Exporting and Trading info

SUMMARY ■ Although the principles of selling abroad are the same as those in the home country, the international businessperson must deal with a less familiar environment, which may be subject to rapid change. ■ Some methods for broadly assessing foreign demand for products are analysis of consumption patterns, estimates based on what has happened in otha countries, studies of historical trends, income elasticity, regression, and gap analysis. Some problems with these tools include taste and technology changes that render past observations and observations in other countries invalid for specific countries. ■ A standardized approach to marketing implies maximum uniformity in products and programs among the countries of operation. Although this will min- Burton and Ed McMahon are now 'hooked' on Perrier" and Perrier "contains no sodium which causes heartburn." These claims were abandoned in favor of messages emphasizing the water's qualities as a natural ...

DISTRIBUTION A company may accurately assess market potential, design products or ser- and promote to likely consumers; however, it will have likelihood of reaching its sales potential if the goods or services are not conveniently available to customers. This includes getting goods to where people want to buy them. For example, does a man prefer to buy hair dressing in a grocery store, barber shop, drugstore, or some other type of outlet? Distribution is the course—physical path or legal title—that goods take between production and consumption. In international marketing, a producer must decide on the method of distribution among countries as well as the method of distribution within the foreign country of sale. We have alreadj discussed many considerations for distribution, including the channels of distribution to move goods among countries, how the title to goods gets transferred, and the forms of operations for foreign-market penetration. This section does not repeat these as...

BRANDING There are four major branding decisions that MNEs make: brand versus brand, manufacturer's brand versus private brand, one brand versus mult brands, and worldwide brand versus local brands.49 Only the last decision" substantially affected by the international environment. Some firms, such as Coca-Cola, have opted to use the same brand logo globally. This gives instant recognition and may save some expense promotion. Some others, such as Nestle's Nestea and Nescafe, have assc many of their products under the same family of brands in order to share" the goodwill that the company has developed. Yet, there are a number problems in trying to use uniform brands internationally. Language Factors One problem is that names may carry a different association in another1 guage. GM thought that its model Nova could easily be called the same' Latin America, since it means "star" in Spanish. However, people started; nouncing it "no va," which is...

PROMOTION Promotion is the process of presenting messages intended to help sell product or service. The types and direction of messages and the method presentation may be extremely diverse, depending on the company, produ or country of operation. The Push-Pull Mix Promotion may be categorized as push, which involves direct selling tec niques, or pull, which relies on mass media. An example of the former wot be door-to-door selling of encyclopedias; an example of the latter would magazine advertisements for a brand of cigarettes. Most firms use combir tions of the two strategies. For each product in each country a company mi determine its total promotional budget as well as the mix of the budget t tween push and pull. Several factors necessitate differences between push and pull amo countries: (1) the type of distribution system, (2) the cost and availability media to reach target markets, (3) consumer attitudes toward sources of formation, and (4) price of the product relative to ...

Price Escalation in Exporting  If standard markups are used within the distribution channels, lengthening  me channels or adding expenses somewhere within the system will increase the price to the consumer by a greater amount than the initial increase. Assume that the markup is 50 percent and that a product costs $ 1.00 to produce. The price of the product would then be $1.50. If the cost of the production were to increase by $.20 to $1.20, the markup of 50 percent would then make the price of the product $1.80 instead of merely $1.70. In export sales, two things happen to escalate the price of goods to the consumer: First, channels of distribution are usually longer because of greater distances and because of the need to engage organizations that know export procedures and/or selling in the foreign market; second, tariffs are an additional cost that may be passed on to consumers in an escalated form. There are several implications of price escalation. Many seemingly expo...

MARKET SIZE ANALYSIS  We have explained the importance of market potential in determining a com- pany's allocational efforts among different countries and have discussed some     common variables used as broad indicators for comparing countries' market  . ■ ., , ,  potentials. The following section covers some techniques that can be used to  estimate the size of potential markets. These are merely tools to help man- estimate market potential, thus helping in the decision of which markets to emphasize.3 To determine the potential demand for a given company, management usually must first estimate the possible sales of the category of products for all companies and then estimate its own market-share potential. For advanced countries, there usually are consumption figures and trained market-research personnel, so costly and detailed research studies are feasible. For many LDCs, however, it may be useful to develop inexpensive forecasting methods based o...

FUNCTIONAL™ MANAGEMENT, OPERATIONS, AND CONCERNS In the preceding part we discussed those alternatives that normally transcend decision making within functional disciplines. In this part we will examine concerns of a more functional orientation. This does not imply that these are of less importance. In fact, they are essential considerations within the firm's global implementation of strategy. Chapter 18 emphasizes the uniqueness of each company, product, and country in international marketing. The chapter discusses means for estimating the market size abroad, then analyzes the conflicting advantages for standardization and differentiation of product, price, promotion, brand, and distribution. Chapter 19 discusses the problems of accounting and tax when legal systems, exchange rates, and inflationary conditions vary among countries. The chapter first examines the factors influencing the differences in accounting methods among countries, moves to the handling of transactions in ...