quiz 3 Flashcards
whats an agent?
your legal representative. “as a legal representative… “
whats reverse dumping?
selling products at home below price
How does Local Distribution work in terms of finding a distributor? What are some of the most common approaches (who helps/what do they attend?)
- use existing channels found through assistance from government agencies
-use trade fairs and international conventions
PART 2 How does Local Distribution work in terms of Screening Distributors? (any expectations? do financial standings matter?)
- they have a key performance criteria
-the financial strength of a distributor is less important if the firm who is entering can support that company during the start up period
what is looked at during screenings?what might a late entrant deal with?
what are the 7 criterias for local distributors ?
1st part
-key performace looked at
-a late entrant might find trouble finding good distributor so screenings are even more important to not miss key characteristics
2nd
- Previous experience (products handled, area covered, size)
- Services offered (inventory, repairs, after-sales service)
- Marketing support (advertising and promotional support)
- Financial strength
- Relations with government
- Cooperativeness
- Whether or not handling competing products
these criterias are seen important based on situations of how company attaches a criteria
again, financials may not be as important if firm can support company at start up
Within Local distribution (in direct exporting), who does a personal visit? what do they do? who would they look for? based on experience who would be chosen?
1.once leads are developed, manager conducts a personal visit to a country
-they talk to the users of the equipment to see which distributors they would like to buy from and why (they find 2-3 candidates)
-they visit these 2-3 candidates and see which would be able to sign up
-before making final choice, further look for the distributor who has the key person for your line (person must be able to champion for new product line)
- based on experience the successful distributor includes the one who has 1 person in org willing to take that new line and treat it as its baby
Within Local Distribution (direct exporting), how would negotiating a contract work? what would the contract consider?
- terms like rights and obligations of a manufacturer and distributor
-include the length of contract
-possible conditions for its renegotiation
service quality (what is the critical incidents/moments of truth? whats the desired service? whats predicted/expected service? whats adequate service? wats percieved service? ) what does this order mean?
CRITICAL INCIDENTS/MOMENTS OF TRUTH – the period of time during which an individual consumes the service
Desired Service – highest or ideal quality
Predicted or Expected Service – lies somewhere between the desired & the adequate service
Adequate Service – forms the lower limit below which the service quality is unacceptable
Perceived Service –must lie between the desired & the adequate service levels to make sure customer is satisfied
They were written based on surprise tolerance,acceptable tolerance, to dissatisfaction
how does culture affect service quality? (4 things) (hints: quantified,preferences,satisfaction,varies)
- Since services are intangible, service quality is more difficult to quantify, allowing for a more subjective view
- Different cultures have different habits and preferences and therefore different definitions of service quality
3.So culture affects perceived service quality & customer satisfaction strongly
3.And what is considered high service quality in one country is not necessarily high in another country.
exclusivity importance
you dont want distributors to be out and about
is sales subsidiary same as wholly sale subsidiary?
NOOOOOOO
these are 2 types of companies that fall under the purview of another, larger company. both owned by another entity
sales subsidiary:parent company usually owns the subsidiary for more than 50% of voting stock, usually are seperate legal entities and stuff
Wholly sale subsidiary: the parent company is 100% in control but can be issue in regards to cultural differences
-can have greenfield investment
why are sales subsidiary established by a company? whats it staffed with? what will sales subsidiary run then?
- when a single agent and 1 or 2 independent distributors cant be counted for effective marketing support
-staffed with locals and top managers from headquarters
-run local marketing effort, conducting market reserach, dealing with local advertising agencies, monitoring distributors performance, provide competitor info, market demand/growth, might go against top management reccomendation/wisdom
importers as trade partners (what are some examples,how are partners treated?)
- importers can initiate trade(ex:company establishes sourcing abroad, like NIKE in asia, volkswagon subcontracts with portuguese plant for new van assembly, H&M in sweden)
-McDonald’s, Levi Strauss, Toyota,
Sony. Mercedes. and Dunlop) max owe their initial presence in many smaller countries
not to a grand global strategy, but to the daring initiative shown by local entrepreneurs
who convince the company to let them represent the brand in the country.
-most buyers prefer to deal with domestic suppliers
-treat partners the way u would like to be treated
who created incoterms, how many terms are there, what 3 things does it describe
international chamber of commerse,
11 terms
they are predefined commercial terms
describes three issues:
1.Which party does Which tasks
2. Which party covers the costs
3.Which party bears the risk
pricing (which 2 terms of sale are more convenient for foreign buyers(what do they say)?, when are domestic marking and general administrative costs greater?how abt exporters?whats the preferred pricing method for exporters?)
CIF & CFR - add import duties,landing charges, freight fowarders charges,consulars fees- incurred in making CIF shipment
domestic marking and general administrative costs included in the domestic selling price are frequently greater than the actual cost of making CIF export sale
For exporters, the preferred pricing method is factory door cost.
terms of sale (what is it?what are 2 areas that require special attention?)
Export sales agreements need to specify as simply as possible the duties of both buyer and exporter.
Two areas require special attention:
-Responsibilities for patent and trademark registration.
-Designation of country and state or province whose laws will govern any contractual dispute.
export payment procedures definitions: (what do sellers,customers think;Cash in advance, Open Account, Consignment) (what are these two things;Letter of Credit L/C, Confirmed L/C, Irrevocable L/C)
Cash in advance: Few customers will pay cash in advance.
Open account: Seller assumes all risk so these terms must be offered only to reliable customers.
Consignment:Seller assumes all risk.
Letter of credit (L/C).
Document issued by buyer’s bank that promises to pay the seller a specified amount when the bank has received certain documents specified in the letter by a specified time.
Confirmed L/C.
A confirmation made by a correspondent bank in the seller’s country by which it agrees to honor the issuing bank’s letter of credit.
Irrevocable L/C.
A stipulation that the L/C cannot be canceled without the seller’s consent.
Banker’s Acceptance.
A time draft.
Maturity of less than 270 days.
Accepted by the bank on which the draft was drawn becoming the accepting bank’s obligation.
Factoring v Forfaiting; what are they and when are their types of payments due?
Factoring.
Sale of an exporter’s accounts receivable on ordinary goods, with the balance of the payment due upon delivery or soon after.
Forfaiting.
Sale of an exporter’s accounts receivable on capital goods, commodities, and other high-value goods.
Payment due at least 180 days out.
U.S. Export-Import Bank (Ex-Im Bank). ( what does it provide,who does it support)
The principal government agency that provides loans, guarantees, and insurance programs to support U.S. exporters.
Overseas Private Investment Corporation (O P I C). (what is it what does it offer and to who)
A government corporation.
Offers U.S. investors in developing countries insurance against expropriation, currency inconvertibility, and damages from wars and revolutions.
Foreign Trade Zones (F T Z). (whos version is it, what happens to goods , when are duties paid?)
The American version of a free trade zone.
Goods may be brought into an F T Z and stored, inspected, repackaged, or combined with American components.
No import duties need be paid while goods are in the F T Z.
Customs Drawbacks.
Rebates (refund)on customs duties that exported good may qualify for.
what are Foreign Freight Forwarders? what do they prepare?
Act as agents for exporters.
Prepare documents, book space with carriers and will supply marine insurance if asked.
whats Shipper’s Export Declaration (S E D). (whos form is it)(what does it control/record)
U.S. Department of Commerce form used to control export shipments and record export statistics.
