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78 Cards in this Set
- Front
- Back
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Direct Exporting
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The company sells to a customer in another country. This method is the most common approach employed by companies taking their first international step because the risks of financial loss can be minimized
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Indirect Exporting
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The company sells to a buyer (importer or distributor) in the home country, which in turn exports the product. Customers include large retailers such as Wal-Mart or Sears, wholesale supply houses, trading companies, and others that buy to supply customers abroad
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Licensing
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A means of establishing a foothold in foreign markets without large capital outlays. Patent rights, trademark rights, and the rights to use technological processes are granted in foreign licensing
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Franchising
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A rapidly growing form of licensing in which the franchiser provides a standard package of products, systems, and management services, and the franchisee provides market knowledge, capital and personal involvement in management. This permits flexibility in dealing with local market conditions and yet provides the parent firm with a reasonable degree of control
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Joint Venture
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A partnership of two or more participating companies that have joined forces to create a separate legal entity. They are 1) Established, separate, legal entities; 2) Acknowledge intent by the partners to share in the management of the JV; 3) Partnerships between legally incorporated entities such as companies, chartered organizations, or governments, and not between individuals; 4) Equity positions are held by each of the partners
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SIA
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Strategic International Alliance, established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective. Used to shore up weaknesses and increase competitive strengths.
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Global Market Concept
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A perspective encompassing an entire set of country markets as a unit, identifying groups of prospective buyers with similar needs as a global market segment and developing a market plan that strives for standardization wherever it is cost efficient and culturally effective
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Product Diffusion
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Process in which product innovation spreads, success depends on the product information and attributes
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Global Brand
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Worldwide use of names, terms, signs or symbols; differentiates from competitors
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Quality
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Essential character of something. Can be seen as market perceived quality or performance quality
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Homologation
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Changes in a product that is mandated by local standards for product and service quality
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Innovation
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Idea perceived by a group of people, when applied to a product, it can change the consumer perception
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Green Marketing
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Consideration and concern of environmental consequences of product formulation, marketing, manufacturing, packaging
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ISO 9000
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International industrial standards, meets quality assurances in purchasing agreements
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ISO 14000
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Standards that monitor a company on how much their operation affect the environment
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Derived Demand
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Demand that's dependent on another source, key success factor to selling capital equipment and big-ticket industrial services
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Dealer
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Middlemen selling goods to the customers, usually the last step in the distribution channel
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Relationship Marketing
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Marketing products that depend on long term associations with the customers. An aspect like culture where personal ties are needed for a business connection
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Jobber
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Middleman in the fueling industry
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Facilitating Agency
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Organizations that assist in international transactions with knowledge of the local markets
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Export Trading Company
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Accumulate, transport, and distribute goods from many countries
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Agent Middlemen
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Work on commissions and arrange sales in a foreign country but they do not take title to the merchandise
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Merchant Middlemen
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Unlike the agent middlemen, these middlemen take title to the goods. Due to this, they tend to be less controllable
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Large-scale Retail Store Location Act
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Law that protects small retail stores from large intruders into their markets
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Trading Company
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Accumulates, transports and distributes goods from many countries; an important intermediary in the development of trade between nations
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CCL
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Commerce Control List; A directory organized by a series of Export Control Classification Numbers that indicates U.S. rules for the exportability of items. Exporters must use the list to determine if there are end-use restrictions on certain items, such as uses in nuclear, chemical and biological weapons, and determine if a product has a dual use--that is, both in commercial and restricted applications
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Complementary Marketing
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The process by which companies with excess marketing capacity in different countries or with a desire for a broader product line take on additional lines for international distribution; commonly called piggybacking
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ECCN
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Export Control Classification Number; Under the provisions of the U.S. Export Administration Regulations a classification number that a U.S. exporter must select for an item to be exported; the number corresponds to a description in the Commerce Control List, which indicates the exportability of the item
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CCC
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Commerce Country Chart; A directory of information that a U.S. exporter needs to consult, along with the Commerce Control List, to determine if the exporter needs a license to export or re-export a product to a particular destination
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EAR
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Export Administration Regulations; A set of rules issued by the U.S. Department of Commerce, designed to alleviate many of the problems and confusions of exporting; they are intended to speed up the process of granting export licenses by concentrating license control on a list of specific items, most of which involve national security. Exporters must ensure that their trade activities do not violate the provisions of EAR
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Consular Invoice
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A variety of export document required by some countries along with two to eight copies in the language of the country, along with copies of other required documents before certification is granted. Preparation of the document should be handled with extreme care because fines are levied for any errors uncovered. In most countries, the fine is shared with whomever finds the errors, so few errors go undetected
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Letter of Credit
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Payment arrangement that shifts the buyer's credit risk to the bank issuing the letter of credit. When a letter of credit is employed, the seller ordinarily can draw a draft against the bank issuing the credit and receive dollars by presenting proper shipping documents. Except for cash in advance, letters of credit afford the greatest degree of protection for the seller
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Bill of Exchange
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Form of international commercial payment drawn by sellers on foreign buyers. The credit of one or more banks is involved, but the seller assumes all risk until the actual dollars are received
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24-hour Rule
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(CSI) Requires sea carriers and NVOCC to provide U.S. Customs with detailed descriptions of the contents of containers bound for the United States 24 hours before a container is loaded on board a vessel. Allows U.S. Customs officers time to analyze the contents of the container or truck and identify potential terrorist threats before a U.S.-bound shipment is loaded at a foreign port rather than after it arrives at a U.S port
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C-TPAT
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Customs-Trade Partnership against Terrorism; A joint initiative between government and business designed to augment the 24-hour rule by extending security procedures throughout the supply chain
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CSI
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Cargo and Container Security Initiative; One of the U.S. government's first efforts to enhance post 9/11 security. Requires sea carriers and Non-Vessel Operating Common Carriers to provide U.S. Customs with detailed descriptions of the contents of containers bound for the United States 24 hours before a container is loaded on board a vessel
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RFID
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Radio Frequency Identification; Form of electronic container tracking used to strengthen border protection. Can monitor containers for tampering from the point of origin, and provide a record of events while in transit
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Bill of Lading
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The most important document required for establishing legal ownership and facilitating financial transactions. It serves the following purposes: 1) as a contract for shipment between the carrier and shipper, 2) as a receipt from the carrier for shipment 3) as a certificate of ownership or title to the goods
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Commercial Invoice
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Every international transaction requires a commercial invoice, that is, a bill or statement for the goods sold. This document often serves several purposes; some countries require a copy for customs clearance, and it is one of the financial documents required in international commercial payments
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Foreign-trade Zone
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Goods subject to U.S. customs duties and quota restrictions can be landed in these zones for storage or such processing as repackaging, cleaning and grading before being brought into the United States or re-exported to another country.
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Maquiladora
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Special type of customs-privileged facility that originated in Mexico in the early 1970s. In 1971 the Mexican and U.S. governments established an in-bond program that created a favorable opportunity for U.S. companies to use low-cost Mexican labor. The Mexican government allows U.S. processing, packaging, assembling, and/or repair plants located in the in-bond area to import parts and processed materials without import taxes, provided in the finished products are re-exported to the U.S. or to another foreign country
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Export Control
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Designed to conserve scarce goods for home consumption or to control the flow of strategic goods to actual or potential enemies
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Customs-privileged Facilities
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Areas within a country where goods can be imported for storage and/or processing with tariffs and quota limits postponed until the products reach the designated areas. Examples are foreign (free) trade zones, free ports, and in-bond arrangements
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Forfaiting
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The seller makes a one-time arrangement with a bank or other financial institution to take over responsibility for collecting the accountreceivable. The exporter offers a long financing term to its buyer but intends to sell its account receivable, at a discount, for immediate cash. The forfaiter buys the debt, typically a promissory note or bill of exchange, on a nonrecourse basis. Once the exporter sells the paper, the forfaiter also assumes any political risk present in the importer's country
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SNAP
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Simplified Network Application Process; an alternative to paper license submissions, enables an exporter to submit export and re-export applications, high-performance computer notices, and commodity classification requests via the Internet
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ELAIN
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Export License Application and Information Network; enables exporters that have authorization to submit license applications via the Internet for all commodities except supercomputers to all free-world destinations. When approved, licensing decisions are conveyed back to the exporters via the Internet
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STELA
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System for Tracking Export License Applications; an automated voice-response system for tracking applications, can be accessed using a touch-tone phone. It provides applicants with the status of their license and classification applications and is available 24 hours a day, seven days a week. Can give exporters authority to ship their goods for those licenses approved without conditions
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Personal Selling
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Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale"
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Public Relations
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The effort made by companies to create positive relationship with popular press and general media and to communicate messages to their publics, including customers, the general public, and government regulators
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Noise
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The term for impairment to communication process comprising external influences such as competitive advertising, other sales personnel, and confusion at the "receiving end." Noise can disrupt any step of the communications and is frequently beyond the control of the sender or receiver
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Sales Promotion
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Marketing activity that stimulates consumer purchases and improves retailer or middlemen effectiveness and cooperation
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Market Segment
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A market segmentation of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. A true market segment meets all of the following criteria: it is distinct from other segments, it is homogeneous within the segment; it responds similarly to a market stimulus, and it can be reached by a market intervention
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Expatriate
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A person living away from his or her own country. In international sales, expatriates from the selling company's home country may be the best choice for the sales force when products are highly technical or when selling requires an extensive knowledge of the company and its product line
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TCN
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Third Country Nationals; expatriates from one country working for a foreign company in a third country
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Local Nationals
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Persons living in their home country; historically the persons preferred by expatriate managers to form the sales force. Local nationals are more knowledgeable about a country's business structure than an expatriate would be, and they are generally less expensive to maintain
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Repatriation
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The process of expatriates returning from abroad to home. This process is often difficult, since standard of expatriates abroad is higher than on return. Help stronger repatriation: 1) Commit to reassigning expatriates to meaningful positions 2) Create a mentor program 3) Offer a written job guarantee 4) Keep expatriates in touch with headquarters 5) Prep the expatriate/family for repatriation
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Dumping
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An export practice, generally prohibited by laws and subject to penalties and fines, defined by some as the selling of products in foreign markets below the cost of production and by others as the selling of products below the prices of the same good in the home markets
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Separation Allowance
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Payment of overseas premiums to employees who take on short-term foreign assignments and travel without their families; allowance generally compensates for all excess expenses and any tax differential
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Parallel Imports
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International transactions in which importers buy products from distributors in one country and sell them in another to distributors that are not part of the manufacturer's regular distributions system
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Exclusive Distribution
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A practice in which a company restricts which retailers can carry its product; often used by companies to maintain high retail margins, to maintain the exclusive-quality image of a product, and to encourage retailers to provide extra services to customers
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Countertrade
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A type of transaction in which goods are imported and sold by a company from a country in exchange for the right or ability to manufacture/sell goods in that country. Countertrade can substitute for cash entirely or partially and is used extensively in trade between U.S. firms and the former Soviet bloc, along with other emerging markets
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Administered Pricing
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The attempt to establish prices for an entire market through cooperation of competitors, through national, state or local governments, or by international agreement. Its legality differs from country to country and from time to time
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Variable-cost Pricing
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A method of pricing goods in foreign markets in which a company is concerned only with the marginal or incremental costs of producing goods for sale in those markets. Firms using variable cost pricing take the view that foreign sales are bonus sales
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Full-cost Pricing
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A method of pricing based on the view that no unit of a similar product is different from any other unit of a similar product and that each unit must bear its full share of total fixed and variable cost, whether sold in the home market or abroad
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Skimming
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A method of pricing, generally used for foreign markets, in which a company seeks to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received; may be used to sell a new or innovative product to maximize profits until a competitor forces lower prices
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Price Escalation
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The pricing disparity in which goods are priced higher in a foreign market than in the home market; caused by added costs involved in exporting products from one country to another
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Barter
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The direct exchange of goods between two parties in a transaction
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Countervailing Duty
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A fee that may be imposed on foreign goods benefiting from subsidies, whether in production, export, or transportation; may be applied in conjunction with minimum access volume, which restricts the amount of goods a country will import
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Subsidy
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A form of financial assistance paid to a business or economic sector. A subsidy can be used to support businesses that might otherwise fail, or to encourage activities that would otherwise not take place
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Compensation Deal
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Transactions that involve payment in both goods and cash
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Cartel
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An arrangement in which various companies producing similar products or services work together to control market for the goods and series they produce
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Counterpurchase
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A type of countertrade in which a seller receives payment in cash but agrees in a contract to buy goods from the buyer for the total monetary amount involved in the first transaction or for a set percentage of that amount
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Transfer Price
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The pricing of goods transferred from a company operations or sales units in one country to its units elsewhere. In transfer pricing, prices may be adjusted to enhance the ultimate profit of the company as a whole
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Advanced Pricing Agreement
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Agreement made between a company and the IRS covering transfer pricing methods used by the company. Without such an agreement, if the IRS charges the company with underreporting income through its transactions affiliate, the burden of proof that a transfer price was fair rests with the company
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Buyback Agreement
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An agreement between a buyer of goods, a seller of goods and a bank that is financing the purchase of the goods. The seller agrees to buy back the goods from the bank at the end of the term of the financing
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ERIC
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Electronic Request for Item Classification; a supplementary service to ELAIN, allows an exporter to submit commodity classification requests via the Internet to the Bureau of Export administration
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IMC
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Integrated Marketing Communications; the collective arrangement of efforts and methods to sell a product or service, including advertising, sales promotions, trade shows, personal selling, direct selling, and public relations
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Advertising
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One-way persuasive communication from a producer to a consumer
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