import-export - ProFile 1 UNIT 5 Import–Export A niche...

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Unformatted text preview: ProFile 1 UNIT 5 Import–Export A niche market is a specialized part of the market which is generally not big enough to capture the interest or the attention of major manufacturers or competitors. Small businesses, and business operating in niche markets, often depend on exports for their expansion because • the domestic market is too small to allow for expansion • the domestic market may be saturated • there is too much competition from other suppliers. SINCE THE INTERNET Thanks to the Internet, niche markets can be much more fully exploited than previously. Instead of physically going abroad to look for new customers, exporters can reach out to potential markets via the Internet. In Britain, thousands of small businesses have benefited from the Internet for new business. Small firms may not be able to offer secure online payment facilities, but will be able to provide order forms which can be printed out. Generally speaking, it is better for manufacturers in niche markets to gather together with similar businesses under an umbrella site. Specialist food makers, for instance, can work together in a virtual mall, and will attract more customers together than they would if they operated entirely independently. Local or more wide-ranging chambers of commerce can be an excellent way of making contacts with other producers and future business partners. The main problem associated with getting business this way is fraud. Using illegally obtained credit card details, orders are sent to fraudsters. Later on, the trader discovers that payment has been refused and that there is no chance of having the goods returned. See the ProFile Student’s site: AGENTS Another way that businesses can export is by appointing an agent to act on their behalf in a particular market. In book publishing, for instance, an agent may represent the lists of a number of different publishers. Organizations like private language schools usually depend on a widespread network of agents in different countries to supply their future clients. An agent will often expect an up-front financial contribution to the production of a brochure and other promotional materials. Quite naturally, they will also expect a generous commission on sales. TR ADE FAIRS Trade fairs can be very expensive to attend. Stands at prestigious book fairs can cost several thousand pounds a day. In addition, there is the physical presence of staff to consider, as well as their transport, accommodation and meals allowance, as well as the budget for the entertainment of clients. PRICING While this does not pose a problem within the euro zone, exporters have to face the dilemma of which currency to choose for giving the price of their goods. As a general rule, exporters should price in their own currency as this is where most of their own costs are incurred. VARIABLE PRICING Exporters may choose to vary their prices according to what they think different markets can bear. In practice, this may involve cutting the price. Before doing this, they should take care about adjacent markets, and be aware of re-imports damaging other, full-price, markets. Photocopiable © Oxford University Press ...
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This note was uploaded on 12/12/2010 for the course RBS BCN taught by Professor Dekoe during the Spring '10 term at Rotterdam Business School.

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