Ch.8 Importing, Exporting, and Sourcing

What is the difference between export marketing and export selling?

-Export selling basically presents an extension strategy whereby products are offered for sale outside the home country without adaptation. The mindset of export selling is, "Here's the product, take it or leave it." One symptom of export selling would be providing sales literature in the home country language only. -Export marketing, by contrast represents willingness to adapt one or more of the marketing mix elements as required by the characteristics of the target market.

Governments often pursue policies that promote exports while limiting imports. What are some of those policies?

First and foremost, governments can impose duties on imports. In addition, most governments utilize nontariff trade barriers (NTB) that serve as deterrents or obstacles to imports from other countries. NTBS include quotas, discriminatory procurement policies, restrictive customs procedures, arbitrary monetary policies, and restrictive regulations.

Describe the stages a company typically goes through as it learns about exporting.

The chapter outlines seven stages: 1. The firm is unwilling to export. 2. The firm fills unsolicited export orders but does not pursue unsolicited orders. 3. The firm explores the feasibility of exporting. 4. The firm exports to one or more markets on a trial basis. 5. The firm is an experienced exporter to one or more markets. 6. The firm pursues country- or region-focused marketing based on certain criteria (e.g., all countries where English). 7. The firm evaluates global market potential before screening for the "best" target markets to include in its marketing strategy and plan.

How did the current economic crisis affect financing for global trade?

The global financial crisis is undermining the ability of firms of all sizes to get the financing they depend on for trade. Compounding the problem is the fact that the trade fiancé is drying up in key emerging markets.

What are the various types of duties that export marketers should be aware of?

1.Ad valorem duties: a percentage of the customs value of particular goods. For example, China has imposed a 60 percent duty pm 35mm imports; the U.S. imposes a 25 percent duty on light trucks imported from Japan. 2. Specific duties : a specific amount (in the importing country's currency) per some unit of measurement. For example, prior to NAFTA, the specific duty on Mexican tomato imports into the United States was 1.4 cents per pound; after NAFTA passed, the duty was lowered to 1 cent per pound. 3. Antidumping duties: imposed on products from producers that have set export prices at unfairly low prices. Pasta makers in Italy and Turkey were assessed antidumping duties after the International Trade Administration ruled the companies were selling pasta below fair value and injuring American producers. 4. Countervailing duties: designed to offset government subsidies in the exporting country

What is the difference between an L/C and other forms of export-import financing? Why do sellers often require letters of credit in international transactions

A letter of credit (L/C) constitutes an agreement whereby an importer's bank assumes the obligation of payment on behalf of the importer. The seller is assured of payment, because the bank guarantees payment as long as the seller complies with the terms in the L/C. A documentary collection is a negotiable bill of exchange that can be transferred from one party to another. When a bill of exchange is used, banks are involved but do not bear financial risk. Other forms of payment include cash in advance (usually via wire transfer), sales on open account, and sales on a consignment basis.