Piggy Backing Exporting Firm Arrangement Explained

The scenario describes a specific international marketing strategy. This strategy involves an exporting firm, known as the 'rider', utilizing the existing distribution network of another established firm in the foreign market, referred to as the 'carrier'. This arrangement allows the rider to enter a foreign market more efficiently by leveraging the carrier's established infrastructure.

This phenomenon is specifically termed:

• Piggy Backing: This is the correct term. It describes the arrangement where one company (rider) utilizes another company's (carrier) distribution channels in a foreign market.

Understanding Alternative Trade Concepts

It's important to differentiate this from other trade terms:

• Counter Trade: This involves exchanging goods or services for other goods or services rather than cash. It doesn't necessarily involve using another firm's distribution network.
• Barter: A direct exchange of goods or services without involving money. It is a simple form of counter trade and not related to leveraging distribution channels.
• Switch Trading: A complex form of counter trade usually involving three parties, where the payment obligation is transferred. It is not directly related to using a partner's distribution system.

Therefore, the use of an established firm's distribution channels by an exporting firm is correctly identified as Piggy Backing.