Midterm Flashcards
6 most common mistakes of potential exporters
- Not following Export counseling and the marketing plan
- No commitment on the part of management
- Insufficient care in choosing the foreign distributor
- Unwilling to modify products
- Not using local language in marketing or product
- Not using an export management company
In what 6 ways can you involve your firm in international trade?
- Exporting
- Franchising
- Joint Ventures
- Counter Trade
- Licensing
- Foreign Direct Investment
List 8 reasons why US firms do not engage in international trade
- Fear of Unknown
- Domestic is enough for small + med firms
- Don’t Understand the Language + customs
- Complexities with Shipping + documentation
- May have to Modify Products
- Belief there is not enough sales prospects abroad
- Embarrassed
- Not enough Incentives to export
List 5 benefits of a foreign trade zone?
Where is the one in Maine?
- Indenfinite inventory
- Reduce processing fees
- Only pay taxes/duty when you sell product
- Creates local jobs
- Easier to do trade with foreign companies
4 in Maine one is located In Bangor Maine
List the 6 steps as a firm that you can implement in researching for potential international markets?
- Trade Shows
- Join Trade Mission
- Participate in Department Of Commerce matchmaker program
4.Employ export marketing consultants
- Videoconference a potential buyer
- Fly to market with highest potential
What are the 5 objectives for the first trip? Which is the most important and most challenging?
-Examine firsthand the markets you have selected
-Determine which type of distribution is best for your product. (Direct sale, appointment of distributor, appointment of commissioned salesperson)
-Establish critical contacts. (Bankers, Embassy, Airlines).
-Determine if more formal market research is required
-**Acquire a feel for the people, culture and methods of doing business
List 10 types of indirect + direct distribution
Indirect:
1. Export jobber, wholesaler or broker
- manufactures representative
- Export agent or Export management Company
- Export Trading Company
Direct:
1. Sell to foreign retailers
- Direct sales to end users
- Establish your own sales office in a foreign country
- Appoint commissioned representative
- Joint Ventures
- Wholly owned Subsidiaries
6 advantages of international trade
-Increased profits
-Smooth seasonal fluctuation
-Create new markets
-Increased productivity by fully utilizing company personnel
-Tax advantage
-Extend product life cycle
8 services that either government (fed + state) or private organizations do to help exporters?
- Foreign commercial service
- Export Counseling
- International Partner search
- Market research
- Trade leads
- Advocacy center
- International Buyer Program
- Appoints overseas distributors
10 business protocol areas one should review before going abroad. Give example for each
-Handshaking: In Mexico, give a firm handshake similar to what is done in the USA or Canada
-Business Cards: Important in Mexico’s business culture. Bring some to every meeting.
-Dining etiquette: In Mexico say buen provecho (enjoy your meal). Tip 10 to 15%
-Toasting: say salude when toasting
-Women Traveling: In Mexico women should avoid appearing like tourist or dressing flashy.
-Drinking: Drinking is popular in Mexico. The drinking age is 18 and popular drinks include tequila and mezcal
Smoking: There is a ban on smoking in all public areas in Mexico
Language: Spanish is spoken by 99% of the population
Gift giving: Important part of culture. when invited into a home you should always bring a gift such as flowers
Body Language: Tend to make hand and arm gestures throughout conversation
6 differences between African country and USA
-Libya has a much higher unemployment rate at 30%
-Libya has a transitional government, while America is a democracy
-Libya has no railway system
The major religion in Libya is Islam
-Libya is collectivist, while America is individualistic
-FOr corporations the highest tax bracket in Libya is 60%
Power Distance
Deals with the fact that all individuals in societies are not equal
expresses the attitude of the culture towards there inequalities amongst us
Defined as the extent to which the less powerful members of institutions and organizations within a country expect + accept that power is distributed unequally
High=heirachy
Individualism vs Collectivism
The degree of interdependence a society maintains
society defined as “I” or “we”
Individualists (High): look after themselves + family
Collectivist (low): believe people belong in groups.
Masculinity vs femininity
Masculine= Gender norms are present
Feminine= Genders are emotionally closer. Less compition.
Uncertainty Avoidance
The way that a society deals with the fact that the future can never be known: try to control the future
(high) more anxiety about the unknown
(low) willing to explore the unknown less anxious
Long Term Orientation vs STO
How society deals with the challenges of the present +future+ societies, priorities
LTO: long term success is viewed as more important
STO: short term success is viewed as more important
Indulgence vs restraint
Indulgence: focus on individual well-being and personal freedoms
Restraint: Holding off on your needs based on societal norms and the need to do ones duty
Export Trade Company
Bigger version of EMC
-Independent companies help companies export
-Find buyers overseas+give them info
Handles exportation process
-All legal requirements+ regulations
-Reduce training+recruitment costs
-Will buy your product
-Takes a slice of profits
Export Management Company
-Warehousing, Shipping, Insurance
-Help in Finding markets-travel overseas on your behave
-International Standards
-Deliver product to end market
-Appoints overseas distributors or
commission sales agents
-Trade shows
-Takes a slice of the profit
Direct
Export Council
Experienced business people
Donate time to help stimulate exports +trade from US
Indirect Distributions
pros: don’t have to learn culture, reduce risk + save energy+ capital
Add cost to end user-makes product less competitive, lose control + must battle for their attention
Direct Distributions
Distributor: firm in foreign country who is experienced in importing your type of product + selling it in that market
Exclusiveness for your product
Joint Venture is the best system because
it allows someone who’s an expert in that culture sell your product
Sections of ITA
-Create wealth by strengthening the international competitiveness of US industry
-Promote trade, investment + economic growth internationally
-Enforce international trade laws + agreements
