Post on 10-Apr-2018
transcript
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Sessions By Nidhi Sharma
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` Internal Trade` International Trade` Internal trade is of three types
a) local trade
b) Regional tradec) Interregional trade
International Trade is also of 3 typesa) Import Tradeb) Export Trade
c) Re Export Trade
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` Due to human wants` Factor endowment in various countries
` Technological advancements
` Labour and entrepreneurial skills
` Factors of production differ in different countries
` Difference in prices of goods and services
between countries
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` Because countries have different natural,
human, and capital resources and different ways
of combining these resources, they are not
equally efficient at producing the goods andservices that their residents demand.
` The decision to produce any good or service
has an opportunity cost, which is the amount of
another good or service that might otherwisehave been produced.
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` Given a choice of producing one good or another,
it is more efficient to produce the good with the
lower opportunity cost, using the increased
production of that good to trade for the good withthe higher opportunity cost.
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` When a country can produce more of a good with
the same resources that another country can, it is
said to have an absolute advantage in the
produ
ction of that good.` If the second country has an absolute advantage
in producing a good that the first country wants,
both will be better off if they specialize and trade.
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` Trade is usually beneficial to both countries
even if one has an absolute advantage in the
production of both goods that are to be traded.
` Given any two products, a nation has acomparative advantage in the product with the
lower opportunity cost.
` The terms of trade must be such that both
countries lower the opportunity costs of thegoods they are getting from the trade.
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` Natural Advantages ( can be shared)
` Specialization and division of labor
` Reduces monopolistic exploitation
`
Protects economic interests of a cou
ntry` Optimum exploitation of worlds scarce human
resources
` Economic development
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` Economic self sufficiency
` Economic cooperation and internationalbrotherhood
` Quality of labor and capital
Helps all countries to learn and benefit from each
other in their areas of expertise
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` Results in the depletion of natural resources for
ones own use
` Adversely effects wages
` Import based countries face a threat of being
dominated by other countries if the import supply
is cut off
` It affect the home industries
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` The key word in this marketing definition is "process";marketing involves researching, promoting, selling, anddistributing your products or services
` Marketing is the management process that identifies,
anticipates and satisfies customer requirementsprofitably
` Marketing is the social process by which individuals andgroups obtain what they need and want through creatingand exchanging products and value with others
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` Marketing can be conceived as an integral part of two
processes technical and social
The technical process is same in domestic as well as
international marketing i.e. product, price, cost , Brand
Etc where as
Social Pattern is unique as behaviors patterns , Customs
of society , such as customs, attitudes , values etc differ
in different nations
` International marketing can be defined as marketingcarried on across national boundaries
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` Social Factorsa) National Legal Regimeb) Political Situationsc) Financial System
d) Marketing Infrastructurec) Cultured) Language
Economic Factorsa) Commercial Political variables , tariff quotas, Licensing
, non tariff barriersb) Currency restrictions
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c) Internal demand management policies and instrumentsCompetitions
a) Competition vis-a-vis producers in the importing co
untryb) Competition vis a vis Exporters from the competing
countriesc) Competition vis a vis other exporters form ones own countryLogisticsa) Availability of required type of transport
b) Cost of transportRisksa) Political Risksb) Commercial Risksc) Act ofGod
d) Acts of enemies , pirates , thieves
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The same ad for tooth paste in where a guy and girl
were shown to be affectionate with each other was
successful in USA and did not work well in
Thailand because of the conservative societyprevalent their . When 2 girls did the same ad the
sales picked up
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` Firm Characteristicsa) Product Characteristicsb) Size and growth ofDomestic Marketc) Optimal Scale of Productiond) Potential Export Market
Perceived External Export Stimulia) Future Ordersb) Market Opportunityc) Government stimuli/ Assistance
Perceived internal Export Stimuli ( what are the
management expectations)a) Level of capacity utilization
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b) The highest level of profitc) The growth objective of the firm
Level of organizational Commitmenta) What kind of people available to go on for
international marketing ( resources required tohire new staff) hiring of consultants for carryingout overseas market potential studies
Motivation to exportsa) Relatively profitableb) Insufficiency of domestic demandc) Reducing business risks ( fluctuation in one
country can be countered by another)
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d) Legal Restrictions- Their might be restrictionson certain sectors within our country but we
might find a market for it abroade) Obtaining import inputs- Nations have to payfor imports by doing exports so for a fewindustries might have an obligation to export (which are in need of imports)
f) Social Responsibility-It is considered abusinessman's responsibility to contribute
towards the nation by increasing exportsg) Increased Productivity- Increased productivity
is necessary forultimate survival of the firm.After increased productivity the firm might seek
export markets
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` Technological Improvement ( entry into the foreign
market may enable a firm toa) Pick up new product ideas and add to product
line
b) Improve its products
c) Reduce costs
d) Discover new applications for its products
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` Government restrictions` Complacent and domestic oriented firms
` Lack of coordinated export assistance
` Expenses on exporting
`
Trade barriers` Complications of exporting
` Lack of financial assistance
` Lack of competitiveness
` Lack of export incentives
` Credit risks
` Paper work
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No involvement The firm is not involved inexport market yet the product may enter exportmarket due to
a) foreign buyers coming on her own andpurchasing their requirements]
b) Domestic intermediaries like export housespurchasing their goods and selling themoverseas
Temporary involvement The firm is involved in
export business to dispose of temporary s
urpl
usutilize temporary excess capacity
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` Capacity involvement the firm makes a seriouscommitment to export . IT may demarcate adefinite percentage of capacity for exports. Visit toforeign countries for frequently
` Global Involvement in such a case a firmbecomes a truly international company involvingitself in international operations
How will you
decide abou
tI
nternational bu
sinessa) Do you have management knowledge to operate ininternational market
b) Do you or can you acquire financial resourcesc) Do you want to make a commitment to approach
international markets properly
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` Producing for exports- some industries are just
producing for exports like diamond industry ,
garment industry
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Motivation for internationalMarketing
a) Growthb) Profitabilityc) Risk Spreadd) Excess to import inputsf) Market Opportunitiesg) Spreading the R & D Costs
SWOT Analysis
Decision to enter the InternationalMarket( Continued )
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` International Marketing Decisions
a) Market identification and targeting
b) Entry Mode Selectionc) Product Decision
d) Distribution Channel Decision
e) Market Promotion Decision
Entry international Market
Review Performance
ConsolidateMarketing Efforts to Global Marketing
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` Classification on the basis of stages of demanda) Existing Marketb) latent Market ( hidden)c) Incipient Market ( do not exist in the present)
Classification in the basis of stages of
developmenta) Industrial Economiesb) More developed developing economiesc) Raw material exporting economiesd) Subsistence Economies
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` Industrial Economies - will go for research anddevelopment and production of sophisticated goods alsoenvironmental friendly products
` More developed, developing economies - wouldlike to update technology for current range ofmanufacturing and would like to have joint venture withthe less developed Countries
` Raw Material Exporting Economies- this categoryincludes countries like those in the gulf country these
countries are interested in importing turnkey projectschanges in these countries takes place slowly and levelof sophistication on product required by these countriesis much less
` Subsistence economies - They will need equipment toexploit theiruntapped resources as also infrastructure
facilities will be less ( turnkey projects) Latestdevelopment in technology in production may not havebeen offered by competitors market forIndia
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1 ) Population ( higher the population the bigger themarket) obviously it is necessary to look at
a) Age group and sexb) Social Class
c) Educational Backgroundd) Number of Householde) Geographical Concentration and Difference2) GNP It is the rate of growth as also the standard of
living of its population could provide another basis forclassification of countries, (per capita income might not
be good indicator) as it also depends on whatprogrammers the government are backing
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` Information can be received from various
chambers of commerce , libraries maintained by
foreign embassies in India, United nations publish
detailed international trade statistics which cou
ldhelp the exporter to locate markets of their
products
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` There are 200 countries in the world and it is notpossible to do business in all of these markets so
there are criteria for selection and rejection of
various markets
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` Embargo by GOI if any` Restrictions and prohibitions on exporters of some
commodity` Incompatibility of technical standards may eliminate
some markets` I
n some cases the cost of product adaptation may be sohigh that the exporters may not be able to afford it
` In some cases the importing countries impose embargoor quotas on the imports of some specific products
` Their may be formidable tariff barriers which may makethe product extremely costly for the consumers of the
countries` More strong competition which makes it impossible to
enter the market
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` In some cases the shipping costs may be far too
high
` In case of technically sophisticated products toomuch money may have to be spent on preparing
sales literature and catalogues in many different
languages
` Acute shortage of foreign exchange in importing
countries may lead to uncertainty in payments
` Political relations with India
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` Examination ofIndias export statistics which areofficially published in the Monthly statisticsrelating to Indias Foreign Trade this enableexporters to find out where similar products are
going` Examination of import statistics of selected
importing countries is the next step
` Examination ofIndias Export Statistics andforeign import statistics both may give an idea ofpossible unit valuation
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` Examination of research studies made by Indian institute of foreigntrade , India trade promotion organization and export promotioncouncil these reports contain useful marketing information aboutvarious markets and products covered by them
` In general pays good dividends to talk to some experiencedexporter
` The Economic times and other economic dailies often publishsupplements covering one particular country giving lot of informationuseful to the marketers
` Commercial Banks may also provide a lot of information about thepayment position and exchange control restrictions in variouscountries
` Indias Commercial representatives abroad may help collectinginformation regarding health , sanitary and other regulations likemarketing and labeling requirements and in selection of agents
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` Generalized System of Preferences (GSP) - Under thegeneralized system of preferences , the developedcountries are granting duty free entry or entry atreduced rates to imports coming from developingcountries to take advantage ofGSP exporters mustknow
1) Whether his product is covered by GSP2) The preference margin enjoyed by the product3) Quotas if any4) Procedural formalities to avail himself of the
preferences information from Indian institute of foreign
trade, India trade promotion organization , Ministry ofcommerce and export promotion councils
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` India is also a party to Bangkok Agreement where
developing countries of ESCAP ( Economic and
Social Commission for Asia and the Pacific) are
extending preferences on each other on 93products ( this info can also be got by above
mentioned organizations)
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` Some Countries have established import promotioncenters to promote import from developing countriesand to provide assistance to their exporters
A directory of import promotion offices and similarorganizations has been compiled by international tradecenter such import promotion centers exist in variouscountries
There are various services offered for instancea) Statistical information on markets concernedb) Information on sales opportunities in the market
concernedc) Trade fair exhibition assistanced) List of importers, wholesalers agents and distributorse) Training programmers.
f)Information on training possibility in
university andresearch institutions etc
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` Give assistance to overseas companies seeking a
U.K joint venture partner ( in most cases these
services are provided withou
t any charges)
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` We can also see ifIndia has any particularadvantage in the market
1) Proximity
2) Trade domination by person ofIndian Origin
3) Ethnic Population
4) Existing of Shipping Facilities
5) Political relations
Again a specialist researcher can help ( he canhelp you avail information regarding more then1 country and research which Is relevant )
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` Know first hand information on country like to knowsuitable dates to visit various markets ( in month ofRamzan forGulf Countries and Christmas for EuropeanCountries is not a suitable date to travel)
`
The man visiting must know his prod
uct well
` Some adaptation in food habits is also necessary
` Better to visit the market when the trade fair is on ( tohave an idea of prevailing prices as well as otherinformation also)