global marketing 8

7/29/2019 Global Marketing 8

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,

Exporting,and Sourcing

(Global Edition)Chapter 8

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Chapter topics:

export marketing

activities

imports and exports

Key export participants

2011 Pearson Education, Inc.

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product, at the same price, with thesame promo ona oo s n a erenplace

Export marketing tailors the marketing


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.

An understanding of the target market

environment

identification of market potential

ec s ons concern ng pro uct es gn,pricing, distribution and channels,

advertising, and communications


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1. The firm is unwilling to export; it will not even fill an

unsolicited export order. unsolicited orders; such a firm is an export seller

3. The firm explores the feasibility of exporting (this stage may

bypass Stage 2)

4. The firm exports to one or more markets on a trial basis

5. T e irm is an experience exporter to one or more mar ets

6. After this success, the firm pursues country- or region-

7. The firm evaluates global market potential before screening


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strategy and plan

... should be based on a number of criteria: market-related characteristics

cost-related as ects

the regulatory framework

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the importance of these selection criteriaepen s upon e n us ry e mar e s a en

into account


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1. Market Potential

2. Market Access

3. Shipping Cost & Time

.

5. Service

6. Product Fit


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Government Programs thatSupport Exports

ax incentives Subsidies

overnmen aassistance

Free trade zones

The Miami Free Trade Zone, near the airportand port of Miami, manages transactions of


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Govtal Actions to DiscourageImports & Block Market Access

Import controls

on ar arr ers

Quotas

Discriminatory procurement policies

Restrictive customs procedures

Portland CustomsCenter

Arbitrary monetary policies

Restrictive regulations


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Single-column tariff

Simplest type of tariff

imports from all countries on the same

Two-column tariff

General duties plus special duties apply


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Reduced tariff rate applied to imports from

GATT prohibits the use, with three exceptions:

s or ca pre erence arrangemen s a rea yexisted

re erence s part o orma econom cintegration treaty

n us r a coun r es are perm e o granpreferential market access to LDCs


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Ad valorem duty xpresse as percentage o va ue o goo s

Specific duty

Expressed as specific amount of currencyper unit of weight, volume, length, or otherun o measuremen

Compound or mixed dutiesApply both ad valorem and specific duties

on the same items


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Other Duties andImport Charges

Anti-dumping Duties Dumping is the sale of merchandise in

export markets at unfair prices

Special import charges equal to thedumping margin

Countervailing Duties

Variable Im ort Levies Temporary Surcharges


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Foreign purchasing Export distributor

agen s Export brokers

xpor comm ss onrepresentative

Export merchants

oopera veexporter

companies

re g t orwar ers

Manufacturers

exporrepresentatives


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Organizing for Exporting inthe Manufacturers Country

Exports can be handled

As a part-time activity performed bydomestic employees

hrough an export partner

Through an export department

Through an export department within aninternational division

For multi-divisional companies, eachpossibility exists for each division


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Organizing for Exporting inthe Market Country

Advantages: control and communications

Representation by independentintermediaries

Advantages: best for situations with small


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Export Financing andMethods of Payment

Documentary collections (bill of exchange)

Cash in advance

Sales on consignment basis


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Flowchart ofDocumentary Credit

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Customs Trade PartnershipAgainst Terrorism

he US Customs andBorder Patrol inspectscar o

C-TPAT aims to have

their security and that

They get inspection


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Refunds of duties paid on imports that are

re-exported

Used in the US to encourage exports

er , re uce raw ac s on expor s

to Canada and Mexico na a o re uce raw ac s n or er o o nthe WTO


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Must emphasize benefits of sourcing fromcountr other than home countr

Must assess vision and values of companyleadershi

Advantage can be gained by

activities in a single location

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Tapping opportunities for product


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Management vision

Factor costs and conditions Customer needs

Logistics

Political factors

Foreign exchange rates


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Behavior of costs (fixed plus variable) for exporting,

increases

Emphasizes rational behavior, with the costs andbenefits of strategic alternatives being compared, toidentify those options which maximize long-run

profits

Control is single most important determinant of both


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Stages-of-DevelopmentApproach

Based on incremental model of internationalization,

an evo u onary process w rms gra ua ydeveloping a greater commitment to foreign markets,

foreign sales, etc.

Decisions regarding foreign market entry modestaken incrementall with a shift to other entr

modes occurring only when previous ones haveproved inadequate


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Internationalization process involves several stages:

1. Ex erimental involvement sta e: ex ortinusually marginal and intermittent

2. Active involvement stage: systematically exploreexport possibilities in number of foreign markets

3. Committed involvement stage: long-runcomm tment to nternat ona mar et ng

4. Global involvement stage: broad international, -methods differ widely in pursuit of competitive


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Emphasizes pragmatic nature of decision-

making in most organizations

Because of external uncertainty and politicalnature of decision-makin or anizations maadopt satisficing or muddling throughrather than a rational-analytical approach to

decision-making


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