Keywords: MBA of International Trade Management almost free mba's corporate business

MBA of International Trade Management

These are some brief notes on International Trade Management - 1

Dr.  S.  Maurer,  
MBA Professor

Motivating Factors for Product Adaptation Marketers often find thë need for some changes to be obvious while other changes may require in-depth analysis of societal customs and cultures,  the local economy,  technological sophistication of people living in the country,  customers’ purchasing power and purchase behavior.

Once the letter of credit is received,  the beneficiary would approach their bank with the original letter of credit in hand and ask that a specific value of the original letter of credit be assigned to the supplier.  For example,  if the LC was issued for $45,000,  the request for the assignment might be $30,000?

Studies reveal that enterprises willing to invest,  to innovate and design their products for a specific export market are most likely to succeed.

In Intech,  Inc.  v.  Consolidated Freightways,  Inc.,  836 F.2d 672 [1st Cir.  1987],  the carrier had transported a machine and its accessories in two containers from California to Acton,  Massachusetts.  Upon arrival of the first container at the consignee’s facility,  there was a dispute as to who was responsible to unload the machine.  The container sat there for some six months before C.F.  finally came back and removed it.  Damage was discovered five months later,  when the consignee went to inspect the machine at C.F.’s yard.

Delivery is the placement of the vehicle in a position for unloading.

Delivery of a rail car is normally affected when the car is placed on a team track or spotted.  Republic Carloading & Distribution Co.  v.  Missouri Pacific R.R.  Co.,  302 F.2d 381,  386 [8th Cir.  1962].

A world of opportunity awaits outside the U.S.  borders.  Despite calls for protectionism by a number of business and government leaders,  trade agreements and the reconfiguration of nations are creating a global marketplace that offers new horizons for enterprises willing to venture out.

Product adaptations may even include changes in one or more combinations of brand name,  color,  size,  taste,  design,  style,  features,  materials,  warranties,  after sale service,  technological sophistication and performance.

Legal,  economic,  political,  technological,  and climatic requirements of a country market often dictate some level of localization or adaptation.

If the bank doesn’t hear from the beneficiary during the stipulated timeframe,  it will automatically assume the beneficiary has agreed to the amendment.  From the issuing bank’s perspective,  this arrangement is nice and tidy,  as they can adjust their customer’s liability for the LC at the end of the timeframe without having to do any follow up if they haven’t heard from the beneficiary.

A manufacturer of laser transmission systems,  the enterprise has to alter each system it sells to meet the specific product standards of its client countries.  So does Cenogenics Corp.,  a New Jersey manufacturer of medical diagnostic kits.  Not only has the firm become adept at changing its products to suit local needs,  but it has also had to change its packaging.

'Made in America' is still a high-powered statement.  And the low value of the U.S.  dollar means that our goods are currently so cheap,  we have an even greater competitive edge.

Companies in lesser developed countries that have achieved local success may find it necessary to adopt an “up-market strategy” whereby the product may have to be designed to meet world class standards.

Distributors purchase goods at a significant discount,  acquire title and then market the product.  Sales representatives,  don't purchase goods but instead place orders for them.

We have the supplier sitting back patiently waiting for payment.  After two or three weeks,  they may contact the bank asking about the status of payment against the assignment only to hear that documents have yet to be presented against the letter of credit.  The supplier will be referred to the line in the assignment of proceeds that payment will be made to them if and when payment under the letter of credit is made.

These are some brief notes on International Trade Management - 2

Dr.  S.  Maurer,  
MBA Professor

If you choose to sell your commodity directly,  you can markët your goods through direct mail,  advertising and promotions in magazines with overseas circulation as well as in local publications and other media.

American enterprises are more sophisticated and much more capable in many dimensions,  including marketing techniques,  technology,  experience and access to a lot of high quality products.

The way you market your product in the United States can provide helpful clues for developing methods of selling it internationally.

Distributors purchase goods at a significant discount,  acquire title and then market the product.  Sales representatives,  don't purchase goods but instead place orders for them.

Similar to domestic expansion,  moving into international markets requires capital.  You need funds for inventory,  receivables and promotion activities.  In addition,  if you intend to open foreign branch offices,  you'll need cash for facilities and related operating expenses.

Levels of expectation for product warranties vary from country to country depending on its level of development,  competitive practices,  and the activism of consumer groups,  local standards of production quality,  and differing usage frequency and patterns.

Some export programs are tied into state or local economic development funds; while others have special funding sources dedicated to supporting exports.  All of the existing programs are designed to streamline access to available funds,  to support programs of federal agencies,  or both.

Buyer preferences in a foreign market may also lead an exporter based in more advanced countries to modify its product.

The greater the cultural differences between the two target markets the greater the need for adaptation.

Because of the warming of relations with the West,  the Vietnamese market is opening up.  Many of the Vietnamese living here have strong links with family and friends still living in their native country.  The same is true of the Hispanic population.  Owners of small businesses should be looking at an Hispanic workforce as a strategic opportunity.

The case of PolyGram Group Distribution,  Inc.  v.  Transus,  Inc.,  990 F.Supp.  1454 [N.D.  Ga.  1997] involved a mis-delivery of some 67 cartons of sound recordings intended for a new Media Play store in Gainesville,  Florida.  The shipment was supposed to be sent to a distribution center in Minneapolis.  However,  PolyGram instructed the carrier to deliver to a new store that was still under construction and had not yet opened for business.  The carrier delivered the shipment to the site and apparently obtained the signature of one of the construction workers.  it was later discovered that most of the cartons had disappeared.

The great complaint of most exporters is distributors who are poised to hop aboard the fastest train and move whatever product is currently hot

However,  the savviest exporters manage to make the relationship work.

Some exporters believe the domestic product can be exported without significant changes.  Others seek to consciously develop uniform products [global product design strategy] that are acceptable in all markets with little or mo modification.

You need to weigh many of the same factors you would when pricing for domestic markets,  such as the costs of production,  packaging,  transportation and handling as well as promotion and selling expenses.

Size of packaging,  material used in packaging,  before and after sale service and warranties may have to be adapted in view of the scope and level of service provided by the distribution structure in the country markets targeted.  In the event post sale servicing facilities are conspicuous by their absence,  enterprises may need to offer simpler,  more robust products in overseas markets to reduce the need for maintenance and repairs.

These are some brief notes on International Trade Management - 3

Dr.  S.  Maurer,  
MBA Professor

Industry trade associations are also useful,  as arë private consulting firms [such as Terence Barber's BHP Associates] and the business departments located within major universities.

Once the endorsement is taken care of,  the bank will issue a document or letter titled Assignment of Proceeds addressed,  in this case,  to the supplier.  The content of this document will indicate that an assignment of proceeds has been made in their favor with a stated value.  it will also indicate that if and when payment is made under the letter of credit,  payment will automatically be made under the assignment.

Motivating Factors for Product Adaptation Marketers often find the need for some changes to be obvious while other changes may require in-depth analysis of societal customs and cultures,  the local economy,  technological sophistication of people living in the country,  customers’ purchasing power and purchase behavior.

A manufacturer of laser transmission systems,  the enterprise has to alter each system it sells to meet the specific product standards of its client countries.  So does Cenogenics Corp.,  a New Jersey manufacturer of medical diagnostic kits.  Not only has the firm become adept at changing its products to suit local needs,  but it has also had to change its packaging.

The question of how you will sell,  deliver and service your product abroad is far more important than you may realize.  In answering this question,  the first decision you will want to address is method of distribution.

The level of income,  the level of education,  and the availability of energy are all factors that help predict the acceptance of a product in a foreign market.

The court also reversed the lower court’s finding that O’Hare Services and Channel Distribution were not liable,  and remanded the matter back for further proceedings to determine if they could be liable under Illinois law as bailees,  since there was evidence of very lax security precautions.

When analyzing the need for adaptation or determining the extent to which adaptation may be necessary,  a close look at cultural differences between the target customers in home [country of origin] and those in the host country is extremely important.

If the consignee is to unload the trailer,  this is customary when deliveries are to be made after normal business hours when no employee of the consignee is on duty.  If,  however,  there is a watchman or guard on duty with authority to sign for deliveries,  the carrier should obtain that person’s signature to prove delivery.

Market-driven thinking is sweeping the globe.  People don't talk of countries anymore, notes Dr.  N.E.  Okeke,  former president of the Nigerian Chamber of Commerce and manufacturer.  They talk of markets.

The great complaint of most exporters is distributors who are poised to hop aboard the fastest train and move whatever product is currently hot

However,  the savviest exporters manage to make the relationship work.

Working with distributors or representatives can offer distinct advantages.  These individuals can often provide the initial contacts you need in a foreign country.  They have already established relationships with buyers of related items and know the local market,  which is important in any sales effort.

Most owners of small businesses venturing overseas often don't have the extra capital they need and must turn to outside financing sources.  In recognition of the importance of exporting building at all governmental levels,  new sources of funding are springing up.

When potential customers have limited purchasing power,  the exporter may actually need to develop an entirely new product [innovation] designed to address the market opportunity at a price point that is within the reach of a potential target market.

In a survey of 328 of the U.S.'s fastest growing enterprises,  globally focused enterprises anticipated 1992 growth rates of 26.4 percent compared to 22.5 percent for firms that aren't involved in selling internationally.

These are some brief notes on International Trade Management - 4

Dr.  S.  Maurer,  
MBA Professor

Many kinds of equipment must be ëngineered in the metric system for integration with other pieces of equipment or for compliance with the standards of a given country.

Strong warranties may be required to break into a new market,  especially if the enterprise is an unknown supplier.  In other cases warranties similar to those in the home country market may not be expected.

Engineering changes needed: Environmental Requirements—Combustion engines,  for example,  may be required to use unleaded fuel only.

The buyer,  not knowing that an assignment of proceeds has been issued,  may be thrilled at the prospect of not having to pay their bank an examination fee under the LC and embrace the open account proposal.

Once the endorsement is taken care of,  the bank will issue a document or letter titled Assignment of Proceeds addressed,  in this case,  to the supplier.  The content of this document will indicate that an assignment of proceeds has been made in their favor with a stated value.  it will also indicate that if and when payment is made under the letter of credit,  payment will automatically be made under the assignment.

Language,  legal and cultural differences may require you to consider the need for product changes.  Such changes may include product design,  branding,  labeling,  packaging and service arrangements.

Because of the warming of relations with the West,  the Vietnamese market is opening up.  Many of the Vietnamese living here have strong links with family and friends still living in their native country.  The same is true of the Hispanic population.  Owners of small businesses should be looking at an Hispanic workforce as a strategic opportunity.

An important component in making your export commitment is figuring out whether you have anything an international market would want to buy.

Your bank can also be an excellent resource if you choose one that has an international department and is committed to serving small business.  Such an institution can help you with all aspects of an export transaction and introduce you to the federal and state government export financing programs that actively support small firms.  State governments are another prime source of assistance.

Industry trade associations are also useful,  as are private consulting firms [such as Terence Barber's BHP Associates] and the business departments located within major universities.

To make purchases of mass marketed consumer products more affordable in lesser developed country,  makers of products such as razor blades,  cigarettes,  chewing gum,  ball point pens and candy bars have been known to have repackaged them in small single units rather than multiple units prevalent in the developed and more advanced economies.

Well-drafted cover letters and informative,  well-designed product and enterprise brochures can be very effective in getting started in a targeted segment of an overseas market.  However,  given the cost of foreign mailings,  be conscious of the weight of your direct mail package.

If you choose to sell your commodity directly,  you can market your goods through direct mail,  advertising and promotions in magazines with overseas circulation as well as in local publications and other media.

Legal,  economic,  political,  technological,  and climatic requirements of a country market often dictate some level of localization or adaptation.

After determining that your product is highly exportable,  you need to identify your potential customers.  The best way to do this is through market research.