Characteristic of the environment of the

international marketing.

International Commercial Terms (INCOTERMS)

The INCOTERMS (International Commercial Terms) is a universally recognized set of

definitions of international trade terms, such as FOB, CFR and CIF, developed by the

International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract

responsibilities and liabilities between buyer and seller.

INCOTERMS

Incoterms consist of 4 groups (E,F,C,D) and are listed below in

order of increasing risk/liability to the exporter. Some Incoterms only

apply to ocean/inland, not air, transportation modes.

INCOTERMS

• EXW - Ex Works -- The only Incoterm in Group E, represents the minimum liability to the seller. Risk and expenses are borne by the buyer, including payment of all transportation and insurance costs from the seller's door.

• GROUP “F” - Seller pays for pre-carriage at origin but does not pay for main carriage.

• GROUP “C” - Seller arranges and pays for main carriage but does not assume risk.

• GROUP “D” - Seller assumes the most cost/risk because goods must be made available upon arrival at agreed destination.

Looking at the Global MarketingEnvironment

The International Trade System

The World Trade Organization and GATT

Regional Free Trade Zones

WTO

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments.

WTO

The General Agreement, on Tariffs and Trade

The General Agreement on Tariffs and Trade (GATT) is an international treaty designed to promote world trade by reducing tariffs and

other international trade barriers. There have been eight rounds of GATT talks since its

inception in 1948, in which member nations reassess trade barriers and set new rules for

international trade.

Regional Free-Trade Zones

The European UnionEFTAAFTANAFTAANDEAN PACTSADCSAARCAPACMERCOSURUEMOA

Economic Environmental Factors

Country’sIndustrialStructure

IndustrializingEconomies

IndustrialEconomies

SubsistenceEconomiesRaw Material

ExportingEconomies

Political-Legal Environmental Factors

Attitudes Toward

InternationalBuying

GovernmentBureaucracy

Monetary and non-monetaryRegulations

PoliticalStability

Monetary and non-monetary regulation

Tariff – is a tax levied by a government against certain imported products. Tariffs are designed to raise revenue or to protect domestic firms.

Quota – is a limit on the amount of goods that an importing country will accept in certain product categories; it is designed to conserve on foreign exchange and to protect local industry and employment.

Monetary and non-monetary regulation

Embargo – is a ban on the import of a certain product.

Exchange controls – are government limits on the amount of its country foreign exchange smith other countries and on its exchange rate against other currencies.Non-tariff trade barriers – is non-monetary barriers to foreign products, such UK biases against a foreign company's bind or product standards that go against foreign company's product features.

Cultural Environmental FactorsHow

CustomersThink About

andUse

Products

BehaviorBusinessNorms

and

CulturalTraditions,Preference

s,and

Behaviors

Deciding which Markets to Enter

Indicators of market potential1. Demographic characteristics Size of population Rate of population growth Degree of urbanization Population density Age structure and composition of the population2. Geographic characteristics Physical size of a country Topographical characteristics Climate conditions3. Economic factors GNF per capita Income distribution Rate of growth of GNP Ratio of investment to GNP

Establishing Market Entry Mode

Direct investment – is an entering a foreign market by developing foreign-

based assembly or manufacturing facilities.

Establishing Market Entry Mode

Establishing Market Entry Mode

Exporting – is a faltering a foreign market by sanding products and selling them through

international marketing intermediaries (indirect exporting) or through the company's

own department, branch, or safes representatives or agents (direct exporting).

Indirect ExportingDirect Exporting

Joint venturing – is an entering foreign, markets by joining with foreign

companies to produce or market a product or service.

Establishing Market Entry Mode

Licensing – is a method of entering a foreign market in 'which the company

enters into an agreement with a licensee in the foreign market, offering the right

to use a manufacturing process, trademark, patent, trade secret or other

item of-value for a fee or royally.

Establishing Market Entry Mode

Contract manufacturing – is a joint venture in which a company contracts

with manufacturers in a foreign market to produce the product.

Establishing Market Entry Mode

Management contracting – is a joint venture in which the domestic firm

supplies the management know-how to a foreign company that supplies the capital; the domestic firm exports management services rather than

products.

Establishing Market Entry Mode

Joint ownership – is a joint venture in 'which a company joins investors in a

foreign market to create a local business in which the company shares joint

ownership and control.

Establishing Market Entry Mode

Deciding on the Global Marketing Program

Five International Product and Promotion Strategies

Straight product extension means marketing a product in a foreign market without any change.

Product adaptation involves changing the product to meet local conditions or wants.

Product invention – is creating new products or services for foreign markets.Product invention consists of creating something new for the foreign market.This strategy can take two forms, it might mean re Intro dueling earlier product forms that happen to be well adapted to the needs of a given country.Or a company might create a new product 10 meet a need in another country.

Deciding on the Global Marketing Program

Communication adaptation – is a global communication strategy of fully adapting advertising messages to local markets.

Companies adopt a dual adaptation strategy when both the product and communication messages have to be modified to meet the needs and expectations of target customers in different country markets.

Deciding on the Global Marketing Program

Distribution Channels

Deciding on the Global MarketingOrganization

Export department is an arm of international marketing organization that comprises a sales manager and a few assistants is to organize the shipping out of the company's goods 10 foreign markets.

International division – is a form of international marketing organization in which tin: division handles alt of the firm's international activities. Marketing, manufacturing, research, planning and specialist staff are organised into operating units according to geography or product groups, or as an international subsidiary' responsible for its own sales and profitability.

Global organization - affirm of international organization whereby top corporate management and staff plan worldwide manufacturing or operational facilities, marketing policies, financial flatus and logistical systems. The global operating unit reports directly to the chief' executive, not to an international divisional head.

Deciding on Global Marketing Organization

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