Sample Assignment MS-64 JAN - JUNE 2017

Course Code MS - 64 Course Title International Marketing Assignment Code MS-64/TMA/SEM - I/2017 Assignment Coverage All Blocks

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School of Management Studies

INDIRA GANDHI NATIONAL OPEN UNIVERSITY MAIDAN GARHI, NEW DELHI – 110 068

1. What do you understand by the term ‘International Marketing’? Explain the reasons for which firms enter international markets. International marketing is simply the application ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, which is a similar term. For the purposes of this lesson on international ---------------------------------------------------------------------------------------------------- are interchangeable. An international market is defined ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------from its owners like a corporation, is usually a citizen of the country where it is organized. IBM, for example, was formed in ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------international market. The conceptual opposite of an international market is the company's -------------------------------------------------------------------------------------------- national boundaries of a company's home country. As technology creates leaps in ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------business in almost any country around the world thanks to advances in international trade. According to the ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------33 times between 1951 and 2010. Brands and products that originate in one ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and quality in the United States – and many American brands, like Warner Brothers motion pictures, have similar footholds overseas. However, globalization has created just as many ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------that their products are high in quality and affordability. Additionally, these products cannot be marketed identically ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------behaviours. American and European companies especially have ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------in consumers, demographics, and world markets. Companies who have done this very well ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to ‘Coke Lite’ for those countries. UPS, known in America for their brown trucks, issued a fleet of a different color after learning that their flagship brown trucks resembled Spanish hearses.

Rapid technological advances mean that ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and sell their products internationally . This means that almost anyone with the ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------international marketing strategy. Companies selling goods that have customs ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------may have a more difficult time setting up their international export business, they also have the opportunity to expose other countries to native products they couldn’t access otherwise.

Other types of companies ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, and direct investment.

Exporting is the practice of shipping goods directly to ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------drinks, Honda, and retail giant H&M. In fact, H&M paid $3.5 million for a 30-second commercial during the 2012 Super Bowl, a marketing bonanza that has long been dominated by American brands.

Joint venture companies ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------a Japanese electronics company and a Swedish telecommunications company. Their international marketing strategy, comprised of bright colors and modern ------------------------------------------------ the world over. A direct investment company places a fixed asset ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------with factories in many other countries that assemble personal computers from parts made all around the world. Dell ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------products; Dell computers are custom-assembled after customers place their orders.

How can be an international marketing plan developed and employed-

It can be difficult for a ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the campaign. By partnering with another group or hiring marketing experts with knowledge of foreign markets, smaller companies ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------inside international marketing representative, the most important facet of building a successful ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------potential in new markets. Once research is completed and a market is chosen, experts should ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------all cultural differences are handled appropriately and with sensitivity.

For an emerging international brand, establishing -------------------------------------------------------------------------------------------------------------------------------------------------------------------------in markets where they would otherwise have gone unnoticed.

Finally, it is important to review an ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to keep a finger on the pulse of an overseas marketing campaign. This means that results need to be tracked extremely closely, and tweaks should be made regularly to help a product gain the appropriate foothold for success.

Reasons for which firms enter international markets- 8 Reasons Why Companies ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Competitive Pressures, 6. Attractive Cost Structures Globally, 7. Growth Rate and Potential, 8. Compete Successfully in Domestic Market.

Traditionally many companies ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------fundamental changes in the way they work to be able to compete globally.

But increasingly ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to compete in foreign markets.

i. Domestic markets are saturated and ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to move out of their domestic markets.

ii. Domestic markets are small. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------boundaries.

iii. Domestic markets are growing slowly. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------international markets.

iv. In some industries like advertising, ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, a multinational will choose an advertising agency which has a presence in all the markets where the ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------be replicated in more industries.

A multinational company seeking ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and resources at many international locations to be able to serve the international manufacturing locations of its buyer.

v. Some companies will have to move out of their ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------growth alone, the competitor is likely to plough back some of the earnings from its international ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------domestic market. In other cases, a domestic player would start operations in the home country of its global -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- towards operations at home to safeguard its home market. vi. Developed markets have high cost ---------------------------------------------------------------------------------------------------------------------------------------------------------------------region, it becomes easier and profitable to market their products in that area.

vii. Countries and regions are at different stages of ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------their risk. Such companies will look for markets which are likely to ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------development, etc.

A company would not like all its markets ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of markets will make revenues and profits more consistent. The investment requirements would also be more balanced.

viii. Even if a company decides to concentrate on its ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------share and profit. The company has no choice but to enter foreign markets to maintain its market share and growth.

ix. Companies are realizing that it is no ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the resources and competencies of multinational companies, with whom they have to compete in their domestic markets.

And once they decide to take on the multinational ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. They will also learn about the ways of operation of multinational companies. This experience -------------------------------------------------------- against the multinational companies.

The boundary between a ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------No market is or will be protected from incursion by multinational companies. A company’s only choice is to go global, even if its prime interest is to protect its domestic turf.

2. Explain the contents and significance of the following documents:

(a) Commercial Invoice

A commercial invoice is the seller's bill ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of buyer (importer), date, exporter's reference number, importer's refer number, description of goods, price per unit at particular ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, name and number of the vessel or flight, bill of lading numb-e Place and country of destination, country of origin of goods, reference to letter of credit opened, terms of payment, and finally signature of the exporter etc. From the details, it also clear that invoice is an ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------for the preparation for the preparation of other export documents. For many countries, there are no prescribed special invoice forms. Exporters can use their normal invoices used for indigenous trade for exports made outside the country too and ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------certain countries like Canada, U.S.A and Australia. Some countries like Uganda, Mexico, Sudan and Tanzania require special customs invoices. Information about the special invoice forms required can be gathered from ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of Commerce too can provide the information in this respect.

Some of the -------------------------------------------------- countries are:

(1) Combined Certificate of Origin -------------------------------------------------------------- invoice and (4) Customs Invoice.

While talking about invoices we should also --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------contemplated shipment which may or may not be made in future. This is required by the importer mainly --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------a letter of credit in favor of the exporter. The importance of the proforma invoice is, thus obvious. ------------------------ invoices to the foreign buyers even if the same is not demanded.

What should ---------------------------------------------- invoice

The following ------------------------------------------------------- commercial invoice:

The name of ----------------------------------------------------------------------------------------- physical address

The name ---------------------------------------------------------------------------------------physical address

An order ---------------------------------------------------------------------------------------and importer

A complete ---------------------------------------------------------------------------------------and the HS number)

The ---------------------------------------------------------------------------------------packing list

The quantity of ---------------------------------------------------------------------------------------of packaging involved

The external ---------------------------------------------------------------------------------------package shipped.

The total price of the ---------------------------------------------------------------------------------------as a CIF/FOB price

The currency in which the ---------------------------------------------------------------------------------------dollars or rands)

The type ---------------------------------------------------------------------------------------given

The ---------------------------------------------------------------------------------------terms

The ---------------------------------------------------------------------------------------or L/C

The --------------------------------------------------------------------------------30 days on sight

The --------------------------------------------------------------------------------used

Who is --------------------------------------------------------------------------------by the incoterm in question)

What -------------------------------------------------------------------------------- charges are

The --------------------------------------------------------------------------------details

A --------------------------------------------------------------------------------of the goods

The --------------------------------------------------------------------------------destination

Any freight --------------------------------------------------------------------------------and discharge

Any t-------------------------------------------------------------------------------- requirements

Any --------------------------------------------------------------------------------to the order

Commercial invoices --------------------------------------------------------------- duties and statistics

Commercial invoices are often used by -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to control imports, will often specify its form, content, number of copies, language to be used, and other characteristics.

Example-

(b) Packing List. Packing List (also known as a bill of -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------dimensions and weight, of each package or container. It serves to inform all parties -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the package accordingly.

When you prepare your goods for ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- a number of details about the cargo such as:

Your ---------------------------------------------------------------details The importer's/---------------------------------------------------------------contact details The gross, ---------------------------------------------------------------of the cargo The nature, ---------------------------------------------------------------being shipped The type of package (---------------------------------------------------------------, etc.) The ---------------------------------------------------------------each package The number of ---------------------------------------------------------------, etc. The ---------------------------------------------------------------container) The package markings---------------------------------------------------------------reference numbers

It is also important that the details on the ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------/airway bill. You can imagine that if there is a mismatch between the packing list and the other transport/export documents that this may ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------on the packing list.

Example of Packing List-

The purpose of the packing list

The packing list should be attached to ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------determine (1) the total shipment weight and volume and (2) whether the correct cargo is being shipped. In ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------from your freight forwarder.

It is essential that the packing list agree exactly with all ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------at the port of destination. Customs Authorities in the target country have the right to delay the clearance of the shipment ----------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------required for the packing list is already stated in the commercial invoice, then the packing list may ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to see a packing list (you can never provide too much information).

3. ‘Cultural diversities across countries impact the marketing strategies of an international marketer’. Do you agree with the statement? Justify your answer giving suitable examples.

Cultural differences and global marketing

The progress of humanity and human --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------cultural differences has brought the human beings close together and has tied them in a strong bond. The --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, distribution and consumption.

The world has become a singular unit because the pace of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------conquered and crossed all the boundaries of cultural differences, and brought us together in a --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------product to the international market.

Global marketing has become a right hand tool --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------global economy, simultaneously connecting the world with a closer and inter- dependent network. International trade has existed from time immemorial and cultural differences were not given importance in the past, but today’s --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------gives an assured warranty of full-fledged success in any business.

Cultural differences exist because of many reasons. The three basic reasons of the cultural differences are-

1) People from ---------------------------------------------------------------------------- manner. 2) People from different ------------------------------------------------------------ ideologies 3) People from different cultures ------------------------------------------------------------------ and rituals One more important reason behind cultural --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, may be they are not obviously visible in the field of marketing, but the strong --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the basics of these cultural differences.

A good global marketing strategy is a necessity --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------culture. It is essential to remember the importance of local and national culture, at the same time one should not ignore the business --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------a single factor responsible for cultural differences. A weak marketing strategy is --------------------------------------------------- lead to collapse of the global business.

One example of a global marketing strategy going --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------because it was indeed a faultless product, but the company failed to consider the cultural differences before planning the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------malnutrition in African babies. Nestle failed to plan its marketing strategy keeping in mind the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------uninvited criticism and failure.

The global marketing strategy also has to study --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------international market. Some cultures show an open attitude towards advertisements, while others may not have such an open --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------always by keeping a watchful eye on the cultural differences.

The global marketing mixes like --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and the requirements of the particular country being targeted for the sale of the product. The sales will boost up only if the companies keep in mind the demands of the particular culture.

The success story of Nissin Food Products --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. Nissin’s products are sold in more than 100 countries and the company has branches and also ---------------------------------------------------------------------------------------- Philippines, Thailand, Singapore, Germany, The United States and The --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------belonging to different cultures.

The second factor of global --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------rate, and the people from developing or underdeveloped countries will not be able to spare money for expensive ------------------------------------------------------------------------------------- the price, can be modified in such a manner that it reduces the overall rate of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of people. In some cultures, people are stingy; they do not spend extravagantly on unnecessary or luxurious products, whereas in some cultures people love to spend lavishly. This factor of cultural difference also has to be kept in --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------stringent and stingy customer.

A well organized global marketing plan --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, the success of McDonald’s is a very apt example. McDonald’s menu changes according to the region where --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------. It modifies the taste of the food products according to the demand of the local people and this has helped it to gain a hold in the international market.

Promotion, the third important factor of global --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of promotional activities differ from country to country. The qualities of products admissible in --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------are influenced by cultural differences.

Apart from the legal factors, cultural and --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------association and link with the Internet also play an important role in the regulation of the promotion package. Consumer goods cannot -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------issues and choose a standardized global option.

The distribution of goods, the fourth --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------systems whereas the distribution of other products is influenced by the transport and logistical --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------European countries because of legal issues.

The cultural differences in these --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------retailing outlets while in other countries the retailing outlets can sell only specialized products. In some countries, the national distributions --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------is very difficult for the international companies and these differences directly affect the global marketing strategies.

The professionals working in the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------policies. It is very important to follow a strict code of conduct and try to understand the culture of the host country. One thing --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the colleagues of host country with respect and dignity. It is always good to be prepared in advance and learn about the culture of the host country to put the best foot forward and guarantee the success of the global marketing strategies.

Global marketing has ultimately realized the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the global marketing communications, and also the global marketing strategies. Marketers are interested to reach --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to reach the consumers across the world, and the marketers are trying

their best to understand the distinct and hidden cultural --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to spend money, time and efforts to understand the cultural differences, and to overcome the cultural --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------study programs to comprehend the obvious and the elusive cultural differences existing in the countries where they are planning to sell their products.

Global marketing and cultural differences cannot be --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of cultural differences of different countries is the key to realize these demands. The success stories of some --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of cultural differences. A careful study of the cultural differences is essential to design and modify --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------thing may not appeal to the eyes of the consumers belonging to different cultures and countries.

The global marketing mixes like price, --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, the work continues forever and ever because there are hurdles and problems and it is necessary to find the answers and --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------most successful global marketing strategies. If a company wants to rule in the global market, it is ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- differences.

A little neglect in this regard may cost the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------our culture, which is our main decision maker, whether it about our survival or about buying a product, we choose according to our --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------differences for a successful business. EXAMPLE 1-

McDonald’s beef hamburger is --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to the beef products.

EXAMPLE 2-

Campbell Soups lost $30 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------have different taste preferences. Campbell soups made no attempt to modify the taste of their soups for the British palate. Second, British soup consumers --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------same way to U.S. advertisement as U.S. consumer did.

4. Differentiate between the following:

(a) ‘Free Trade Area’ and ‘Customs Union’

A free-trade area is the region --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------countries to reduce trade barriers – import quotas and tariffs – and to increase trade of goods and services with each --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------It can be considered the second stage of economic integration. Unlike a customs union (the third stage of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, as well as other policies with respect to non-members. To avoid tariff evasion (through re-exportation) the countries use the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and local transformations adding value to the goods. Only goods that meet these minimum requirements are entitled to the special treatment envisioned by the free trade area provisions.

A free trade area eliminates tariffs and --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the member states. However, the member states don't have a common policy --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------from outside cannot move freely inside the free trade area. Otherwise, one could evade duties and excises by importing goods into the member having the lowest tariffs and from there into the target country.

For example, Canada will not impose import tariffs --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------into the USA cannot be freely imported to Canada. A customs union is a free trade --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------embers. Consequently, once goods have entered the customs union, they can move freely within the union. For example, goods from Japan imported to Turkey (which is in a customs union with the EU) can be freely imported into any EU member state without paying any import duties. Both free trade areas and customs unions --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------the handling of trade with outside nations or trade groups. Each FTA member sets its own external trade policy. A customs union, on the other hand, imposes uniform tariffs and quotas on external trade for all of its members. Members of FTAs are free to --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, or to take advantage of some characteristic of its economy. However, different external tariff rates among FTA members complicates internal --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------goods are treated within the group. The common external trade policy of a customs union --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------into Germany pays the EU's Common External Tariff, and then can be shipped to Italy or any of the other 26 EU members tariff-free. Sometimes, however, a member nation may find the common external trade policy restrictive. It may be --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------with nations outside the union. Great Britain, for example cannot negotiate special terms with Canada or other nations with which it has long-standing trading ties.

(b) ‘Pre-investment’ and ‘Post investment’ planning for management of political risk.

Political environment could involve a risk --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------when certain political upheaval happens. Political risk can occur in both democracies as well as in the totalitarian set ups as well. Political Risks are of different types. There are --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------of businessmen, say, the foreigners from certain country, a particular business family or region/state. Micro political risk risk can be hedged. Macro political risk affects all. There is no sparing of any business, any nationality, any trade or industry.

Political risk handling has to be addressed at following phases:

1. Handling political risk in the pre-investment planning phase To deal with political risk at pre-investment level, a business concern can think of following strategies:

Avoidance: Avoidance --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------/nations/ regions have to be avoided, because one cannot lose investment itself in the hope of making a return on investment.

Insurance: Insurance involves taking --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------are available which the MNCs can buy to cover investments in risky countries. Third world countries also have overseas business risk insurance outfits. Policies that provide for a maximum insured amount and a current insured amount --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------standby insurance level, a nominal rate of premium is charged.

Negotiating the Environment: A --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------repudiate ‘concession’ agreement agreed to by the past ruler. Such repudiation happens in democratic countries as well.

Structuring the Investment: The investment --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------achieved by adjusting production, transportation export,technology transfer and financial policies. The foreign project may be just an assembling unit or a just a part manufacturer.

Patenting: The MNC can ----------------------------------------------------------------------- rights or trade mark rights.

2. Handling political risk in the post-investment operating phase

After investment is made, through --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------local stake holders and Adaptation.

Short-term Profit Maximization policy involves --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------by avoiding further commitments in the project. A posture such as this itself may alter the host government’s attitude as capital flights are unaffordable in these days of globalization. Shorter Payback Period: According to --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------method is similar to payback method applied under the condition of certainty. In this method--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------or gain prior to the terminal date are considered.

Changing the Benefit/Cost Ratio (BCR) policy ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------thrust, technology transfer etc., will help the MNC buying peace with adversaries.

Developing local stake holding policy involves, --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to by local customers, investors and channel partners. It must be noted while 100% subsidiaries face nationalization threats, joint-venture do not suffer such threats.

Adaptation policy involves adapting operating --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------are not handled by the MNC.

(c) ‘Ethnocentric’ and ‘Polycentric’ orientations.

Polycentric is the policy --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------cost low. Moreover, employees who are hired at subsidiary level would not have any problem adapting to the culture. Communication is smooth within the operation. Businesses with a polycentric orientation adopt the belief ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------specific business and marketing strategy for successfully developing and building its presence in each country it expands to. Large polycentric-oriented companies are often referred to as multinational companies or --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------in each country as it does in its home country. The polycentric orientation operates under the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------may be fruitless. Therefore, when a company assumes a polycentric orientation, it adapts its products, marketing and --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------one country. In a multinational company country managers operate --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------to their particular country. Operating under a polycentric approach affords ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------marketed product, this often leads to greater sales and reduces or eliminates nationalistic backlash. Another --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------sales and profitability locally.

Polycentric Orientation

---------------------------------------------------------------concept: Focuses on ---------------------------------------------------------------uniqueness

o of each --------------------------------------------------------------- market

May ---------------------------------------------------------------each target country Fully ---------------------------------------------------------------with headquarters Marketing strategies = specific ---------------------------------------------------------------country Result:

o No ---------------------------------------------------------------scale, o duplicated functions, o higher final product costs

Ethnocentric is a staffing policy --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------countries to the host country. This approach is used best in some situations such as, a team is sent from the home country to help setting --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------experiences worldwide in order to become higher level in management of their headquarters because international managers require broad perspective and international exposure. Ethnocentrism is the conscious --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------often fail to consider diversity.

The general attitude of a firm's senior --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------at its headquarters or subsidiaries. The practices and policies of headquarters and of the operating company in the home country become the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------host nations by expatriating managers from the home country, creates a unified corporate culture and helps transfer ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------sightedness and to not promoting the best and brightest in a firm.

domestic market extension concept: Domestic ---------------------------------------------------------------are perceived as superior International ---------------------------------------------------------------secondary International ---------------------------------------------------------------as

o outlets for ---------------------------------------------------------------production International marketing plans

o developed in----------------------------------------------------------------division

5. What is the effect of ‘terms of delivery’ on the price to be quoted by an exporter? Explain giving an example. The trade terms represent an important --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------for trade, they have to agree on certain issues, e.g. goods, their specification, price, terms of payment and delivery of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, contract of carriage, division of costs, transfer of risk, export and import formalities, documents, --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------division of mutual obligations.

Incoterms is a set of definitions of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------three letters. When the seller and the buyer decide to include such an abbreviation in their contract of trade, it means that they will follow that custom of trade and decide about mutual obligations. The term of delivery is part of ---------------------------------------------------------------of trade definition ---------------------------------------------------------------of trade intended ---------------------------------------------------------------sale of goods

It defines e.g. following things in the mutual relation between the seller and the buyer

delivery ---------------------------------------------------------------delivery --------------------------------------------------------------- of costs transfer --------------------------------------------------------------- other --------------------------------------------------------------- obligations

The term of delivery does not define

relations ---------------------------------------------------------------and any third party title to the goods (“---------------------------------------------------------------”)

The term of delivery is --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------and buyer’s obligation concerning the delivery of goods.

Because the term of delivery defines the obligations in delivering the goods, the term should always be in accordance with the agreed custom of trade.

Incoterms-terms of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------those matters, which are in the own interest of the contracting party.

The seller and the buyer are the --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------stevedores, are acting either on behalf of the seller or on behalf of the buyer.

Therefore, the price quoted by --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------a shipment of cloth from Britain to Milan by sea. The basic price the exporter wished to receive was $2 a metre. The enquiry was for --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------were as follows:

1) If you quoted Ex Works, your ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------packing is seldom included in the cost. If it is included, then your price would be $6,300.

2) If you quoted F.O.R., you ---------------------------------------------------------------------------------- from the railhead. 3) If you quoted F.A.S., you ----------------------------------------------------------------------------------- price would be $6,750. 4) If you quoted F.O.B., you would ------------------------------------------------------------------------- price would now be $6,810.

5) With a C.I.F. quotation, you --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------only $80, your C.I.F. price would be $7,765.

6) Selling on a Franco Domicile --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------warehouse in Milan, would be $9,225.

From the customer's point of --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.B. terms for three reasons:

- They have other goods --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------, possibly saving fright charges.

- They can use the ------------------------------------------------------------------------------------- foreign currency. - Their ------------------------------------------------------------------------------------------- on an F.O.B. basis. (Example taken from Export Made Simple by Deschampsneufs, pp. 25-26)

To get an idea of the possible quote one can take the market price and start deducting major elements as shown below:

Market ---------------------------------------------------------------Market Less : ---------------------------------------------------------------price

Cost of the Retailer Less: ---------------------------------------------------------------up on his cost

Cost to the Wholesaler Less: ---------------------------------------------------------------on his cost

Cost to the Importer Less: Import ---------------------------------------------------------------charges

f.o.b. realization of the exporter. This will give you an idea whether with the existing cost structure is it possible to make a competitive quote.

6. With the help of an example explain how a marketing manager can use ‘country attractiveness/competitive strengths’ matrix to define the directions of growth for the organization. Grid techniques used by the -------------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------on one axis and company’s competitive strengths on other.

Country ------------------------------------- analysis 1. A country ------------------------------------------------------------------------------- on two dimensions

Market ------------------------------------------------------ opportunities Country risks (---------------------------------------------------------------------------------/political/social factors)

2. Market opportunities Market opportunities --------------------------------------------------------------------------------- products or services based on:

------------------------------- Growth -----------------------------------------------

3. Industry opportunities Industry opportunities assessment ------------------------------------------------------------------------- the following factors:

Quality of industry competitive structure (Porter’s five-force Industry Analysis Framework) Resource availability (Porter’s diamond framework)

Example 1- Marketing manager can ------------------------------------------------------------------------------------------------------------------------------” assessment using below framework-

Example 2- Marketing manager can use “country attractiveness /competitive strategy” risk assessment using below framework-

Marketing manager can use “country attractiveness /competitive strategy” matrix

Use customer perceptions to define competition. One --------------------------------------------------------------------------------------------------------------------------------------------------------------------------saw the competition with an “insider’s” lens, and encompassing its traditional rivals. The company expanded its --------------------------------------------------------------------------------------------------------------------------------------------------------------------------as the emergence of composites in the aerospace industry.

Create consistent language, processes. Example A $200B --------------------------------------------------------------------------------------------------------------------------------------------------------------------------g created a consistent view of market sizes across the portfolio during its Growth Playbook and innovation --------------------------------------------------------------------------------------------------------------------------------------------------------------------------compete.

Ensure marketing occupies a leadership role. For top --------------------------------------------------------------------------------------------------------------------------------------------------------------------------a change in perceptions a new position called “marketing director” was established, filled with well-known top performers who were charged with the task of “marketing” the function organization-wide.

Create an open mindset, mechanisms for idea generation. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------and digital brainstorming sessions, among other mechanisms. The

company’s product ideas are logged on its “eureka --------------------------------------------------------------------------------------------------------------------------------------------------------------------------, which business line managers gauge their business potential along with potential obstacles.

Live by a hard and soft incentive system. Innovation --------------------------------------------------------------------------------------------------------------------------------------------------------------------------most prestigious awards recognize innovation and science and technology advances. It celebrates those --------------------------------------------------------------------------------------------------------------------------------------------------------------------------success stories in its office hallways.

Empower decision-making at every company level. At one --------------------------------------------------------------------------------------------------------------------------------------------------------------------------t going to grow. It has adopted a “shingles structure” that pushes decision---------------------------------------------------------------------------------------------------------------------------------------------------------------------------– whatever their level.

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