Test 2 chapter 8

Question 1

Pitfall of exporting

Answer 1

Ignorance and Intimidation
Poor distribution program
Failure to customize product offering
Poor understanding of competitive conditions
Poor market analysis
Poorly executed promotional campaign
Problems securing financing

Question 2

exporting strategies

Answer 2

It helps to hire an EMC or, at least, someone with experience.
Focus on one or a few markets.
Enter markets on a fairly small scale until you ‘learn the ropes’. Add new lines after initial success.
Need to recognize the time and managerial commitment.
Build strong and lasting relationships.
Hire locals to help firm establish itself.
Keep the option of local production in mind.

Question 3

letters of credits and how they work

Answer 3

Bank guarantee on behalf of importer to exporter assuring payment when exporter presents specified documents

Question 4

drafts

Answer 4

Bill of Exchange)

Written order exporter, telling an importer to pay a specified amount of money at a specified time.

Question 5

bill of lading

Answer 5

Issued to exporter, by carrier. Serves as receipt, contract and document of title.

Question 6

export-import bank functions.

Answer 6

Act as a intermediary to reduce risk