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41 Cards in this Set

  • Front
  • Back
What is the difference between direct and indirect channels of distribution?
Direct channel: deals directly with a foreign firm

Indirect channel: deals with a home-country-based intermediary
What is the difference between an agent and a merchant intermediary?
- Do not take title to the product
- Act on behalf of the manufacturer

Merchant intermediaries:
- Take title to the product
- Act in their own name
What is the main purpose of the Webb-Pomerene Association?
Exempts associations of U.S. firms engaged in export trade from U.S. antitrust laws, so long as they do not restrain any U.S. competitor of the association.
What does a foreign freight forwarder do?
Acts as an exporter's agent for:
- Scheduling
- Routing
- Consolidating shipments
- Preparing documents
- Providing marine and war risks insurance
What are the different roles of an export management company (list six)?
- Conduct marketing research
- Find distributors or agents
- Represent at trade shows
- Handle export documentation
- Handle payment
- Help in promotion
- Handle correspondence
- Handle logistics
- Consult on legal issues
What are two examples of piggybacking?
- Whirlpool uses Sony only in Japan

- Perrier marketed Lindt, the Swiss chocolate, in the U.S.
What are the three types of direct-distribution agent intermediaries?
- Overseas sales representatives
- Overseas purchasing agents
- Export brokers
What are the three types of direct-distribution merchant intermediaries?
- Foreign retailers
- Export distributors
- Trading companies
List the six factors affecting the choice of distribution channels.
- Nature of the product
- Cost
- Investment requirements
- Level of control
- Market coverage
- Continuity
List the five reasons distribution systems can become fragmented.
- Higher transaction costs
- Financing may be necessary
- Narrower assortment
- Limited coverage
- Less effective promotions/product displays
What are four of the major global trends in distribution?
- Increasing size of retailers
- Internationalization
- Growth in discounting
- International franchising
True or false: the United States had a trade DEFICIT in 2006.
- True.
What are the two types of export licenses, and what do they do?
- general license

- validated license
What are the reasons for controlling exports (list six)?
- National security
- Missile technology
- Nuclear nonproliferation
- Chemical & biological weapons
- Anti-terrorism
- Crime control
- Regional stability
- Short supply
- UN sanctions
What does ECCN stand for, and what does it do?
- Export Control Classification Number

- Determines whether a validated license is required.
What is a bill of lading?
- A contract between the owner of the goods and the carrier (as with domestic shipments)
List four examples of export documents.
- Bill of lading
- Shipper's Export Declaration (SED)
- Consular Invoice or Certificate of Origin
- Commercial Invoice
- Insurance Certificate
- Inspection Certificate
List the five main methods of receiving payment in ascending order of risk.
- Cash in advance
- Letter of Credit
- Export Drafts (Bill of Exchange)
- Open Account
- Consignment
Explain the process that occurs in a letter of credit agreement.
1) L/C is opened by a foreign customer at local bank and sent to U.S. bank.

2) L/C is confirmed by U.S. bank and sent to exporter.

3) Exporter approves terms and conditions of L/C and ships goods to the foreign customer.

4) Exporter sends shipping documents to U.S. bank and a draft for payment.

5) U.S. bank examines the documents and if they match terms and conditions of the L/C, the bank pays the exporter for the goods.
What is a duty-free zone?
- Government-owned or closely supervised facilities that permit importation of goods without paying any duties for as long as the goods remain within the zone.
List the five main benefits of using duty-free zones.
- Cash flow management
- Lower insurance cost
- Quota management
- Processing: no taxes on value added
- Re-exporting
List the four methods of countertrade.
- Pure barter
- Switch trading
- Clearing agreement
- Buyback barter
Draw the process of marketing communication.
Source > Coded Message > Medium of transmission > Decoded message > Receiver or audience

< Feedback <

What are the four components of the promotional mix?
- Personal selling
- Public relations
- Sales promotons
- Advertising
What are some of the factors that help to decide whether to use standardization or adaptation (list five)?
- Advertising objectives (eg, AIDA)
- Target market
- Product characteristics
- Media availability
- Availability of advertising agencies
- Cost-benefit relationship
Describe the three main points of the decision-making framework for advertising standardization, explaining each briefly.
1) Identification: Does the target group have unique and measurable characteristics?

2) Response: Will this group respond differently but more favorably than other groups to the adapted promotion?

3) Cost/Benefit Analysis: Will the extra cost associated with adaptation be less than the incremental profit?
What are some examples of short-term promotional efforts directed to the consumer or business customer (list three)?
- Facilitate immediate sale
- Facilitate product trial
- Improve intermediary cooperation
- Introduce product (trade shows)
What are two types of restrictions or constraints placed on international promotion? List and give an example for each.
- Legal restrictions
- Use of premiums

- Cultural constraints
- Use of coupons
- Use of free samples
There are ten commandments for local P&R. List seven of them.
- Provide autonomy in decision-making.
- Retain earning in the host country
- Encourage exports from the host country
- Conduct local R&D
- Use local sources of supply
- Offer equity to the host country investors
- Provide employment at all levels
- Maintain fair prices
- Engage in cause-related marketing
What are the four approaches to setting the promotional budget?
- Objective-and-task: Calculating costs to meet objectives
- Percent-of-sales: Fixed cost based on traditional spending
- Competitive Parity: Matching competitor's spending
- Arbitrary: Setting budget as company executive dictates
What are the three methods for organizing for international promotions?
- Centralized approach
- Decentralized approach
- Coordinated decentralization
What are the three main tasks of personal selling?
- Sales generation: getting new orders from existing and new customers

- sales support: relationship building

- missionary selling: generating goodwill and interest in the product
What are the three sources for recruiting an international sales force?
- Expatriates
- Natives
- Third-country nationals
What are the four stages in cross-cultural negotiations?
- Non-task sounding: relationship building
- Positioning: exchange of information
- Persuasion: the actual negotiation
- Concessions and Agreement
What are the four main pricing factors?
- Experience curve effect
- Competition
- Elasticity of demand
- Government regulations
What is the difference between cost approach and market approach to pricing?
Cost approach takes into consideration only the fixed and variable costs associated with producing the product; market approach takes into consideration the perceived market value of the product.
List the INCOTERMS selected trade terms from origin to destination, with a brief understanding of each.
1) EXW: Origin (factory, mine, warehouse)

2) FCA: Named inland carrier at named inland point of departure

3) FCA: Named inland carrier at named port of exportation

4) FAS: Named port of shipment

5) FOB Vessel: Named port of shipment

6) CFR/CIF: Named port of destination

7) DDU/DDP: Named place of destination
What is the formula for currency appreciation?
R = [(E0-E1)/E0 ] * 100

R = rate of appreciation
E0 = direct quote at time 0
E1 = direct quote at time 1
How can a company deal with price escalation in exporting?
- Lowering the cost of goods
- Lowering tariffs
- Lowering distribution costs
What are the three levels of transfer pricing?
- At manufacturing cost
- At arm's length
- At cost plus
What are two methods of dumping, in terms of pricing?
- Selling below cost of production

- Selling below price in the home market