting coffee to the United States in several ways.
Firstly, the U.S. is a large consumer of coffee, and there is a strong demand for high-quality,
specialty coffee beans. Ethiopian coffee is known for its unique and distinct flavors, which
can command higher prices in the U.S. market. By exporting to the U.S., Ethiopian coffee
producers can benefit from selling their beans at premium prices.

7
Additionally, my organization can also benefit from trade agreements and preferential tariffs
that may be in place between the U.S. and my organization. If there are trade agreements that
reduce or eliminate tariffs on Ethiopian coffee imports, this can make the coffee more
competitive in the U.S. market and ultimately lead to higher profits for my organization from
coffee exporters.

Furthermore, by building strong relationships with U.S. importers and distributors, my

organization coffee producers can access a larger market and potentially negotiate better prices
for their products. This can further contribute to the profitability of my organization export