Export Management Companies: An export management company (EMC) is a specialist in international marketing that acts as the export department for several manufacturers in non-competitive lines. EMCs vary greatly in size. product/market specialization, services, and experience. The representative EMC is small (one or two individuals in management and sales), relies on foreign agents or distributors rather than on its won foreign sales offices, takes title to its client’s products specializes in certain geographic areas.

Indirect exporting gives the manufacturer immediate access to foreign markets though the marketing network of EMCs and other export intermediaries. But the other side of the coin is a manufacturer’s lack of control over its foreign sales. A manufacturer who wants to exploit foreign markets aggressively will move on to direct exporting after gaining his initial exposure through indirect exporting.

Direct exporting offers the manufacturer the following specific advantages:

a)    greater control over the foreign-marketing plan (pricing, adverting, personal selling distribution, product services, etc.)

b)    greater concentration of marketing effort on the manufacturer’s own product ling

c)    quicker information feedbacks on markets, competition and performances, and

d)    better protection of the manufacturer’s trademarked, patents, goodwill, and other intangible for exporting and commits the resource necessary for an active penetration of reign markets. The higher start-up cost and risk of direct exporting compared to indirect exporting can only be justified by greater marketing effectiveness.

The most common channel in direct exporting are those using foreign agents or distributors and foreign branches or subsidiaries.

A foreign agent is an independent middleman who represents the manufacturer in the target market. As an agent, this middleman does not take title to the manufacturer’s product but rather sells that product on a commission basis. Furthermore, an agreement seldom holds inventory beyond samples or extends credit to customers. Usually the manufacturer receives order from his agents and then shifts directly to the foreign buyer.

In contrast, a foreign distributor is a merchant who buys the manufacturer’s product for resales to other middlemen or to the final buyers. The distributors perform more function than the agents (such as maintain inventories, extending credit, servicing orders and providing after sales services), and he also assumes the ownership risk. His compensation is his profit margin on resale of the manufacturer’s product.

Choosing a foreign agent or distributor. Finding good agents or distributors is a recurring problems fore export managers. It is recommended that they begin the recruitment processes by drawing up an agent (distributors) profile that lists all the desirable features of an agent (distributors) in a particular foreign target market.

Manufacturer is well advised to market the final selection of a foreign agent or distributor only after personal interviews with the best prospects. Interviews are the most reliable way for manufactories to gain a feel for a particular agent (distributor) and his organization. But interviews should come only after desk research has identified the best candidates. The time and expenses needed for a careful selection of an agent or distributor is justified by the critical importance of this decision.

A final point on export entry. The manufacturer’s agreement with his foreign representative should be a written contract that clearly sets forth the rights and obligations of both parties. Provision relating to sole and exclusive rights, competitive lines, the resolution f disputes and contract termination are of particular importance.

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