Question

Describe piggyback of indirect method of export in entry strategies.

Answer 1

A situation in which a company markets its products through the distribution channels of another company is described as piggyback exporting. There are two main reasons for piggyback marketing. They are:

1. A local company wants to enter the multinational markets. But it does not possess sufficient money, experience or inclination to learn what it essential to be successful in the international marketplace.

2. A multinational company wants to fill out its product lines to remain competitive overseas.

In piggybacking such products are involved which complement each other instead of competing. It is one of the least problematic method of entering into the foreign markets.

Answer 2

In piggyback exporting, one company makes use of the another company’s distribution channels to market its products. These products are usually of complementary nature instead of competing. There are two main reasons why such a strategy is adopted:

*The first company wants to reach its products out to the international markets but lacks the required funds and expertise.

*The company wants to stay competitive in the markets abroad.