Foreign currency for exporters

Many exporters accept payment for their goods and services in the currency of their international customers or in a third currency, for example, US dollars. There are several reasons for this, including the fact that some commodities such as oil are traded in US dollars a buyer may prefer the price to be in a particular currency because it is more stable than their domestic currency, which basically means they do not expect it to depreciate before the contract is completed. By quoting in this...

Characteristics of SMEs

From inception the one issue which dominates the mind of the small business owner is how to survive. Many small businesses fail within the first 3 years of being in business, so it is not surprising that survival is uppermost in the mind of the owner. If the 3 year barrier is crossed, then the small firm is perhaps in a position to begin to grow and develop. There is much literature related to this issue and, of course, not all firms wish to grow beyond a certain comfort level. Small firms are...

Constraints and opportunities for SMEs

In entering the international market the smaller firm will experience a number of challenges. Its response to these challenges helps to determine the framework of constraints and opportunities within which it will operate. Often the most significant challenge for the small firm is the increased cost of doing business internationally. Indeed this is often perceived as being higher than it actually is, and can result in companies deciding not to enter the international market. A substantial...

Delivering customer values

In this chapter we shall look at the delivery of values from a marketing perspective. The focus here will be on those activities and systems which the marketer can activate to add value to the basic product or service being offered. Thus, in Chapter 7 we talked about the creation of values which are inherent in the physical product or service, as well as the service features which are part of the offering, for example, delivery, installation, financing. In addition to this are the expected...

Support for exporters available in Australia

(source Austrade - Austrade is the Australian Trade Commission - the federal government's export and investment facilitation agency. The Austrade Export Hotline is the first point of contact for any business interested in exporting. Austrade's role is to help boost Australia's export earnings, so firms who are ready to export are prioritized and initial advice covering general market information is given to help in deciding how best to proceed. Many of Austrade's services are free or partially...

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I h. ongmsoi model 1 ,u tori rig ,'k' rooted in the old coloni.il pr.u tiic oi usin hum c, in tile ai eiiK Duo to the ri.-k- in oh ed in trading n 01 gteai di-lanccs 1 Li 1 -low commi, in at'. mi 11101 olonial uarkets l n tho IH'i (. enliii onu -iiiope n p'o i,ceis would . ppo nt Mil h igoills or l.i. tors to re. ei o, > -oll. disli ihulo and i nlloi I p i nienl tor I'hi ( 1 hod 1 doing hnsnies- 1 iismed 11 prod. 11. 01 -1 ou -oil L'ioii1 goods .'h'oad n it hoi it oar ol non p.n mont. It do...

Role and importance of packaging

Packaging is a marketing issue because a product must arrive in good condition and because in the consumer market, in particular, the design of packaging can influence buying behaviour. Thus, packaging can have an important role to play in the successful entry into a market. Companies can suffer from the two extremes of either overpackaging or underpackaging their goods. In either case money is wasted. Generally speaking when shipping by sea or air, successful domestic packaging does not...

Globalization saint or sinner

Globalization can be viewed as a relentless transition of the economic and political landscape by self-seeking multinationals, who have scant regard for their employees or the environment, together with the connivance of politicians. Alternatively, it is the rising tide of wealth, good fortune and opportunity which causes all our boats to rise. It would appear to be a phenomenon of the 1990s, but it origins go back much further (see Box 10.1). In the last couple of years there has been an...

Constraints on export growth

Exporting companies always find it harder to sell their goods and services abroad when the value of their domestic currency is high. Thus, for the international customer it takes a lot more of their currency to buy a particular good. If the value of the exporter's domestic currency falls, then the good becomes cheaper for the international customer to acquire. In situations where the domestic currency is highly valued, businesses will find goods harder to sell and experience reduced profits....

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Documentary letter of credit

While the documentary bill collection previously discussed provides some degree of security to the buyer and seller an even more secure method is to conduct the transaction by a documentary letter of credit (Appendix III). This document is sent usually via a domestic bank in the exporter's country, and is the means by which the exporter is paid. The documents must be correctly completed and presented to a bank by the expiry date of the credit. If the terms of the credit are met, an exporter can...

References

Aaker, D.A. and Joachimsthaler, E. (1999), The lure of global branding, Harvard Business Review, 77 (6), pp. 137-144. Ackerman, L.D. (1991), Gillette rewriting the rules, Management Review, 80 (9), p. 30. Anholt, S. (1995), Global message, Grocer, 217 (7199),pp. 38-39. Business Week (1999), The beauty of global branding, Business Week, June 28, 3635, p. 70. Cavusgil, S.T. (1988), Unraveling the mystique of export pricing, Business Horizons, May June, pp. 54-63. Clark, T., Kotabe, M. and...

M

Figure 3.5 Elongated and fragmented countries. Source Cole (1979). -' rHint Rt n i i of 0 Jtuia n'eist . *,i quality of products. It is possible to have a composite view of such matters. Each year in my international marketing classes I ask the following questions, try them for yourself. tXLtfCISL .i, YOU'* MENTAi. MAPS I til 111 ' li'lii'W'in)' even i -I' v1 u li ni'l'd Ihnv -'loots nl ,'uini 1 p.i vi On li'n l.rsl-luv. di.n oi .-ur unn immU lol.'o.yi.iiiipu* Mn' .i-iinn. buildings and...

Of contributors

Arnold, School of Business, Queen's University, Kingston, Ontario, Canada Bradley R. Barnes, Leeds University Business School, Leeds, UK Angela Carroll, Huddersfield University Business School, Huddersfield, UK John Fernie, School of Management, Heriot-Watt University, Edinburgh, UK Amjad Hadjikhani. Department of Business Studies. Uppsala University, Uppsala, Sweden Suzanne Home, Department of Marketing, University of Stirling, Stirling, UK Ulf Johansson, Department of Business...

Aria 300 302 303 Arvid Nordqvist 308 309 Asda 293 310 311

ASEAN see Association of Southeast Asian Nations Asia 63, 178,196, 197, 244, 256 BMG case study 289-90 communication styles 63 export processing zones 245 financial crisis 2,18, 20, 21, 23, 28, 41-2 franchising 279 Internet usage 247, 248 sweatshop labour 245, 246 Tesco 7, 8 tiger economies 21, 78, 239 world economy 9,19, 21, 24, 29, 41 Association of Southeast Asian Nations (ASEAN) 17, 29-31, 73 Attitudes 100,117, 118, 176 Austrade 317-19 Australia 28, 29, 52,177, 225 Asian financial crisis...

Country Attractiveness And Competitive Strength

Immature economies while those falling into the 40-54 category are high risk countries. A score of less than 40 suggests that no serious consideration should be given to such a market. A second macro screening technique is the shift-share approach (Green and Allaway, 1985 Papadopoulos and Denis, 1988). Using this technique, the average growth in the rate of imports for a particular product in a group of countries cart be calculated. Each country's actual growth is compared to the average growth...

Endix I Case studies

The case studies in this section are designed to bring to life some of the topics discussed in this book. Case studies help the student to understand the intricacies of particular business situations. They take you from the pure classroom setting to the point of applying your knowledge and understanding within a practical situation. The cases may involve coming to an agreed decision, setting out a plan of action or resolving conflict. There is not always one correct answer but any...

Historical development

The emergence of the modern concept of franchising occurred in the US just after the Civil War with the activities of the Singer Sewing Machine Company (Goncalves and Duarte, 1994). However, it was not until the beginning of the 20th century that this method of business development gained wider acceptance. The automobile industry and the soft drinks industry were the first to adopt the so-called product and trademark franchising. By the 1930s the petroleum industry was franchising gasoline...

Sainsbury 293

Saudi Arabia 25, 34 Scandinavia 49, 247, 305-9 Schenker 202 Schenker-BTL 202 Scholler 306, 307 Scotland 89,113-14,125, 131 Screening markets 146-9 Seagram 242, 243 Sears 311 Segmentation 140,150-3,193,194 Selection of markets 99, 145-50, 153 Shell 60,161 Shift-share approach 147 Shipment of goods 205-6, 207, 213-14 SIA Glass 283, 305-9 Sibley International 277 Silhouette 162 Simple demand guarantee 215 Singapore 2, 20, 29, 56, 73, 271, 289 Singer Sewing Machine Company 262 Skanemejerier 283,...

Sweden

Perceived advantages in logistics can be used as a marketing tool to promote a Figure 8.1 Logistical reach from Sweden in 12 and 24 h. Source Invest in Sweden Agency (http www.isa.se ) Figure 8.1 Logistical reach from Sweden in 12 and 24 h. Source Invest in Sweden Agency (http www.isa.se ) particular location, thus attracting foreign investment and diversifying a regional economy. Sweden is one country which, within its regional setting of northern Europe, is promoting itself as a distribution...

Modes of entry

The firm has a number of choices when it is attempting to evaluate a mode of market entry. It should be remembered that there is no one method which is suitable for all firms under a particular set of circumstances. Instead there are a number of options which companies and the individuals within them have to weigh up under the pertaining market situation. Box 4,5 highlights those favoured by exporters in Canada and Latin America. 4 5 MARKcl SNlllY A LANADA LATll AM Wr.A '.,-.'1 ii ' ' i.miil'--...

Bills of exchange

An exporter can send a bill of exchange (Appendix 111) for the value of the in voice of goods for export, through the banking system for payment by an overseas buyer on presentation. A bill of exchange is legally defined as 'an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to which it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money, to, or to the order of, a specified...

Background

By the end of the 1980s Skanemejerier (from hereon SM) began pondering what strategic direction to take in the new competitive situation that the Swedish dairy market would face after deregulation. They could identify several changes in the competition Aria, both a competitor and partner on the Swedish market, would probably try to expand its interest to the south and large dairy giants like Ml) Foods, situated close-by in Denmark, and large German dairy companies might also want to have a...

Conclusions

Franchising is a system which originated from the US and has since been adopted by other nations around the world, some of which we have discussed in this chapter. It is likely that the franchising concept still has much to offer as a route for international growth. As with any market entry, there are advantages and disadvantages for both the franchisor and the franchisee to be weighed up, but it does seem to be attracting increased attention around the globe. Back in the US, where it all...

Questions for discussion

Globalization is a positive process in the world economy. Discuss and justify your position. 2. What role does marketing play in globalization 3. Multinational companies are getting better at being good global citizens in terms of the environment and employment practices. Discuss and justify your view with examples. 4. What is the current attitude towards globalization of organizations like the World Trade Organization and the IMF 5. What evidence can you find for the existence of pressure...

Introduction

In most developed economies franchising is widely used for operating businesses. It is a system that has enabled business people to develop some of the largest brands around, for example, McDonalds, Dyno-Rod and Holiday Inn. The governments of some developing countries actively encourage business people to use franchising as a way of fostering entrepreneur ship. The franchisor gains national and international distribution for the business idea much more quickly than if the expansion had been...

What has SIA gained from the alliance with Movenpick

SIA has gained access to new products through its co-operation with Movenpick, both on the retailing and the catering market. Within the retailing sector, SIA has an assortment of nine different sorts of 1-1 packages. There are also two variants of ice-lollies, two sorts of ice-cream cups and two multi-packs. To the catering market, not less than 16 different variants is included in their range of products. In total there are roughly 150 different flavours available in the Movenpick collection...

The future

The organization hope to continue with their international expansion and the directors are optimistic about the future. The Chinese-Malaysian student has now completed his course and British Medical are investigating the possibility of employing him on a permanent basis. Export funding and assistance initiatives are also being considered. 1. Evaluate the market entry strategy adopted by British Medical Group. Would any other strategy have been feasible 2. Identify at which stage of the...

Further Reading

Ghosh, S. 1998 , Making business sense of the internet, Harvard Business Review, 76 2 , pp. 126-135. Katsikeas, C.S., Goode, M.M.H. and Katsikea, E. 2000 , Sources of power in international marketing channels, Journal of Marketing Management, 16 1-3 , pp. 185-202. Naumann, E. and Jackson, D.W. 1999 , One more time how do you satisfy customers Business Horizons, 42 3 , pp. 71-76. Smith, A.K., Bolton, R.N. and Wagner, J. 1999 , A model of customer satisfaction with service encounters involving...

Confirming house

A confirming house is effectively an agent for an overseas buyer. The confirming house, acting for the buyer, places an order with an exporter and deals directly with the exporter to complete the contract. In this case there is no international credit risk or financial burden for the exporter, because the confirming house gives short-term credit to the international buyer who pays a commission for the services provided. A specialized form of a confirming house is a buying house, which makes...

Wal Mart organizational culture

The legacy of Wal-Mart founder Sam Walton is a distinct organizational culture the 'Wal-Mart Way' . In this culture, managers practice a form of servant leadership and every employee is known as an 'associate'. Everyone is on a first name basis. Associates are empowered to adapt to local circumstances and are encouraged to try out their own ideas. The culture emphasizes experimentation and trial. Sam Walton's competitive spirit has also been instilled in the associates where there is great...

What has Skanemejerier gained from the alliances

For SM the assortment for the catering market has grown. The company used to sell MD Foods' Danish cheeses at the same time as MD Foods sold SM's dessert cheeses to the retail market in Sweden. After the national cheese federation Riksost was dissolved, it became clear that SM initially had a poorly developed sales organization outside its core market Scania . This, together with the fact that dessert cheeses demands a different sales approach than hard cheeses, made the change a positive one...

BOX 1 7 Three Branrs Unoer Onf RCr

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Customer value management

CVM requires that a company aligns its infrastructure and capabilities to the ideal outcomes which a target set of customers would wish to see. Thus, the customer becomes the firm's design point the company examines every interaction with a customer for its potential to deliver ideal, customer-defined value. It is worth pointing out at this stage that while some proponents of CVM coming from a strategic background may not recognize it this, of course, is the basic essence of running a business...

Market research

Within this context, market research becomes the crucial tool with which to understand the customer. Thus market research has the following goals It helps create accurate judgements It provides an understanding of customers' needs It allows marketers to identify and analyze potential markets It provides an assessment of global demand. The key aims of international market research are to provide reliable information, insight and consistency. These will change little - however, in the future it...

Customer satisfaction

One of the crucial elements of delivering value is customer service, which basically comes down to making sure that each customer has a satisfactory experience with the product or service bought, how it was bought, and with how the product performed after purchase or how the service was delivered. Customer satisfaction is seen as leading to loyal customers, but Dahlhoff 1999 points out that there are a number of misconceptions about what it takes to create a satisfied customer. Firstly, it is...

SMEs key players in a global economy

Ami studyingithis chapter yoi sfwM undef tattd What is meant by the term small and medium sized enterprise SME and how it is defined Their contribution to the global economy The constraints and opportunities which they face The skills and competencies they require to be successful A popular myth is that it is more difficult for small firms to become involved in exporting or international marketing. This is usually based on three interrelated issues Smaller firms have less awareness and...

The role of advertising

Probably the earliest advertising model was based on a hierarchical approach and is attributed to E. St. Elmo Lewis in 1898 Strong, 1925 , namely, Attention gt Interest gt Desire gt Action, otherwise known as the AID A model. Initially this was a model for personal selling, but later became associated with advertising. In a study by Vakratsas and Ambler 1999 in which they attempt to establish the current state of knowledge about how advertising works, they state that advertising is an input for...

Country of origin

The country of origin of a product, which is normally communicated through the phrase 'made in ', is an extrinsic product cue, an intangible product attribute, that is distinct from physical product characteristics or intrinsic attributes, for example, taste, design, performance. As such, a county of origin cue is similar to price, brand name, or warranty, in that none of these bear directly on product performance Peterson and Jolibert, 1995 . This construct is not just important in consumer...

Success and failure in the internationalization process

There is often almost an obsession with trying to know in advance if a venture is going to be successful. Partly the attitude of an individual relates to their own perception of risk. Some decision makers are prepared to jump with only 50 certainty or less, while others are highly risk averse and will only jump when they think they have 95 certainty or more Nothing ventured, nothing gained is not a bad maxim for business. If taking risks is not for you, try a. different career. On the other...

Buyer credit

For larger and more complex contracts, it is often the best course for the finance to be provided in the form of a loan direct to an approved borrower in the country concerned, rather than to the exporter. This borrower does not necessarily have to be the buyer. This can include single project finance and lines of credit. Under single project financing buyer credit financing is provided with support from a guarantee from an export insurance organization, e.g. NCM. A large amount of finance is...

Standardization versus adaptation

A perennial debate since the 1960s within international marketing is the extent to which the same advert can be used around the world without adaptation. In much the same way as the debate has raged in connection with product standardization, so to in relation to communication strategies the lure of a global mix has been courted. The basic argument of supporters of this approach is that a single message with only minor modifications can be used to reach all targeted consumers because they share...

Other elements of the communication mix

Some international firms attempt to standardize their communication mix advertising, sales promotion, packaging in all of the countries where they operate. These firms aim at an international product and company image, based on the standardization of their communication mix, or at transferring their profitable national communication mix to international markets. A standardized mix can increase the contacts with the brand name and the trademark. Advertising standardization has qualities similar...

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Pricing

Pricing has been relatively neglected in terms of academic marketing research. This has been noted by Rao 1984 while Cavusgil 1988 stated that the neglect of international pricing was even more acute. Clark et al. 1999 comment on its continued neglect over the previous 25 years. Pricing is not simply an economic decision, it can also be seen as a marketing tactic, through the use of discounts, special offers and various incentives. It is an important decision for any business because, quite...

Info

High on IDVci in home country, low control b UAI, uncertainty avoidance. NR, not relevant in this case. c PDI, power distance. b UAI, uncertainty avoidance. NR, not relevant in this case. c PDI, power distance. between a low degree of control and a highly individualistic home culture held only for the Body Shop and for Spar Table 3.1 . While the cultural map as developed in this study does not fully explain the internationalization process of the retailers concerned, it does add a further...

Training and support for SMEs

Many OECD countries are changing their industrial policies to support SMEs OECD Observer, 1995 . These policy changes will enable many of them to enhance or develop for the first time their export capability. Assistance is being developed in countries such as Canada, France, Germany, Italy and the UK to train and support SME managers. This includes free or subsidized consultancy services. Another form is the use of 'business angels', senior retired executives who have significant managerial...

Market Attractiveness Competitive Strength Matrix

Competitive Strength Matrix Hollensen

Figure 6.2 The market attractiveness competitive strength matrix. Source Hollensen 1998 . High Competitive strength Low Figure 6.2 The market attractiveness competitive strength matrix. Source Hollensen 1998 . Overall, market screening can be expensive in money and time if data is gathered directly from international markets. The reliability of secondary data can also be dubious, or it may be based on groupings and categories which are not standardized internationally. Often with such a vast...

Legal framework

Legal frameworks vary from nation to nation and this can prevent companies adopting a standardized approach. Comparative advertising is not allowed in some countries, for example, Hong Kong, Korea and Belgium. Even where its use is permitted, the usage can be quite low. Donthu 1998 reports that although the recall of comparative adverts was high, they were not particularly popular with consumers, especially in countries where they are not widely used, for example, Australia, Brazil, France and...

Walters 1997 Global Strategy Segmentation Journal Marketing

Bathie, D. 1998 , Principles of Marketing, Retail Marketing MBA Module 1, Institute for Retail Studies, University of Stirling. Green, R.T. and Allaway, A.W. 1985 , Identification of export opportunities a shift-share approach, Journal of Marketing, 49 1 , pp. 83-88. Hollensen, S. 1998 , Global Marketing a Market-Responsive Approach, Prentice-Hall, London. Hofstede, P., Jan-Benedict E.M. Steenkanmp and Wedel, M. 1999 , International market segmentation based on consumer-product relations,...

The References Of International Marketing

Aaby, N.E. and Slater, S.F. 1989 , Management influences on export performance a review of the empirical literature 1978-88, International Marketing Review, 6 4 , pp. 7-20. Aharoni, Y. 1966 , The Foreign Investment Decision Process, Graduate School of Business Administration, Harvard University, Boston, MA. Barrett, N.I. and Wilkinson, I.F. 1986 , Internationalization behaviour management characteristics of Australian manufacturing firms by level of international development, in Tumbull, P.W....

Get a good guidebook the influence of culture on international marketing

Describe the elements of culture and their influence on international marketing Appreciate the limitations of your own 'world view' Understand how all stages of the marketing cycle have a cultural dimension Consider how best to manage cultural interactions It is people that often make involvement with international marketing exciting but frustrating. A concern for the cultural dimension can evoke extreme reactions, for example, Hanns Johst is quoted to have remarked on one occasion 'Whenever I...