Chapter 5 Flashcards
The difference between our export earnings and import expenditure (including invisibles”)
Balance of payments
When the exportation of goods exceeds imports
Trade surplus
When the importation of goods exceeds exports
Trade deficit
Services performed by one country for another. They are considered “invisible”, because one cannot actually see such services.
Invisible exports or imports
If a country finds itself in deficit, it can do one of two things to put matters right:
- Reduce expenditure on imported foreign goods
- Sell more goods and services overseas to increase foreign revenue
What does GATT stands for?
General Agreement on Tariffs and Tarde
What are the four fundamental principles of the GATT?
- Non discrimination
- Consultation
- Tariff negotiation
- Trade liberalization
Why companies benefit from selling overseas?
- Trade due to non-availability of a particular product
- Trade due to international differences in competitive costs
- Trade due to product differentiation
Overseas sales person must:
- Understand how culture functions in individual overseas markets
- Understand the value system of the foreign market
What elements does the culture include?
Abstract and material
What are some abstract elements of the culture?
- Values
- Attitude
- Ideas
- Religion
What are some materials elements of the culture?
- Level and type of technology
- Consumption patters
What are some indirect methods?
- Agents
- Distributors
- Licensing
- Export houses
What are some direct methods?
- Subsidiary companies
- Joint ventures
- Direct selling
What additional factors must be considered when pricing decisions for international markets?
- The potential logistic problems
- Transportation
- Packaging
- Quotations
