Questions 21—25

Many firms fail because when they begin exporting they have not researched the target markets or developed an international marketing plan. To be successful, a firm must clearly define goals, objectives and potential problems. Secondly, it must develop a definitive plan to accomplish its objective, regardless of the problems involved. Unless the firm is fortunate enough to possess a staff with considerable expertise, it may not be able to take this crucial first step without qualified outside guidance.

Often top management is not committed enough to overcome the initial difficulties and financial requirements of exporting. It can often take more time and effort to establish a firm in a foreign market than in the domestic one. Although the early delays and costs involved in exporting may seem difficult to justify when compared to established domestic trade, the exporter should take a more objective view of this process and carefully monitor international marketing efforts through these early difficulties. If a good foundation is laid for export business, the benefits derived should eventually outweigh the investment.

Another problem area is in the selection of the foreign distributor. The complications involved in overseas communications and transportation require international distributors to act with greater independence than their domestic counterparts. Also, since a new exporter’s trademarks and reputation are usually unknown in the foreign market, foreign customers may buy on the strength of the distributing agent’s reputation. A firm should therefore conduct a thorough evaluation of the distributor’s facilities, the personnel handling its account, and the management methods employed.

Another common difficulty for the new exporter is the neglect of the exporter market once the domestic one booms: too many companies only concentrate on exporting when there is a recession. Others may refuse to modify products to meet the regulations or cultural preferences of other countries. Local safety regulations cannot be ignored by exporters. If necessary modifications are not made at the factory, the distributor must make them, usually at a greater cost and probably not as satisfactorily.

If exporters expect distributing agents to actively promote their accounts, they must be trained, and their performance continually monitored. This requires a company marketing executive to be located permanently in the distributor’s geographical region. It is therefore advisable for new exporters to concentrate their efforts in a few geographical areas until there is sufficient business to support a company representative. The distributor should also be treated on an equal basis with domestic counterparts. For example, special discount offers, sales incentive programmes and special credit terms should be available. 

1. In the first paragraph, the writer suggests that firms thinking about exporting should ______.(A) get professional advice(B) study international marketing(C) identify the most profitable markets(D) have different objectives to other exporters

2. The writer believes that if sufficient preparation is undertaken ______. (A) initial difficulties can be easily avoided(B) the costs can be recovered quite quickly(C) management will become more committed(D) the exporter will be successful in the long run

3. According to the passage, an exporter should choose a distributor who ______. (A) has experienced personnel(B) has good communication skills(C) is well-established in the target market(D) is not financially dependent on the import business

4. New exporters often make the mistake of ignoring the export market when ______.(A) distribution costs are too high(B) their product is selling well at home(C) there is a global economic recession(D) distributors cannot make safety modifications

5. For foreign distributors to be successful, the exporters must ______.(A) focus on one particular region(B) finance local advertising campaigns(C) give the same support as they would to domestic agents(D) make sure there are sufficient marketing staff locally

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