Page 182 - DMGT547_INTERNATIONAL_MARKETING

Unit 10: International Logistics and Distribution Channels

1. Agents who look after the interests of manufacturers: Export Broker is to bring a buyer Notes
and seller together, for which he is paid the fee. The Broker may be assigned some or all
foreign market seeking potential buyers. It negotiates the best terms for the seller
(manufacturer) but cannot conclude the transaction without the approval of the principal.
As a representative of the manufacturer the export broker may operate under its own
name or that of the manufacturer. For any action performed the broker receives a fee/
commission. An export broker does not take the title of the goods. He is very useful
because he has the extensive knowledge of the market, its supply, demand and foreign
customers. He can, therefore, negotiate the most favourable terms for the manufacturer.
2. Manufacturer’s export agent or sales representative: Manufacturer’s export agent is not a
manufacturer’s employee. In fact, he is an independent businessperson who usually retains
his/her identity by not using the manufacturer’s name. Having more freedom than the
manufacturer’s own sales person, a sales representative can select when, where and how
to work within the assigned territory. Working methods include presenting product
literature and samples to potential buyers. An export agent pays his/her own expenses
and may represent manufacturers of related and non-competing products. He can operate
on either an exclusive or non-exclusive basis.

Did u know? Like a broker the manufacturers export agent works for commission.
Unlike the broker, the relationship with the manufacturer is continuous and more
permanent. The contract is for a definite period of time and the contract is renewable by
mutual agreement. The manufacturer, however, retains some control because the contract
defines the territory, terms of sale, method of combination and so on.
3. Export Management Company: An Export Management Company (EMC) manages under
contract the entire export programme of a manufacturer. An EMC is also known as a
Combination Export Manager (CEM) because it may function as Export Department or
several allied but non-competing manufacturers. In this regard, those export brokers and
manufacturer’s export agents who represent a combination of clients can also be called
EMC. When compared with export brokers and manufacturer’s export agents the EMC
have greater freedom and considerable authority. EMC provide extensive service ranging
from promotion to shipping arrangement and documentation.
4. Cooperative exporter: A cooperative exporter is a manufacturer with its own export
organisation that is retained by other manufacturers to sell in some or all-foreign markets.
In fact, this intermediary is also a manufacturer; however, it functions like any other
export agent. The usual arrangement is to operate as an export distributor for other suppliers
sometimes acting as a commission representative or broker. Because, the cooperative
exporter arranges shipping it takes possession of goods but not the title.
5. Webb-Pomerene association: A Webb-Pomerene Association is formed when two or more
firms usually in the same industry join together to market their products overseas. The
association constitutes an organization jointly owned by competing U.S. manufacturers
exclusively for the purpose of export. Basically a Webb-Pomerene Association is an export
cartel. Although cartels are illegal in some of the countries like US, however, this kind of
cartel is allowed to operate as long as it has no anti competitive impact on domestic
marketing in the US market.
6. Purchasing/buying agent: An export agent represents a seller or manufacturer. The
purchasing/buying agent represents the foreign buyer. By residing and conducting
business in the exporter’s country the purchasing agent is in a favourable position to seek
a product that matches the foreign principal’s preferences and requirements. Operating on

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