DANANG UNIVERSITY OF ECONOMICS

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INDIVIDUAL ASSIGNMENT
Student : TRAN THI THANH NHAN
Class: 43K01.2
Course: IMPORT & EXPORT BUSINESS
Instructor: DUONG HANH TIEN
Semester: II 2019-2020
 INDIVIDUAL ASSIGNMENT

Export motives can be classified as internal or external and as reactive or

proactive. What is meant by these terms with respect to export marketing?
Give examples of each of the combinations of export motives (external -
reactive, internal - reactive, external - proactive, international - proactive)

 Export motives can be classified as internal or external and as reactive or

proactive depending on the extent to which the exporter initiates or
reacts to the market. Export motives have critical impact on export
marketing and export motives were also used to predict the importance
placed on information for firms designing international marketing
plans. in particular:
 Internal proactive:
 Managerial urge: reflects the desire of management towards exporting
and other types of global marketing activities. The choice of a foreign
market entry strategy depends on the decision maker’s perceptions of
foreign markets, expectations concerning these markets, and perceptions
of the company’s capability of entering those markets. Decision-maker
characteristics, including cognitive and affective factors, can explain in
certain instances the systematic differences between managers in
attitude and behavior toward foreign activity. These decisions are
affected by the international background of the managers who have
more international experiences are more internationally minded 
affect export marketing.
 Foreign marketing advantages: serve as entry barriers for potential
competitors in foreign markets because specialized marketing can
distinguish an exporting firm from its competitors. Doing any type of
marketing job well, together with having a strong product and/or brand
franchise, means that a company can be better shielded from
competition in export markets.
 Economy of scale: advertising, distribution, or other areas, a broader
market scope created by exporting can give rise to a decrease in unit
costs of products produced. A condition for exploiting scale effects on
overseas markets to the fullest extent is that it is possible to standardize
the marketing mix internationally.
 Unique product/ technology competence: if a company has developed
unique competencies in its domestic market, the possibilities to spread
unique assets to overseas markets may be very high because the
opportunity costs of exploiting these assets in other markets will be zero
 or very low. A unique competence leads to seeking the exploitation of
exporting are usually based on the fact that there would have been
certain sunk costs incurred in developing the competence or product.

 External proactive:
 Foreign marketing opportunities: market opportunities act as stimuli
only if the firm is able to secure resources necessary to respond to the
opportunities. Market opportunities abroad have often exerted a strong
influence upon the firm’s willingness to export  set up appropriate
export marketing strategies.
 Change agents: consist of Government agencies, industrial trade
associations, banks, chambers of commerce, port authorities, and other
organizations. Major export promotion activities include giving and
guaranteeing loans, providing credit facilities and insurance, publishing
basic market data on foreign markets, exhibiting at trade fairs and
exhibitions, sponsoring and participating in trade missions, providing
trade leads and reports on individual companies, and being party to a
trade agreement or convention.

 Internal reactive:
 Risk diversification: diversification in markets helps the firm to cope
with the ever-changing general business conditions in the domestic
market. If the home market should be in the midst of a recession, export
sales can still be made since world markets are seldom equally
depressed simultaneously.
 Extend sales of seasonal product: some industries may be less resistant
to business cycles than others. Seasonality in production and demand
conditions in the domestic market may be industry specific and can act
as persistent stimuli for foreign market exploration.  selling seasonal
products in countries where the seasons are opposite to those at home.
 Excess capacity of resources: domestic sales are below expectations, so
inventory can be above desired levels. When domestics markets are
normal, global marketing activities may be terminated.

 External reactive:
 Unsolicited foreign orders: The receipt of an unsolicited inquiry for
product, price, or distribution information may be a very common
method by which firms become aware of opportunities in export
markets. These inquiries can result from advertising in trade journals
 that have a worldwide circulation, through exhibitions, and by other
means.
 Small home market: A company may be pushed into exporting because of
a small home market potential. Domestic markets may be unable to
sustain sufficient economies of scale and scope, and these companies
automatically include export markets as part of their market entry
strategy.
 Stagnant or declining home market: home market saturation occurs
when a company is, at best, receiving declining marginal revenues from
its marketing effort, or, at worst, is in a situation where required
incremental sales revenue is less than the costs of the related
incremental marketing effort.

 Examples:
 External proactive:
Change agents: Ex: government stimulation measures can have a positive
influence, not only in terms of any direct financial effects that they may
have but also in relation to the provision of information regarding market
opportunities in a foreign country.
 Internal reactive:
 Extend sales of seasonal product: For example, ski equipment and
clothing from such companies as Saloman, Rossignol, Olin, Head,
Columbia, and North Face have markets in the northern hemisphere
(North America and Europe) during the months of November–
March whereas markets in the southern hemisphere (Chile,
Argentina, New Zealand, and Australia) would be best during the
period May–September.
 Excess capacity of resources: Ex: In the US BHK bleached hardwood
pulp markets, the effective list price has been reduced by US $ 30-50
/ ton amid high worldwide inventories, constant pressure from
buyers across the US and reduction of 50 USD / ton in Europe at the
end of July. The effective list price in August for BEK powder fell to
US $ 970-990 / ton, while North American BHK powder fell to US $
960-980 / ton. The main reason prices continue to fall to low levels
is due to an increase in global inventories. Manufacturers' reserves
around the world have increased by two days to 53 days of supply,
for BSK at 43 days and 64 days for BHK, both of which are far
beyond the "equilibrium" level and will take several months to
address this imbalance.