International Marketing Quiz 11

An INCOTERM indicating Seller has fulfilled its obligation to deliver when the goods have been placed alongside the vessel on the dock (quay) at the named port of shipment. Buyer bears all costs and risks of loss / damage to the goods from that moment on. Ex Works named place (EXW) Delivered Duty Unpaid... named place of destination (DDU) Free Alongside Ship named port of shipment (FAS)

Free Alongside Ship named port of shipment (FAS)

An INCOTERM meaning the cost, risk and responsibility shift from Seller to Buyer when goods are turned over to a carrier at a specified place. If place is the Seller's site, Buyer must pay the pre-carriage to the main carrier's terminal. Free on Board named place (FOB) Free Carrier (FCA) Free on board (FOB)

Free Carrier (FCA)

An INCOTERM indicating title and responsibility pass to the customer at the named location. Free on Board named place (FOB) Free on board (FOB) Free Carrier (FCA)

Free on Board named place (FOB)

An INCOTERM meaning Seller is required to transport the goods to the named port of export and arrange for export clearance. Risk, cost, and responsibility shift to Buyer when the goods pass over the carrying ship's rail. Free on board (FOB) Free Carrier (FCA) Free on Board named place (FOB)

Free on board (FOB)

A set of international standards for the uniform interpretation of common international trade contract clauses. Anti-dumping Laws INCOTERMS C.O.D

INCOTERMS

An L/C which cannot be amended or canceled without prior mutual consent of all parties to the credit. Letter Of Credit (L/C) Irrevocable Letter of Credit Documents Against Acceptance

Irrevocable Letter of Credit

A commitment, usually by a bank on behalf of a client, to pay a beneficiary a stated amount of money under specified conditions for merchandise or services rendered. Bank (ers) Acceptance Consignment Letter Of Credit (L/C)

Letter Of Credit (L/C)

Competitive or reactive pricing Skimming Pricing Penetration Pricing Market-Point Pricing

Market-Point Pricing

Credit extended that is not supported by a note, mortgage, or other formal written evidence of indebtedness. Bank (ers) Acceptance Letter Of Credit (L/C) Open Account

Open Account

Entering a market with a relatively low price as a means of gaining market share. Market-Point Pricing Skimming Pricing Penetration Pricing

Penetration Pricing

This transportation term means that all charges, including freight, are to be paid by the Shipper. Or, it may mean that only those charges designated as 'prepaid' are to be paid by the Shipper with other charges to be collected from the Receiver. Transfer price Prepaid (PPD) Charges Cost and freight (CFR)

Prepaid (PPD) Charges

A type of L/C bearing the obligation of the issuing bank only, not of any other bank. Transferable Letter of Credit Unconfirmed Letter Of Credit Trade Acceptance

Unconfirmed Letter Of Credit

A draft (or a bill of exchange) accepted by the drawee (acceptor) by putting his signature and 'accepted' on its face. In doing so, he commits himself to pay the bill upon presentation at maturity. Bank (ers) Acceptance Acceptance Letter Of Credit Unconfirmed Letter of Credit

Acceptance Letter Of Credit

This bank is a correspondent of a bank which issues a letter of credit, and, on behalf of the issuing bank, this bank notifies the beneficiary of the terms of the credit, without engagement on its part to pay or guarantee the credit. Collecting Bank Commercial Bank Advising Bank

Advising Bank

Statutes enacted to prevent dumping - offering prices in the overseas market that is lower than that at which a product is sold in its home domestic market. Society for Worldwide Interbank Financial Transactions (SWIFT) Anti-dumping Laws Consignment

Anti-dumping Laws

One who applies to his bank to issue a documentary credit; in the majority of credits issued the applicant is an importer of goods. Free Carrier (FCA) Beneficiary Applicant

Applicant

A time draft drawn on, and accepted by, a bank. They are limited to 6 months in the US. They may be kept to maturity or sold. Bank (ers) Acceptance Time Draft Acceptance Letter Of Credit

Bank (ers) Acceptance

A payee or recipient, usually of money. A party in whose favour a documentary credit is established, usually the exporter. Applicant Beneficiary Free Carrier (FCA)

Beneficiary

Collect on Delivery, a service where the purchase price of a shipment is collected by the carrier upon delivery of the shipment and subsequently paid to the shipper. Society for Worldwide Interbank Financial Transactions (SWIFT) Consignment C.O.D.

C.O.D.

An INCOTERM indicating the Seller delivers the goods to the named carrier but the Seller must also pay the cost of carriage necessary to bring the goods to the named destination. Carriage paid to (CPT) Unconfirmed Letter of Credit Carriage, insurance paid to (CIP)

Carriage paid to (CPT)

An INCOTERM indicating the Seller delivers the goods to the named carrier but the Seller must also pay the cost of carriage necessary to bring the goods to the named destination and minimum insurance against damage or loss in transit. Carriage, insurance paid to (CIP) Carriage paid to (CPT) Unconfirmed Letter of Credit

Carriage, insurance paid to (CIP)

A term used in collections supported by shipping documents which are released to the Buyer only against payment. Same as Documents Against Payment (D/P). Cash in Advance (CIA) Cash Against Documents (CAD) Acceptance Letter Of Credit

Cash Against Documents (CAD)

A credit term where Buyer pays for the merchandise or services in full before shipment or any service benefits can be derived. Cash in Advance (CIA) Cash Against Documents (CAD) Consignment

Cash in Advance (CIA)

A bank involved in the collection process. In this process if presentation is made to the drawee, it also becomes 'the presenting bank'. Advising Bank Collecting Bank Correspondent Bank

Collecting Bank

In the USA, a bank that is authorized to accept demand deposits. It may also receive time deposits, make loans, engage in trust services, issue letters of credit, accept and pay drafts, rent safe deposit boxes and engage in many other similar activities. Collecting Bank Correspondent Bank Commercial Bank

Commercial Bank

A L/C issued by a foreign bank whose validity has been confirmed by a domestic bank. This is in addition to the commitment of the opening bank. Documents Against Acceptance Cash Against Documents (CAD) Confirmed Letter of Credit

Confirmed Letter of Credit

Primarily European entities that use their credit where their client has customers with a high cost of funds or are located in a country with an uncertain credit environment. Confirming house Advising Bank Correspondent Bank

Confirming house

Goods or property sent by the aid of a carrier from one person (the consignor) to another (the consignee). Open Account Bank (ers) Acceptance Consignment

Consignment

A bank that, in its own country, handles the business of a foreign bank. Collecting Bank Correspondent Bank Advising Bank

Correspondent Bank

An INCOTERM indicating the cost of the product and freight is included in the Seller's quoted price to a named destination. All other charges are the Buyer's responsibility. Cost, insurance and freight (CIF) Cost and freight (CFR) Cash Against Documents (CAD)

Cost and freight (CFR)

An INCOTERM indicating the cost of the product, minimum insurance, and freight is included in the Seller's quoted price to a named destination. All other charges are the Buyer's responsibility. Cash Against Documents (CAD) Cost, insurance and freight (CIF) Cost and freight (CFR)

Cost, insurance and freight (CIF)

n INCOTERM indicating the Seller has fulfilled its obligation to deliver when the goods have been made available at the named place in the country of importation. Seller bears most costs and risks involved in bringing the goods thereto. Delivered Duty Unpaid... named place of destination (DDU) Cost, insurance and freight (CIF) Ex Works named place (EXW)

Delivered Duty Unpaid... named place of destination (DDU)

A L/C that requires receipt of specified documents before the transaction can be completed. Documents Against Acceptance Documentary Letter of Credit Documents Against Payment

Documentary Letter of Credit

Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer (or drawee) only upon the buyer's acceptance of the attached draft Documents Against Payment Documents Against Acceptance Documentary Letter of Credit

Documents Against Acceptance

Payment for goods without a guaranteed form of payment in which the documents transferring title to the goods are not given to the buyer until he/she has signed a sight draft. Documents Against Payment Documents Against Acceptance Documentary Letter of Credit

Documents Against Payment

An INCOTERM indicating Seller has fulfilled its obligation to deliver when it has made the goods available at its premises (i.e. works, factory, warehouse, etc.) to Buyer. Seller is not responsible for loading the goods on the provided transport vehicle. Ex Works named place (EXW) Cost, insurance and freight (CIF) Free Alongside Ship named port of shipment (FAS)

Ex Works named place (EXW)

An L/C that can be amended or cancelled at any time by either the originator or the payee. Standby Letter of Credit Letter Of Credit (L/C) Revocable Letter of Credit

Revocable Letter of Credit

A draft that is payable on demand. Time draft Open Account Sight draft

Sight draft

The practice of setting a relatively high price for a product, often for the purpose of increasing margins in markets that are somewhat price inelastic. Penetration Pricing Skimming Pricing Market-Point Pricing

Skimming Pricing

Network through which international banks conduct their financial transactions. Society for Worldwide Interbank Financial Transactions (SWIFT) Open Account Consignment

Society for Worldwide Interbank Financial Transactions (SWIFT)

A L/C which a bank issues on behalf of its customer to serve as a guarantee to the beneficiary of the L/C that the bank's customer will perform a specified contract with the beneficiary. If the customer defaults, the beneficiary may draw funds. Sight draft Time draft Standby Letter of Credit

Standby Letter of Credit

A financial instrument that is payable within a specified time period. Trade Acceptance Bank(ers) Acceptance Time draft

Time draft

A draft drawn by Seller of goods upon Buyer who agrees to pay by signing 'accepted' on the draft. Time draft Sight draft Trade Acceptance

Trade Acceptance

Prices on intracompany sales C.O.D Standby Letter of Credit Transfer price

Transfer price

A Letter of Credit authorizing the beneficiary to transfer the right to receive the proceeds of the letter to another party. Transferable Letter of Credit Unconfirmed Letter Of Credit Standby Letter of Credit

Transferable Letter of Credit