Discuss the role of export management firm in indirect-01100

Export Management Companies: An EMC acts as the export department for one orseveral producers of goods or services. It solicits and transacts business in the names ofthe producers it represents or in its own name for a commission, salary, or retainer pluscommission. Some EMCs provide immediate payment for the producer's products byeither arranging financing or directly purchasing products for resale. Typically, onlylarger EMCs can afford to purchase or finance exports.

EMCs usually specialize either by product or by foreign market, or sometimeseven both. Because of their specialization, the best EMCs know their products and themarkets they serve very well and usually have well-established networks of foreigndistributors already in place. This immediate access to foreign markets is one of theprincipal reasons for using an EMC, since establishing a productive relationship with aforeign representative may be a costly and lengthy process.

One disadvantage of using an EMC is that a manufacturer may lose control overforeign sales. Most manufacturers are properly concerned that their product and companyimage be well maintained in foreign markets. An important way for a company to retainsufficient control in such an arrangement is to carefully select an EMC that can meet thecompany's needs and maintain close communication with it. For example, a companymay ask for regular reports on efforts to market its products and may require approval ofcertain types of efforts, such as advertising programs or service arrangements. If acompany wants to maintain this type of relationship with an EMC, it should negotiatepoints of concern before entering an agreement, since not all EMCs are willing to complywith the company's concerns.