Comprehension and Discussion Questions. 1. What is the first step in testing the market-finding out?
1. What is the first step in testing the market-finding out?
2. What is the best way to promote your product?
3. What are the concrete ways of finding the overseas market for your particular product?
4. Can any organizations or banks give you a positive advice on export market opportunities?
5. What final arrangements should you make for the successful market-finding results?
Practical Task:
Read through the text and find sentences with the Passive Infinitive forms and Gerunds write them out and translate the sentences into Russian.
Text II. Factors to be Considered Before Deciding to Export
Once it has been determined that there are opportunities for profitable sales in overseas markets, the next step is to take an overall view of how a decision to move into the export market will directly affect your company’s existing domestic commitments and future plans. You will find that you now need to look at the practical implementation of the information your research has uncovered in order to develop a proper export strategy.
This is vitally important if you are to become an effective international trader, even if your initial intention is to develop business only in neighbouring EEC markets. Too many companies drift into exporting and then find themselves in difficulties, particularly in the areas of meeting different specifications and delivery dates and financing their overseas customers’ credit.
The global market for suitable products and services is obviously much larger than the UK market. Therefore companies successful in exporting often find that their overseas trade becomes the dominant part of their business, and when this happens everyone in the company is affected. They then need to think in terms of the worldwide market, the different requirements of each separate area of that market and the effect exporting will have on the part of the business they control.
How will existing resources be affected?
As a director or owner of a small business your main concern will be the need to manage the finances of your company efficiently and profitably. If your company is “market-led”, then market strategy should be given at least the same importance as financial strategy in boardroom discussions. The impact of an export marketing strategy on every function in your business must also be considered.
Part of your responsibility must be to examine the resources which are available and necessary to support export sales and estimate their effect on cashflow and working capital. It may be necessary to make a financial investment in order to develop and establish overseas sales. For example, initial visits to overseas markets, participation in international trade fairs and exhibitions, and the preparation of literature and so on for each will require an “up-front” financial commitment. You will control the granting of credit, decide on payment terms and the management of credit insurance. If you intend to sell on open account in local currency, on a delivered basis – for example in France – then responsibility for determining the credit status of potential customers also has to be determined.
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You will have to arrange meeting with the international division of your company’s bank, and agree on the handling of currency exchange problems and possible credit insurance. If cashflow is likely to be a problem in the initial stages of market development, then an increased loan may also be required. The possibility of discounting bills, factoring of debts and forfeiting should all be considered. The advantage of factoring is that the factoring company will be responsible for collecting payments from customers. It will also guarantee payment in sterling less an agreed percentage of the fee.
If you are exporting capital goods, then forfeiting should be considered. By this method the total amount owed by your customer is sold to the forfeitor for a discount. As an exporter you are paid immediately and the forfeitor collects the money owed from your buyers.
Payment by Irrevocable and Confirmed (by reputable international bank) Letters of Credit or by avalised (guaranteed by customer’s bank) Bills of Exchange are other ways to make reasonably sure of receiving payment when it falls due. Both documents can be discounted for cash after acceptance by the bank if they are for payment after a credit period. It is essential that you familiarize yourself with all the financial aspects of exporting so that you can take these factors into consideration when planning marketing strategy.
All aspects of your company’s business will be affected by the decision to enter the export market. An evaluation of all the company’s resources is essential to determine whether or not it has the capability to enter the export market. The first need is either to develop in-house expertise to handle export marketing and documentation, or to employ an export specialist to assist in both these crucial areas. If the knowledge and skills are already available amongst existing staff, then you are very fortunate. It is also useful to identify any foreign language skills, both written and verbal, possessed by your staff since such skills are likely to be required as business develops.
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Vocabulary notes
to determine –определить
overseas markets –заморские, внешние рынки
profitable sales –доходные продажи
to affect –влиять
commitments –обязательства
vitally important –жизненно важно
to drift –плыть по течению
suitable –подходящий, нужный
requirements –требования
market-led –ориентированная на рынок
boardroom –комната совета, совещания
responsibility –ответственность
available –имеющийся в наличии
to support –поддерживать
to estimate –оценивать
advantage –преимущество
factoring –посредничество
forfeiting –наложение штрафа, конфискация
irrevocable Letter of Credit –безотзывный аккредитив
reputable –уважаемый, надёжный
confirmed –подтверждённый
essential –существенный
evaluation –оценка
capability –способность
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