Role of distributors & agents in exporting business

As a manufacturer or exporter who is willing to step into some foreign market, you should better be starting in a safe and calculated manner. One relatively safe and secure method is to start with indirect exports and see the response. There are many ways to start indirect exports, but the most widely used method is to hire the services of commission agents or get into a contract with some distributor. Although, their roles may sound a bit similar, both of them differ at some points. Let’s look into the role of these two in detail.

Agents:
Also known as commission agents, they are responsible for selling your products in foreign market. They are experienced campaigners and quite familiar with the market you are going to target. They know the customers and their needs. However, the thing to remember is that they are solely responsible for selling your products. They do not buy from you directly; neither do they involve themselves in delivery or after sale services in most cases. Their source of earning is the fixed commission on every sale (or gross sales, they will make for you).

Commission agents must be able to meet following requirements before you hire their services.

• Should be having loads of experience
• Check to see if the agent also deals in some of your competitive products
• Past record of sales and the stats for business they have provided to other exporters in the past
• How much of the market that agent can cover on his/her own and to what extent
• Do they sell to end users or businesses?

Distributors:
Unlike commission agents, distributors normally purchase the product from you (at low rates) and then sell it in the market, all the time maintaining some inventory with them. Given, they also provide after sale services, they are more suited if your product needs some installation work or requires after sale services.

• Distributors should be financially stable
• They must be good in inventory stocking and warehouse management
• Should be having technical information about the product (train them if needed)
• Should be ready to work at price margins you are willing to offer
• Be careful when going into a contract and think over the clauses many times before signing
• Distributor should be capable of running or managing the advertising campaign if needed

Now, whether you should go for agents or distributors? The answer to this question will depend on your product and preferences.

Risks and challenges involved in international business

International businesses have to face risks and challenges at many fronts. Some are similar to the risks and challenges a domestic business confronts and some are unique. Even the challenges that are similar by definition differ in nature. For example both types of businesses have to face financial challenges, but an international business will be facing many factors related to global financial markets that don’t affect domestic businesses as much. They are more of a challenge in nature than risks and most of them can be handled through proper planning. Keep reading to understand these challenges better.

The challenge of international planning & strategy:
The first challenge for an international enterprise is to make a global strategy and then implement it. The managers and those at decision-making positions often find it difficult to change their thought pattern, which is not used to work in global paradigm. There are many international businesses but just some of them have truly adopted a proper global strategy. Though the situation is improving with more and more trained graduates and professionals taking on the management roles. Nevertheless, international business management requires extra ordinary management, foreseeing and leadership skills.

Financial and economic challenges:
It starts from arranging the funds to start international business and includes everything such as fluctuation in exchange rate, global economic crisis (or some economic crises in the host country), shift in oil prices, global inflation or tariff barriers imposed by the host government, also the export related policies of your own government.

International Politics:
Political know-how is a must for everybody but it becomes all so important when operating at international level. If some policies were suitable for your business, a change in ruling party can bring drastic changes in those policies. Political chaos will bring down the economy and with that your business. To prevent your business from such negative impacts, you need to make sound political judgments.

Environment, natural disasters and warfare:
Many multinational businesses have to face serious opposition by some environment friendly organizations. Citizens are more concerned about air and water pollution these days as it is becoming a serious threat to their health. Some natural disaster like floods and earthquake, or some kind of civil war breaking out in the host country is also in the list of possible challenges. A new challenge that an international business has to bear now days in some specific countries is the threat of terrorism.

Marketing environment and the factors involved

Marketing environment is made up of all the factors and forces that influence marketing. These forces can be internal like departments (other than marketing such as finance department and human resource department) or external like competitors, suppliers, economic or political situation. To understand them better, marketing personals divide them in two categories namely macro environment and micro-environment. Let’s have a look at some of the important factors involved in marketing environment.
Internal factors:
All the departments involved in business management affects the process of marketing as well, for example the finance or research department in large enterprises. Marketing department is bound to keep their expenses under the budget set by the finance managers or to consider recommendations from the research department. Similarly the supplies and collections can have an impact on marketing as well.

Customer markets:
Different types of customers markets include consumer markets (B2C), business markets (B2B), government markets (B2G), also a new type of customer market has emerged as a result of globalization i.e. international market. Where most other departments will treat these markets similarly, marketing team has to treat them all in different manner. Though most advertising campaigns are targeted to consumer market, the type of customer market does affect marketing decisions on the whole.

Competition:
Competition is becoming more and more influential in a company's approach towards marketing. Competition stems from the business that is offering the same product as yours. A business has to counter this competition through marketing; some times businesses do try to have a hit at their competitors in advertisements (though not candidly). The level of competition is also a decisive factor when planning on how much to spend on marketing.

Different types of publics:
Another important microenvironment factor is the publics (government, consumer associations, financial or media publics). All of them can have an affect (positive or negative) on company's reputation and marketing.

Demography:
Good marketing managers tend to spend plenty of time in conducting demographic research for their targeted consumers. Demography is the research of gender, age, race or anything else related to consumers. International businesses are concerned about various races (Asians, Hispanics, etc) and their different set of demands. While the terms like "baby boomers" or "generation X" were invented to reflect the specific age groups of consumers.

Economic Factors:
All the variables of economic markets like inflation, rate of exchange, fiscal policies and monetary policies fall under macro environment factors. They affect all businesses, and needless to say their marketing efforts as well.

Other Factors:
Other notable macro and microenvironment factors are marketing intermediaries, political stability (or instability), new technologies or natural forces.

Managing your portfolio risk through speculation and hedging

Before we look into hedgers and speculators, let's read a little into what is risk and future contracts and why do we need future contracts in the first place. Starting from risk, investment risk is the chance that in future the profits or returns will be smaller (or no return at all) than expected. Investment risk arises from uncertainty, and because uncertainty is always there, risk cannot be separated from any form of investment.

Coming to the futures contracts, they are the agreements between two parties to buy or sell some commodity in the future at current rates (or the price decided at the time of contract). In this case the seller minimizes the risk of a cut down in prices by foregoing some potential gains, while buyer assumes the risk expecting larger yields.

Hedging:
In portfolio management hedging is regularly used to secure the investors from some negative events in the future. In a simple futures contract, where A agrees to deliver some commodity to B after eight months at current prices, A is making sure that if the price for that particular asset goes down, he/she will remain indifferent to that slump. Note that A is also missing out on some potential profits that he may get in case the prices rise instead of going down, but he/she has secured himself from a loss in case of a negative event (i.e. adverse inflation).

Hedging is used to reduce risk, but any reduction in risk means a reduction in expected profits and in the end it comes down to investor's intuition that whether they want to go for “more-profits” or “less-risk”? Normally the investors who are in doubt (scared of market fluctuations) will go for hedging, just to make sure in case of some unfavorable occurence; the loss will be minimum (or no loss in case of perfect hedging).

Speculation:
Where the hedgers are minimizing the risk, someone is needed to absorb that risk (obviously in expectations of large returns). In simple words speculators are investors, ready to assume high risk while expecting high returns. Though speculators are quite similar to normal investor, and speculation process is almost the same as investment, there are some minor differences. Speculation is short term, high-risk and high-return form of investment, where normal investments are mostly for longer periods of time. Speculators are quite vulnerable to the risk, that’s why speculative investment is not suitable for less experienced investors or the beginners.

Managing different types of external communication

These days, media is vibrant than ever, aspiring young journalists are in hunt of scandalous stories that are related to politicians, celebrities (including business tycoons) or large corporations. In addition to media, there are other external parties that you need to interact with … for example government, investors, or business associates. External communication is an effective tool to build on trust and develop clarity among these stakeholders. Some mediums used in external communications are

• Press Release
• Newsletters
• Media Interviews
• Websites & Corporate Blogs

Press Release:
Large companies have public relation departments to look into the task of issuing press release (news release) to news media when needed. Press release is also used for marketing purpose, but the prime objective is always to inform or communicate with public about some particular incident or development in the company. Press release must be made up of something that is newsworthy; headline should grab the attention of reader, while compiling press release, make sure the language used is not too extravagant (or it may sound like an advertisement).

Newsletter:
Newsletter is not for general public, it's normally intended for only subscribers. It can contain some news about the company or the industry itself (like arrival of a new technology or new service being introduced). When creating newsletter, don't confuse it with sales letter. Subscribers are expecting some news and information about the topic of their interest, a newsletter that only consist of some poorly written promotions will get nothing but loads of unsubscribing requests.

Websites & Corporate Blogs:
Websites and more importantly corporate blogs are the latest addition into the list of external communication tools, in fact corporate blogs can do better than most other mediums as they can help the brand in building a stronger relationship with customers, hence improving customer's loyalty. Plus, reader's comments make it easier to know more about your customers and their preferences. Blog writing is a specialized job because Blog is supposed to be informative and interesting at the same time.

Media Interviews:
As noted earlier, journalists are after exclusive news and stories coming out of showbiz or corporate world. When giving out some media interview, be well prepared. Make sure that you are using words that cannot be maneuvered into something disreputable for you or your company. Keep in mind your audience and the company's objectives all the time.

Public relation department or the company's spokesperson should be extra careful when dealing with some crisis situation. A crisis situation can arise when some bad news or rumor about the company becomes public; Company's credibility or reputation is at stake, mishandling such communications can prove to be the last nail in the coffin for your business.

Maintaining Office discipline at your workplace

"Discipline" … exactly what kind of feelings this word brings to you? For most of us it brings negative feelings (especially those who were punished in the name of discipline at the hands of their teachers or parents). Childhood memories of disciplinary actions and penalties can urge people to resist even the thoughts of getting disciplined. Such behaviors are unfortunate to say the least, for the individual, the society he/she lives in and for the workplace where he/she works, because discipline alone is the most important ingredient in the recipe of success. We are bestowed with everything we need to achieve our goals; all we need to add is a little discipline (self-control).

When you are at the helm of affairs in your company or workplace, your first task is to maintain discipline in your office. Workplace discipline means regulating the employees, making them abide by the rules and policies of the company and follow guidelines. Simple, as it may sounds but it's not that easy. Managers have got to be strict, but not to a threatening extent. Excess of check and balance will irritate workers and they'd be looking to dump the job somehow. At the same time, some managers tend to lose all control while trying to create a friendly atmosphere. What, a good manager should be able to do is to keep a balanced approach, not overly strict and not too lenient.

As a manager or supervisor, the simplest and the most effective way to uphold discipline is to act exactly in the way you want your subordinates to precede. You want them to be punctual, impress them by arriving at time day after day, you want them to stop wasting time, show them how dedicated you are about the work yourself. Similarly, refrain from using profane language if you expect them to act levelheaded during working hours. Manager should always be an exemplary figure, by setting an example you don't leave any room for unruly behavior for your employees.

Every now and then, you have to deal with employees who are not ready to listen, no warnings, no disciplinary hearings seem to do anything. In order to protect other employees, company's interest and the office environment, you are left with no choice but to sack them. In developed countries (where you have laws and legislations protecting labor's interests), firing someone on disciplinary grounds can cause problems for managers. If the worker feels he didn't deserve to be dismissed like that, he/she may look to take some legal action against the authorities. That's why you should be having a record or documented proof of all the warnings that were issued before the employee was forced to leave.

Improving your personal productivity in this fast paced world

Just ask anyone around you, and you will find most of the people complaining about their low personal productivity. How they were not able to give their hundred percent and how much more they could have achieved only if they were able to utilize their full potential. How, for some reason they keep falling for the less important, insignificant activities every now and then? Isn’t it strange that the man has been inventing so many machines and devices to keep up with the time and complete lengthy, irksome tasks in shorter period; still the time manages to run faster?

In our effort to catch up with this fast paced world, and to meet all the expectations of the people around us, we pointlessly drift through the days and nights of our lives, years and years seem to pass in a twinkling of an eye and every time we look back, we are struck by a sense of guilt, realizing that we have spent most of our time in activities that were of no use to anybody. Even those who are relatively more successful than a common man will agree that they were capable of doing much more than what they have achieved so far. So what’s there to be done? Luckily, it’s never too late to start improving.

Time Management:
Good personal productivity is closely linked to better time management but good time management is something easier said than done. Who can deny the importance and scarcity of time, yet we continue to waste time, sometimes watching TV, going out and staying up late with friends, checking emails a thousand times on daily basis or just thinking how unfortunate we are for not having enough resources to fulfill our dreams (always forgetting that if we keep sitting idle like this, our dreams will just slip further away). To manage time effectively, you should carefully observe your daily routine. Sometimes we go through these time-wasting activities just out of habit. These habits are often not hard to break, and sometimes just knowing that you have already wasted so much time at something without getting anything out of it can make you quit that routine.

Don't Panic:
No matter how much work is left, as the deadline keep nearing, do not panic. Panic or stress will do nothing except eating out your energy and the time that can be used for more preparation and work. That doesn’t mean you should stop worrying about the cut-off dates or targets at all, just don’t let the fear of not being fully prepared or not meeting the deadline overcome. In panic, you may push yourself a little too hard and as a result you will end up feeling depleted.

Be focused and keep challenging yourself:
Again, simple rule but really hard to abide by. Never loose your focus, even before doing something constructive; ask yourself if it is going to help your goals in any way or not? Keep challenging yourself on constant basis, never shy away from challenges because often a challenge is all you need to get yourself back on track.