Export Entry Modes

Export Entry Modes in International Trade

Meaning of Export Entry Modes, according to the Dictionary of International Trade (Global Negotiator): In establishing export channels a company has to decide which functions will be the responsibility of external agents and which will be handled by the company itself. While export channels may take different forms, three major types may be identified: indirect, direct and cooperative export marketing group:

Indirect export: this is when the manufacturing company does not take direct care of the exporting activities. Instead another domestic company, such as an export agent or trading company, perform these activities, often without the manufacturing firm's involvement in the foreign sales of its products.

Direct export: This usually occurs when the producing firm takes care of exporting activities and is in direct contract with the clients in the foreign target market. The firm is typically involved in handling documentation, physical delivery and pricing policies, with the products being sold to final clients.

Cooperative export. This involves collaborative agreements with other firms (export marketing groups) concerning the performance of exporting functions.