Incoterm

Incoterms or international commerce terms are a series of international sales terms,

published by International Chamber of Commerce (ICC) and widely used in international
commercial transactions. These are accepted by governments, legal authorities and
practitioners worldwide for the interpretation of most commonly used terms in
international trade. This reduces or remove altogether uncertainties arising from different
interpretation of such terms in different countries. Scope of this is limited to matters
relating to right and obligations of the parties to the contract of sale with respect to the
delivery of goods sold. They are used to divide transaction costs and responsibilities
between buyer and seller and reflect state-of-the-art transportation practices. They closely
correspond to the U.N. Convention on Contracts for the International Sale of Goods. The
first version was introduced in 1936 and the present dates from 2000.

Objectives
Incoterms are internationally accepted commercial terms, developed in 1936 by the
International Chamber of Commerce (ICC) in Paris. Incoterms 2000 define the respective roles
of the buyer and seller in the agreement of transportation and other responsibilities and clarify
when the ownership of the merchandise takes place. These terms are incorporated into exportimport sales agreements and contracts worldwide and are a necessary part of foreign trade.
Incoterms are used in union with a sales agreement or other methods of sales transactions and
define the responsibilities and obligations of both, the exporter and importer in Foreign Trade
Transactions.
The main objectives of Incoterms 2000 revolve around the contract of Foreign Trade concerned
with the loading, transport, insurance and delivery transactions. Its main function is the
distribution of goods and regulation of transport charges.
Another significant role played by Incoterms is to identify and define the place of transfer and
the transport risks involved in order to justify the ownership for support and damage of goods
by shipments sent by the seller or the buyer in an event of execution of transport.
Incoterms make international trade easier and help traders in different countries to understand
one another. These International Commercial Terms are the most widely used international
contracts protected by the ICC copyright.
Incoterms safeguard the following issues in the Foreign Trade contract or International Trade
Contract:
1. To determine the critical point of the transfer of the risks of the seller to the buyer in
the process forwarding of the goods (risks of loss, deterioration, robbery of the goods)
allow the person who supports these risks to make arrangements in particular in term
of insurance.
2. To specify who is going to subscribe the contract of carriage that is to say the seller
(exporter) or the buyer (importer).
3. To distribute between the seller and the buyer the logistic and administrative expenses
at the various stages of the process.

4. It is important to define who is responsible for packaging, marking, operations of

handling, loading and unloading, inspection of the goods.
5. Need To confirm and fix respective obligations for the achievement of the formalities
of exportation and importation, the payment of the rights and taxes of importation as
well as the sending of the documents. In dealing Foreign Trade there are 13 Incoterms
globally adopted by the International Chamber of Commerce.

INTERNATIONAL INCOTERMS
Incoterms or International commercial terms make trade between different countries easier.
International Commercial Terms are a series of international trade terms that are used are used
worldwide to divide he transaction costs and responsibilities between the seller and the buyer
and reflect state-of-the-art transportation practices.
Incoterms directly deal with the questions related to the delivery of the products from the
seller to the buyer. This includes the carriage of products, export and import responsibilities,
who pays for what and who has the risk for the condition of the products at different locations
within the transport process.
Incoterms and world customs Incoterms deal with the various trade transactions all over the
world and clearly distinguish between the respective responsibilities of the seller and the
buyers.
The 13 International Incoterms are:
Departure of goods by international transport with the risks and dangers to the Seller
(Exporter) and Buyers (Importers)

1. "EXW"- Ex Works
Title and risk pass to buyer including payment of all transportation and insurance cost
from the seller's door. Used for any mode of transportation.
Seller : In EXW shipment terms the Seller (Exporter) provides the goods for collection
by the Buyer (Importer) on the seller or exporter's promise. Responsibility for the seller
is to put the goods, in a good package which is adaptable and disposable by the
transport.
Buyer : The buyer or Importer arranges insurance for damage transit goods. The Buyer
or importer has to bear all costs and risks involved in shipment transactions.
(However, if the parties wish the seller to be responsible for the loading of the goods
on departure and to bear the risks and all the costs of such loading, this should be
made clear by adding explicit wording to this effect in the contract of sale. )

2. "FCA"- Free Carrier named point

"FCA"- Free Carrier named point: Title and risk pass to buyer including transportation
and insurance cost when the seller delivers goods cleared for export to the carrier.
Seller is obligated to load the goods on the Buyer's collecting vehicle; it is the Buyer's
obligation to receive the Seller's arriving vehicle unloaded.
Seller : The Sellers responsibility is to deliver the goods into the custody of the

transporters at defined points. It is important for the chosen place of delivery to have
an impact on the obligations of loading and unloading the goods.
Buyer : The Buyer nominates the means of transport or shipping mode and pays the
shipment charges.
The seller and the buyer agree upon the place for delivery of goods. If the buyer
nominates a person other than a carrier or transporter to receive the goods, the seller
is deemed to fulfill his obligation to deliver the goods when they are delivered to that
person.

3. "FAS"- Free Alongside Ship

FAS- Free Alongside ship: Title and risk pass to buyer including payment of all
transportation and insurance cost once delivered alongside ship by the seller. Used for
sea or inland waterway transportation. The export clearance obligation rests with the
seller.
In FAS has price includes all the costs incurred in delivering the goods alongside the
vessel at the port or nominated place of the buyer but there is not applicable charges
to the seller for loading the goods on board of vessel and no ocean freight charges and
marine insurance.
Seller: The responsibility of the seller are fulfilled when the goods are placed cleared
along the ship.
Buyer: Buyer or Importer bear all the expenses and risks of loss or damage of transit
goods which are delivered along the ship.

4. "FOB" - Free On Board

The FOB (Free on Board) price is inclusive of Ex-Works price, packing charges,
transportation charges upto the place of shipment., Seller also responsible for o clear
customs dues, quality inspection charges, weight measurement charges and other
export related dues. It is important that the shipment term in the Bill of Lading must
carry the wording "Shipped on Board' it must bear with signature of transporter or
carrier or his authorized representative with the date on which goods were "Boarded".
Seller :Seller responsible for clear customs dues, quality inspection charges, weight
measurement charges and other export related dues. It is important that the shipment
term in the Bill of Lading must carry the wording "Shipped on Board' it must bear with
signature of transporter or carrier or his authorized representative with the date on
which goods were "Boarded".
Buyer : The buyer indicates the ship and pays freight, transfer expenses and risks is
done when the goods passes or forwarding to the buyers warehouse by rail or ship.

5. "CFR"- Cost And Freight

In this term the exporter bears the cost of carriage or transport to the selected
destination port, in this term the risk transferable to the buyers at the port of
shipment.
Seller: The chooses the carrier, concludes and bears the expenses by paying freight to

the agreed port of destination, unloading not included. The loading of the duty-paid
goods on the ship falls on him as well as the formalities of forwarding. On the other
hand, the transfer of risks is the same one as in FOB.
Buyer: The buyers supports all the risk of transport, when the goods are delivered
aboard by ship at the loading port, buyer receives it from the carrier and takes delivery
of the goods from nominated destination port.

6. "CIF"- Cost, Insurance And Freight

CIF- Cost, Insurance and Freight: Title and risk pass to buyer when delivered on board
the ship by seller who pays transportation and insurance cost to destination port. Used
for sea or inland waterway transportation.
This Term involves insurance with FOB price and ocean freight. The marine insurance is
obtained by the exporter at his cost against the risk of loss or damage to the goods
during the carriage.
Seller: The CFR extends additional obligation to the seller for providing a maritime So
insurance against the risk of loss or damage to the goods. The seller pays the insurance
premium.
Buyer: He supports the risk of transportation, when the goods have been delivered
aboard the ship at the loading port. He takes delivery of the goods from the carrier to
the appointed port or destination.

7. "CPT"- Carriage Paid To

CPT- Carriage Paid To: Title, risk and insurance cost pass to buyer when delivered to
carrier by seller who pays transportation cost to destination. Used for any mode of
transportation.
This term uses land transport by rail, road and inland waterways. The seller and
exporter are responsible for the carriage of goods to the nominated destination and
have to pay freight up the first carrier.
Seller: The seller or exporter controls the supply chain after paying customs clearance
for export. Seller or Exporter select the carrier and pay the expenses up to the
destination.
Buyer: The risks of goods damages or loss are supported by the buyer as goods are given
by the first carrier. The buyer or importer has to pay importation customs clearance
and the unloading costs.

8. "CIP"- Carriage And Insurance Paid To

CIP- Carriage and Insurance Paid To: Title and risk pass to buyer when delivered to
carrier by seller who pays transportation and insurance cost to destination. Used for
any mode of transportation.
This term is similar to Carriage Paid To but the seller has to arrange and pay for the
insurance against the risk or loss or damage of the goods during the shipment.
Seller: The seller or buyer has to provide insurance and seller pays the freight and
insurance premium.

Buyer: The buyer or importer supports the risks of damages or loss, as goods are given
to the first carrier. The buyer has to pay customs clearance and unloading charges.

9. "DAF"- Delivered At Frontier

DAF- Delivered At Frontier: Title, risk and responsibility for import clearance pass to
buyer when delivered to named border point by seller. Used for any mode of
transportation.
This term is used when the goods are to be carried by rail or road.
Seller : The seller is responsible to make the goods available to the buyer by the carrier
till the customs border as defined in sales contract.
Buyer : The buyer takes delivery of the goods at the contract agreed point border and
he is responsible for bearing all customs formalities.

10. DES"- Delivered Ex-Ship

DES- Delivered Ex-Ship: Title, risk, responsibility for vessel discharge and import
clearance pass to buyer when seller delivers goods on board the ship to destination
port. Used for sea or inland waterway transportation.
Seller: The seller is responsible to make the goods available to the buyer up to the
named quay or after crossing the customs border.
Buyer: The buyer takes delivery of the goods from ship at destination port and pays the
expenses of unloading.

11. DEQ"- Delivered Ex-Quay

DEQ- Delivered Ex-Quay: Title and risk pass to buyer when delivered on board the ship
at the destination point by the seller who delivers goods on dock at destination point
cleared for import. Used for sea or inland waterway transportation.

12. "DDU"- Delivered Duty Unpaid

DDU- Delivered Duty Unpaid: Seller fulfills his obligation when goods have been made
available at the named place in the country of importation.
Seller: The seller is responsible for all transportation cost and accept the customs duty
and taxes as per defined in customs procedures.
Buyer: The buyer is responsible of the importation customs formalities.

13. "DDP"- Delivered Duty Paid

DDP- Delivered Duty Paid: Title and risk pass to buyer when seller delivers goods to the
named destination point cleared for import. Used for any mode of transportation.
Seller: The seller is responsible to make the goods available to the buyer at his risk and
cost as promised by the buyer. All the Taxes and duty on importation is promised by the

buyer to the seller.

Buyer: The buyer is responsible to take delivery at a nominated place and pays the
expenses for unloading of goods.

INCOTERMS 2012
INCOTERMS are a set of three-letter standard trade terms most commonly used in
international contracts for the sale of goods. It is essential that you are aware of your
terms of trade prior to shipment.
EXW EX WORKS ( named place of delivery)
The Sellers only responsibility is to make the goods available at the Sellers premises.
The Buyer bears full costs and risks of moving the goods from there to destination.
FCA FREE CARRIER ( named place of delivery)
The Seller delivers the goods, cleared for export, to the carrier selected by the Buyer. The
Seller loads the goods if the carrier pickup is at the Sellers premises. From that point, the
Buyer bears the costs and risks of moving the goods to destination.
CPT CARRIAGE PAID TO ( named place of destination)
The Seller pays for moving the goods to destination. From the time the goods are
transferred to the first carrier, the Buyer bears the risks of loss or damage.
CIP CARRIAGE AND INSURANCE PAID TO ( named place of destination)
The Seller pays for moving the goods to destination. From the time the goods are
transferred to the first carrier, the Buyer bears the risks of loss or damage. The Seller,
however, purchases the cargo insurance.
DAT DELIVERED AT TERMINAL ( named terminal at port or place of
destination)
The Seller delivers when the goods, once unloaded from the arriving means of transport,
are placed at the Buyers disposal at a named terminal at the named port or place of
destination. Terminal includes any place, whether covered or not, such as a quay,
warehouse, container yard or road, rail or air cargo terminal. The Seller bears all risks
involved in bringing the goods to and unloading them at the terminal at the named port or
place of destination.
DAP DELIVERED AT PLACE ( named place of destination)
The Seller delivers when the goods are placed at the Buyers disposal on the arriving
means of transport ready for unloading at the names place of destination. The Seller bears
all risks involved in bringing the goods to the named place.
DDP DELIVERED DUTY PAID ( named place)
The Seller delivers the goods -cleared for import to the Buyer at destination. The Seller
bears all costs and risks of moving the goods to destination, including the payment of
Customs duties and taxes.
2. MARITIME-ONLY TERMS
FAS FREE ALONGSIDE SHIP ( named port of shipment)
The Seller delivers the goods to the origin port. From that point, the Buyer bears all costs
and risks of loss or damage.
FOB FREE ON BOARD ( named port of shipment)
The Seller delivers the goods on board the ship and clears the goods for export. From that
point, the Buyer bears all costs and risks of loss or damage.
CFR COST AND FREIGHT ( named port of destination)

The Seller clears the goods for export and pays the costs of moving the goods to
destination.
The Buyer bears all risks of loss or damage.
CIF COST INSURANCE AND FREIGHT ( named port of destination)
The Seller clears the goods for export and pays the costs of moving the goods to the port
of destination.
The Buyer bears all risks of loss or damage. The Seller, however, purchases the cargo
insurance.

Market Intelligence
Market Intelligence is about providing a company with a view of a market using existing sources of
information to understand what is happening in a market place, what the issues are and what the
likely market potential is. See some examples of our work.
Market Intelligence can be divided into two spheres

Market Intelligence based on external data

Market Intelligence based on internal data

Often Market Intelligence relies purely on external data such as analysts reports, but there is often a
great deal of untapped information internally that would give you an insight into your market, from
sources such as databases and prospect lists, and an holistic view can prove very insightful.

Market Intelligence from external data

Market intelligence from external data is normally gathered through what is known as desk
research. This means sourcing and analysing published information to build a picture of a market
and to try and answer some specific commercial questions such as what is the market potential,
what are competitors future plans likely to be, what prices might customers be willing to pay,
what's the best means of entering a market.
Central to successful desk research is the ability to track down sources of information and to
provide the right level of analysis. For example identifying who your competitors are and
analysing their market position against yours to find strengths and weaknesses and indications of
new developments, or identifying potential channel partners or locations to set up new offices.
Consequently, related to desk research in the form of collecting background information, is the
process of list building. This involves seeking out lists of likely prospects or partners for
relationship or network building and finding out key information about the companies for
marketing purposes. A variety of places provide off-the-shelf lists, but often these lists need to be
enhanced with other forms of information to make them useful - for instance background
information about what the business offers, it's market positioning and details of who to contact.

A specific form of Market Intelligence is competitive intelligence. This is typically undertaken on

an on-going basis and involves the collection of news, materials and other information about
competitors from a wide variety of sources. This may involve collecting information about
market positioning and market messages, core clients or contracts, size and structure of the
business and issues like pricing or typical deal structures. Examples might include collecting
price-check information, or details of promotional and advertising campaigns, or monitoring
news channels for information about new products or new technologies (eg patents). Although
competitor intelligence can be carried out as a one off project, in reality, because of its on-going
nature, competitive intelligence is often more about putting structures in place to enable
information about competitor behaviour to be fed-back and monitored, than specifically finding
one-off pieces of data. One key point is that for legal and ethical reasons, competitor research
should not be carried out in any underhand way (eg misrepresentation) and so should rely only on
openly available information sources.
Increasingly, Market Intelligence can involve collecting data from posts, tweets and other social
media. This type of 'market intelligence' overlaps with some forms of market research and with
PR monitoring. For some companies, the volume of comment together with the need to manage
and monitor across multiple languages and multiple domains mean that large scale software is
used to capture and then text-analyse the data. This can provide companies with good insights
into the mood of a market about, for instance, a new product that has been launched. But it can
also be part of a communication or PR campaign to allow companies to be alert to negative
comment or problems that are publicised via the social networks

Market Intelligence from internal data

While much marketing intelligence is associated with collecting information externally, much
marketing intelligence information can come from making better use of existing information such
as customer databases, web-analytics and test-marketing. For instance by carrying out database
analysis on orders taken it may be possible to understand where you have cross-sale and up-sale
opportunities, or to understand what type of customers are your most profitable. Common
database analysis include tracking recency, frequency and value of purchases. Looking for pareto
segments. Augmenting database lists with external data to identify purchasing patterns.
Database information is not the only source of market data. Your website may also include a high
degree of valuable information about who is looking for your products and services. Web site
traffic analysis can help you understand what customers are looking for and why, and can be used
in conjunction with test advertising and variations in site and page delivery (eg varying landing
pages) to provide direct measurement and enhancement of marketing effectiveness.
Finally, don't overlook knowledge about customers, markets and competitors that comes from
your staff. Often this is a poorly tapped source of information. Collecting and disseminating such
information falls into the realms of customer knowledge management and making better use of

this customer knowledge can help businesses focus far more on what the customer wants and
says.
Problems of foreign trade.
Foreign trade has a number of complications. These are:
i. Payment between nations involved in foreign trade takes place through national currency
of their own. This sorts of payment create a number of complications on exchange of
currency.
ii. High import duties are levied to give protection to certain home industries. Similarly
high export duties are levied to restrict exportof certain commodities. The levying of high
duties on export and import create obstacles in the way of foreign trade.
iii. The goods are exposed to greater risks because these are to be transported over a long
distance.
iv. The payment of goods are delayed because there is a wide gap between the time of
dispatch of goods and its receipts.
v. This type of trade takes place without any personal contact between the seller and the
buyer. So the creditworthiness of the buyer can not be judged by the seller.

Developing countries believe they get a raw deal when it

comes to international trade. These problems include

Relying on only one or two primary goods as their main exports

They cannot control the price they get for these goods
The price they pay for manufactured goods increases all the time
As the value of their exports changes so much long term planning
is impossible
Increasing the amount of the primary good they produce would
cause the world price to fall

Developing countries that try to export manufactured goods find that trade barriers are
put in their way. There are two types of trade barrier - quotas and tariffs.
1. A quota is a limit on the amount of goods a country can export to another country
2. A tariff is a tax on imports
Other problems that developing countries face are they are short of the money that is
needed to set up new businesses and industries. Also, developing countries have fewer
people who have the wealth to buy the goods made in local industries.

International trade is characterised by the following special problems or difficulties.

1. Distance:
Due to long distance between different countries, it is difficult to establish quick and close
trade contacts between traders. Buyers and sellers rarely meet one another and personal
contact is rarely possible.
There is a great time lag between placement of order and receipt of goods from foreign
countries. Distance creates higher costs of transportation and greater risks.
2. Different languages:
Different languages are spoken and written in different countries. Price lists and catalogues
are prepared in foreign languages. Advertisements and correspondence also are to be done in
foreign languages.
A trader wishing to buy or sell goods abroad must know the foreign language or employ
somebody who knows that language.
3. Difficulty in transportation and communication:
Dispatch and receipt of goods takes a longer time and involves considerable expenses. During
the war and natural calamities, transportation of goods becomes even more difficult.
Similarly, the costs of sending or receiving information are very high.
4. Risk in transit:
Foreign trade involves much greater risk than home trade. Goods have to be transported over
long distances and they are exposed to perils of the sea. Many of these risks can be covered
through marine insurance but increases the cost of goods.
5. Lack of information about foreign businessmen:
In the absence of direct and close relationship between buyers and sellers, special steps are
necessary to verify the creditworthiness of foreign buyers. It is difficult to obtain reliable
information concerning the financial position and business standing of the foreign traders.
Therefore, credit risk is high.
6. Import and export restrictions:
Every country charges customs duties on imports to protect its home industries. Similarly,
tariff rates are put on exports of raw materials. Importers and exporters have to face tariff
restrictions.
They are required to fulfil several customs formalities and rules. Foreign trade policy,
procedures, rules and regulations differ from country to country and keep on changing from
time to time.

7. Documentation:
Both exporters and importers have to prepare several documents which involve expenditure
of time and money.
8. Study of foreign markets:
Every foreign market has its own characteristics. It has requirements, customs, weights and
measures, marketing methods, etc., of its own. An extensive study of foreign markets is
essential for success in foreign trade. It is very difficult to collect accurate and up to date
information about foreign markets.
9. Problems in payments:
Every country has its own currency and the rate at which one currency can be exchanged for
another (called exchange rate) keeps on fluctuating change in exchange rate create additional
risk.
Remittance of money for payments in foreign trade involves much time and expense. Due to
wide time gap between dispatch of goods and receipt of payment, there is greater risk of bad
debts.
10. Frequent market changes:
It is difficult to anticipate changes in demand and supply conditions abroad. Prices in
international markets may change frequently. Such changes are due to entry of new
competitors, changes in buyers' preferences, changes in import duties and freight rates,
fluctuations in exchange rates, etc.
11. Investment for longer period:
There is longer time gap between supply of goods and receipt of payment. Therefore, the
exporter's capital remains locked up over a longer period.
12. Intense competition:
Traders who want to sell goods abroad have to face severe competition from different
countries. Considerable market research is necessary to ensure suitability of product in
foreign markets. Heavy expenditure on advertising and sales promotion may be necessary.

More Problems In International Business

Deficient Infrastructure
Inadequacy in infrastructure can be another factor that deters business expansion.

According to a survey by MIGA 2002, the reliability and quality of infrastructure and
utilities was the fourth most important factor in choosing a country location to
invest. In general, poor infrastructure will increase overall capital and operating
costs for firms for the reason that poor infrastructure increases the uncertainty risk
and requires firms to hold higher levels of inventory in order to reduce the risks of
production being interrupted.
In some cases, a company has to incorporate its own electricity generators, water
filtration units and communication facilities to reimburse the deficiencies of local
infrastructure. The access to roads and utility also further increases the company
investment cost. McDonald is one of the examples. McDonald as the global fast food
giant was having expansion problems in India. Based on an article from India,
McDonald as the global fast food giant has 600 stores in China but in contrast it has
just 50 outlets in India. The major issue here is the shortage of infrastructure,
especially highway roads that link to smaller towns in India.
According to the survey by global consulting major KPMG and Economist
Intelligence Unit, 66 percent of the total executives stated that existing
transportation infrastructure in India highly increases the operating cost for their
company, 62 percent of Indian executives said the existing energy and power supply
infrastructure has substantially increased the company operating cost. However,
companies can consider joint venture as market entry strategy to reduce the risk.
Through joint venture, companies can share the financial risk, secure access to
resources, gain local management knowledge and obtain access to market or
distribution.
Policy barriers
Macroeconomic policies are another problem that deter foreign firm from entering
a market, increase cost and increase the business risks that foreign firm have to deal.
The major macroeconomic policies that could deter a business expansion are: (a)
Fiscal policies: the stability of fiscal policy can influence the level and growth of tax
revenues which directly influence the trade taxes and corporate revenue tax.
(b)Monetary policies: the control of money supply by central bank can influence
domestic interest and inflation rates, and indirectly on the stability of domestic
currency values. (c) Debt management policies: the government internal and
external debt and comfort levels for repaying loans. High debt country tends to repay
public debt by printing domestic currency and caused inflation and deprecation of
currency.

In short, bad macroeconomic policies management will cause economic instability

and increase the risk of future taxation, currency risk and currency convertibility risk
which affects company profits. Euro Disney is one of the examples to illustrate the
problem. The financial plans for Euro Disneyland first year operation anticipated
total revenues of FF 5,482 million and a net profit after taxation of FF 204 million.
However, in reality they didn't meet the plans. European recession caused Euro
Disney to fall into serious financial problem. In November 1992 the management
announced a loss of FF 188 million. The second year was even worse; they faced a
loss of FF 5,337 million whereas total turnover was FF 5,725 million due to the
failure of unforeseen European recession.
Managing global business is equal to managing the complexity; decision that made
on today may be not appropriate tomorrow. Thus, it is important to gather all
information to create a basis for plan decision making. All plans include uncertainty
and risk because the nature of future planning requires estimation.
Technology
Technology is the key to provide businesses with the competitive edge that can lead
to greater profitability and growth. Indeed, technological factors can lower the
barrier to entry and reduce the minimum efficient production levels, reduce capital
costs and labor costs, and influence outsourcing decisions.
For instance, although outsourcing can help companies to influence the latest and
the most sophisticated workflow technologies, International Business Machines
Corporation (IBM), the world's largest supplier of technology services had failed due
to increase labor. IBM set up global centers for tasks like software development and
maintenance and employing 53,000 workers in India, and employing 200,000
people worldwide in its services business with spending on $11.8 billion on 54
acquisitions (36 software and 18 services companies). This growth means that they
had to add more people, the IBM's business is in trouble for its labor represents 70 to
80 percent of the cost in traditional technology service contracts, and the traditional
work of maintaining and updating software and data centers for corporate customers
is still a large part of IBM.'s services business.
In order to avoid such pitfalls in outsourcing, a company like IBM can integrate the
business strategy that focus on the technological advances to substitute software
automation for its labor force. This case of IBM illustrates that the key strategy for

multinational companies in expanding business overseas is to use global teams to

take advantage of greater performance to create competitive edge as well as
continually investing in R&D activities in growth opportunities to ensure to compete
on the basis of innovation and technology.
Entry Strategies
When entering a foreign market, a company must decide on the appropriate entry
strategy and ownership forms; while at the same time considering the legal structure,
the amount of capital, resources invested, and managerial involvement required in
the host country. The management of joint ventures, for instance, is one of the key
entry strategies a company can consider when expanding business overseas.
International Business Machines Corporation (IBM), developers and manufacturers
of information technology products and services worldwide, though underestimated
the costs associated with the joint ventures that recently formed with PC maker
Lenovo resulting reduction in its profit margins. Having manufactured an IBM's
product in its entirety, Lenovo was privy to an IBM's intellectual property, and thus
enabling to build its own brand expanded also designing and engineering custom
electronic components and forge its own relationships with retailers and distributors
including those of the IBM.
From this case, selecting the appropriate entry strategies are the key factor in the
success under different circumstances. IBM found itself facing not only more
dangerous vendors, Lenovo, but also a new competitor that once underestimated.
Multinational corporations and their manufacturing partners in foreign market need
to rethink how they manage their relationships with each other. For companies like
IBM and the other multinational companies, partnership problems are one of the
leading causes of joint ventures failure. To avoid such pitfall, a company should focus
on investing in the personal relationships that must be built to create a successful
joint venture and commit the necessary time and effort, even thought the tangible
inputs of the decision such as legal function of the structure, the financial
considerations of ownership, the market analysis, and end result and desired
outcome are all critical concerns.

THE INTERNATIONAL MARKETING

MIX

When launching a product into foreign markets firms can use a standard
marketing mix or adapt the marketing mix, to suit the country they are carrying
out their business activities in. This article talks you through each element of
the marketing mix and the arguments for and against adapting it suit each
foreign market.
International Marketing Mix: Product
Basic marketing concepts tell us that we will sell more of a product if we aim to
meet the needs of our target market. In international markets this will involve
taking into consideration a number of different factors including consumer's
cultural backgrounds, religion, buying habits and levels of personal disposable
income. In many circumstances a company will have to adapt their product and
marketing mix strategy to meet local "needs and wants" that cannot be changed.
Mcdonald is a global player however, their burgers are adapted to local needs.
In India where a cow is a sacred animal their burgers contain chicken or fish
instead of beef. In Mexico McDonalds burgers come with chilli sauce. Cocacola is some parts of the world taste sweeter than in other places.
The arguments for standardisation state that the process of adapting the product
to local markets does little more than add to the overall cost of producing the
product and weakens the brand on the global scale. In todays global world,
where consumers travel more, watch satellite television, communicate and shop
internationally over the internet, the world is a smaller than it used to be.
Because of this there is no need to adapt products to local markets. Brands such
as MTV, Nike, Levis are all successful global brands where they have a
standardised approach to their marketing mix, all these products are targeted at
similar groups globally.
As you can see both strategies; using a standard product and an customised
product can work just as well. The right approach for each organisation will
depend on their product, strength of the brand and the foreign market that the
marketing is aimed at.
International Marketing Mix: Promotion
As with international product decisions an organisation can either adapt or
standardise their promotional strategy and message. Advertising messages in
countries may have to be adapted because of language, political climate,
cultural attitudes and religious practices. For example a promotional strategy in

one country could cause offence in another. Every aspect of promotional detail
will require research and planning one example is the use of colour; red is
lucky in China and worm by brides in India, whilst white is worn by mourners
in india and China and brides in the United Kingdom. Many organisation adapt
promotion strategies to suit local markets as cultural backgrounds and practices
affect what appeals to consumers.
The level of media development and availability will also need to be taken into
account. Is commercial television well established in your host country? What
is the level of television penetration? How much control does the government
have over advertising on TV, radio and Internet? Is print media more popular
than TV?
Before designing promotional activity for a foreign market it would be
expedient to complete a PESTanalysis so that you have a complete
understanding of the factors operating in the foreign market you would like to
enter.
International Marketing Mix: Pricing
Pricing on an international scale is a complex task. As well as taking into
account traditional price considerations such as fixed and variable costs,
competition and target groups (click here for further information about
marketing mix pricing) an organisation needs to consider additional factor such
as
the cost of transport
tariffs or import duties
exchange rate fluctuations
personal disposal incomes of the target market
the currency they want to be paid in and
the general economic situation of the country and how this will influence
pricing.
The internet has created further challenges as customers can view global prices
and purchase items from around the world. This has increased the level of
competition and with it pricing pressures, as global competitors may have
lower operating costs.
International Marketing Mix: Place

The Place element of the marketing mix is about distributing a product or

service to the customer, at the right place and at the right time. Distribution in
national markets such as the United Kingdom will probably involve goods
being moved in a chain from the manufacturer to wholesalers and onto retailers
for consumers to buy from. In an overseas market there will be more parties
involved because the goods need to be moved around a foreign market where
business practices will be different to national markets. For example in Japan
there are approximately five different types of wholesaler involved in the
distribution chain. Businesses will need to investigate distribution chains for
each country they would like to operate in. They will also need to investigate
who they would like to sell their products and services to businesses, retailers,
wholesaler or directly to consumers. The distribution strategy for each country
a business operates in could be different due to profit margins and
transportation costs.
Conclusion
Prior to designing an international marketing mix a business should carry out
a PEST analysis for every country they would like to operate in. This will help
them determine what elements of the marketing mix can be standardised and
which elements will need adjustments to suit local needs. It may well be that a
business is able to use a standard marketing mix in the majority of cases and
only need to adjust it on the rare occasion. Or every country may need its own
marketing mix.
List of Shipping Companies in India
S.No.

Name

Business

Country

Port (city)

Hede Navigation

Owner, Manager

India

Mumbai

Poompuhar Shipping

Owner, Manager

India

Chennai

Garware Offshore Services Ltd

Owner, Manager

India

Mumbai

Varun Shipping Co Ltd

Owner, Manager

India

Mumbai

Tolani Shipping Co Ltd

Owner, Manager

India

Mumbai

Apeejay Shipping Ltd

Owner, Manager

India

Kolkata

Essar Shipping Ports

Owner, Manager

India

Mumbai

Oil & Natural Gas Corp Ltd

Owner, Manager

India

Mumbai

Visakhapatnam Port

Owner, Manager

India

Visakhapatnam

10

Chowgule Steamships Ltd

Owner, Manager

India

Goa

11

Dempo Steamships Ltd

Owner, Manager

India

Mumbai

12

India Steamship

Owner, Manager

India

Kolkata

13

Great Eastern Shipping Co Ltd

Owner, Manager

India

Mumbai

14

Five Star Marine Services

Marine Equipment

India

Mumbai

15

LBS CAMSAR

Other

India

Mumbai

16

Indian Register Shpg (Ho)

Maritime Organisation

India

Mumbai

17

Nageswaran, Narichania

P&I, Insurance, Low

India

Chennai

18

Hiralal & Co

P&I, Insurance, Low

India

Goa

19

Hiralal & Co (Shipping)

P&I, Insurance, Low

India

Mangalore

20

Loss Prevention Association

P&I, Insurance, Low

India

Mumbai

21

ICICI Bank - Infotech Svcs Ltd

Other

India

Mumbai

22

Dhiraj Offshore Surveyors

Consultants, Surveyors

India

Mumbai

23

Richards Hogg Lindley - India

P&I, Insurance, Low

India

Mumbai

24

Sharma, K & Associates

Consultants, Surveyors

India

Mumbai

25

Garden Reach Shipbuilder & Eng

Shipbuilder, Repairer

India

Kolkata

26

Mumbai Port Trust

Port Authority

India

Mumbai

27

Chennai Port Trust

Owner, Manager

India

Chennai

28

Beeline Shipping Ltd

Ship Broker

India

Mumbai

29

V Ships Mumbai

Owner, Manager

India

Mumbai

30

Cochin Shipyard Ltd

Shipbuilder, Repairer

India

Cochin

31

Hooghly Dock & Port Eng

Shipbuilder, Repairer

India

Kolkata

32

Narichania & Narichania

P&I, Insurance, Low

India

Mumbai

33

Hindustan Shipyard Ltd

Port Service

India

Visakhapatnam

34

United India Insurance Co

P&I, Insurance, Low

India

Chennai

35

Shalimar Works

Shipbuilder, Repairer

India

36

Maritime Training Institute

Other

India

Mumbai

37

Anandisher Seafreight Co

Consultants, Surveyors

India

New Delhi

38

Berry Interoceanic Co

Consultants, Surveyors

India

New Delhi

39

Zaiwalla Solicitors - Mumbai

P&I, Insurance, Low

India

Mumbai

40

Indian Register - Kolkata

Maritime Organisation

India

Kolkata

41

Indian Register - Cochin

Maritime Organisation

India

Cochin

42

Indian Register - Goa

Maritime Organisation

India

Goa

43

Indian Register - Gandhidham

Maritime Organisation

India

Gandhidham

44

Indian Register - Chennai

Maritime Organisation

India

Chennai

45

Adsteam Agency (India) Ltd

Owner, Manager

India

Mumbai

46

Westfalia Separator India

Marine Equipment

India

New Delhi

47

Univan Ship Mgnt - Mumbai

Shipbuilder, Repairer

India

Mumbai

48

Chowgule & Co Pvt Ltd

Shipbuilder, Repairer

India

Goa

49

SEAMEC Ltd

Owner, Manager

India

Mumbai

50

Seaworld Shipping & Logistics

Owner, Manager

India

Mumbai

51

Bharati Shipyard Ltd

Shipbuilder, Repairer

India

Mumbai

52

Kolkata Port Trust

Port Authority

India

Kolkata

53

Central Inland Water Tran

Shipbuilder, Repairer

India

Kolkata

54

Scindia Steam Nav

Shipbuilder, Repairer

India

55

Varun Shipping - N Delhi

Owner, Manager

India

New Delhi

56

Trident Marine Services

Shipbuilder, Repairer

India

Mumbai

57

Nippon Kaiji Kyokai - Mumbai

Maritime Organisation

India

Mumbai

58

International Maritime Inst-In

Other

India

New Delhi

59

Vanson Industrial Corpn

Marine Equipment

India

Mumbai

60

Baxi & Co, J M - Porbandar

Port Agent

India

Porbandar

61

Trisul Shipping & Trading

Owner, Manager

India

Kolkata

62

Jaisu Shipping Co Pvt Ltd

Owner, Manager

India

Kandla

63

Marine Mgmt Services Pvt Ltd

Owner, Manager

India

Mumbai

64

Shaan Marine Svcs Pvt Ltd

Ship Broker

India

Mumbai

65

New Mangalore Port Trust

Port Authority

India

Mangalore

66

Arico Marine

Marine Equipment

India

Mumbai

67

Dredging Corp India Ltd

Owner, Manager

India

Visakhapatnam

68

SGS India Pvt Ltd

Consultants, Surveyors

India

Mumbai

69

Mazagon Dock

Owner, Manager

India

Mumbai

70

Indian Register - Bangalore

Maritime Organisation

India

Bangalore

71

Indian Register - Pune

Maritime Organisation

India

Pune

72

Indian Register - Delhi

Maritime Organisation

India

New Delhi

73

Lloyd's Register - Mumbai

Maritime Organisation

India

Mumbai

74

Lloyd's Register - Kolkata

Maritime Organisation

India

Kolkata

75

Lloyd's Register - Hyderabad

Maritime Organisation

India

Hyderabad

76

Lloyd's Register - New Delhi

Maritime Organisation

India

New Delhi

77

Lloyd's Register-Visakhapatnam

Maritime Organisation

India

Visakhapatnam

78

Pondicherry Port Authority

Port Authority

India

Pondicherry

79

Gujarat Maritime - Porbandar

Port Authority

India

Porbandar

80

Sahi Oretrans Pvt Ltd

Owner, Manager

India

Mumbai

81

Likhari & Associates

Consultants, Surveyors

India

Mumbai

82

Chowgule Brothers - Kakinada

Port Agent

India

Kakinada

83

ABS Pacific - Visakhapatnam

Maritime Organisation

India

Visakhapatnam

84

ABS Pacific - Mormugao Goa

Maritime Organisation

India

Goa

85

ABS Pacific - Chennai

Maritime Organisation

India

Chennai

86

ABS Pacific - Cochin

Maritime Organisation

India

Cochin

87

ABS Pacific - Kolkata

Maritime Organisation

India

Kolkata

88

ABS Pacific - Mumbai

Maritime Organisation

India

Fort Mumbai

89

Baxi & Co, J M - Tuticorin

Port Agent

India

Tuticorin

90

Sical Logistics Ltd

Owner, Manager

India

Chennai

91

ABG Shipyard Ltd

Shipbuilder, Repairer

India

Mumbai

92

Accord Ship Management Pvt Ltd

Owner, Manager

India

Mumbai

93

Paradip Port Trust

Port Authority

India

Paradip

94

Indian National Shipowners

Maritime Organisation

India

Mumbai

95

Garden Reach Shipbuilders Ltd

Marine Equipment

India

Ranchi

96

Hindustan Brown Boveri

Marine Equipment

India

New Delhi

97

CILT India

Maritime Organisation

India

New Delhi

98

Arcadia Shipping Ltd

Owner, Manager

India

Mumbai

99

IHC Holland - India

Marine Equipment

India

New Delhi

100

Rochem (India) Pvt Ltd

Marine Equipment

India

Mumbai

101

Ocean Span Shipping Co

Shipbuilder, Repairer

India

Mumbai

102

Vacman Sanitation

Marine Equipment

India

Navi Mumbai

103

Indian Register - Mumbai

Maritime Organisation

India

Mumbai

104

Mormugao Port Trust

Owner, Manager

India

Goa

105

Allepey Port Authority

Port Authority

India

Allepey

106

Gujarat Maritime Board

Port Authority

India

Bhavnagar

107

Baxi & Co, J M - Veraval

Port Agent

India

Veraval

108

Velji P & Sons - Jamnagar

Port Service

India

Jamnagar

109

Roy & Chatterjee Pvt Ltd

Port Agent

India

Visakhapatnam

110

Nagapattinam Port Authority

Port Authority

India

Nagapattinam

111

Cochin Port Trust

Port Authority

India

Cochin

112

Kundapur Port Authority

Port Authority

India

Gangolli

113

Chennai Port Trust

Port Authority

India

Chennai

114

Malpe Port Authority

Port Authority

India

Malpe

115

Redi Port Authority

Port Authority

India

Mumbai

116

Hiralal & Co

Port Agent

India

Goa

117

Visakhapatnam Port Trust

Port Authority

India

Visakhapatnam

118

Chowgule Brothers - Mumbai

Port Agent

India

Mumbai

119

SCI

Owner, Manager

India

Mumbai

120

Machilipatnam Port Authority

Port Authority

India

Machilipatnam

121

Trivandrum Port Authority

Port Authority

India

Trivandrum

122

Haldia Port Authority

Port Authority

India

Haldia

123

International Clearing/Shippin

Port Agent

India

Paradip

124

Aspinwall & Co

Port Agent

India

Tuticorin

125

Tuticorin Port Trust

Port Authority

India

Tuticorin

126

Belekeri Port Authority

Port Authority

India

Karwar

127

Bheemunipatnam Port Authority

Port Authority

India

Bheemunipatnam

128

Calicut Port Authority

Port Authority

India

Calicut

129

Calingapatnam Port Authority

Port Authority

India

Calingapatnam

130

Chowgule Brothers - Jamnagar

Port Agent

India

Jamnagar

131

Chowgule Brothers - Cochin

Port Agent

India

Cochin

132

Chowgule Brothers - Gandhidham

Port Agent

India

Gandhidham

133

Chowgule Brothers - Ratnagiri

Port Agent

India

Ratnagiri

134

Chowgule Brothers - Chennai

Port Agent

India

Chennai

135

Cuddalore Port Authority

Port Authority

India

Cuddalore

136

Tadri Port Authority

Port Authority

India

Tadri

137

Neendakara Port Authority

Port Authority

India

Trivandrum

138

Honavar Port Authority

Port Authority

India

Honavar

139

Indian Oil Corp Ltd

Bunkerer

India

Mangalore

140

Baxi & Co, J M - Pondicherry

Port Agent

India

Pondicherry

141

Baxi & Co, J M - Visakhapatnam

Port Agent

India

Visakhapatnam

142

Baxi & Co, J M - Navlakhi

Port Agent

India

Morvi

143

Jafarabad Port Authority

Port Authority

India

Amreli

144

Jakhau Port Authority

Port Authority

India

Mandvi

145

Kakinada Seaports Pvt Ltd

Port Authority

India

Kakinada

146

Kandla Port Trust

Port Authority

India

Kandla

147

Kandla Port (Jamnagar)

Port Authority

India

Jamnagar

148

Karwar Port Office

Port Authority

India

Karwar

149

Gujarat Maritime Board

Port Authority

India

Mandvi

150

Mundra Port

Port Authority

India

Mundra

151

Gujarat Maritime Board

Port Authority

India

Morbi

152

Panaji Port Authority

Port Authority

India

Goa

153

Gujarat Maritime Board

Port Authority

India

Gandhinagar

154

Gujarat Pipavav Port Ltd

Port Authority

India

Amreli

155

Bedi Bunder Port Authority

Port Authority

India

Bedi Bunder

156

Vengurla Port Authority

Port Authority

India

Vengurla

157

Gujarat Maritime Board

Port Authority

India

Veraval

158

Tata Tea Ltd

Port Authority

India

Kolkata

159

Gujarat Maritime Board

Port Authority

India

Okha

160

Maharashtra Maritime Board

Port Authority

India

Ratnagiri

161

Bedi Groups of Ports

Port Authority

India

Jamnagar

162

Gujarat Maritime Board

Port Authority

India

Jamnagar

163

SAI Shipping Co Pvt Ltd

Owner, Manager

India

Mumbai

164

Confidence Shipping Ltd

Owner, Manager

India

Mumbai

165

Sesa Goa Ltd

Owner, Manager

India

Goa

166

Mercator Ship Management

Owner, Manager

India

Mumbai

167

Dolphin Offshore Enterprise

Owner, Manager

India

Mumbai

168

MAN B&W Diesel AS - Mumbai

Port Service

India

Mumbai

169

Goa Shipyard Ltd

Shipbuilder, Repairer

India

Goa

170

India Govt Navy

Owner, Manager

India

Delhi

171

Jawaharlal Nehru Port Tst

Port Authority

India

Mumbai

172

Sanmar Shipping Ltd

Owner, Manager

India

Chennai

173

Krishna Rao, E

Marine Equipment

India

Visakhapatnam

174

Geonics (Asia) Pty Ltd

Marine Equipment

India

Navi Mumbai

175

Electronics Marine

Marine Equipment

India

Chennai

176

Marine & Electrical Svcs

Marine Equipment

India

Visakhapatnam

177

ICS - Kolkata Branch

Port Agent

India

Kolkata

178

Entek Ird - India

Marine Equipment

India

Mumbai

179

Reliance Industries Ltd

Owner, Manager

India

Mumbai

180

PS Lulla & Co

Marine Equipment

India

Mumbai

181

Asia Maritime Services

Owner, Manager

India

Mumbai

182

Det Norske - Mumbai

Maritime Organisation

India

Mumbai

183

Crowe Boda & Co Pvt Ltd

P&I, Insurance, Low

India

Mumbai

184

Echkay Consultancy Svcs

Shipbuilder, Repairer

India

Kartar Bhavan

185

J B Boda & Co Pvt Ltd

P&I, Insurance, Low

India

Mumbai

186

TCI Seaways Ltd

Owner, Manager

India

Gurgaon

187

Gal Offshore

Owner, Manager

India

Mumbai

188

Ambuja Cements Ltd

Owner, Manager

India

Mumbai

189

India Govt

Owner, Manager

India

Delhi

190

Triveni Shipping Services

Port Agent

India

Porbandar

191

Triveni Shipping Services

Port Service

India

Bhavnagar

192

Gulf Agency - Cochin

Port Agent

India

Cochin

193

Gulf Agency - Chennai

Port Agent

India

Chennai

194

Gulf Agency - Mumbai

Port Agent

India

Mumbai

195

Dolphin Offshore Enterprises

Shipbuilder, Repairer

India

Mumbai

196

Shipping Corp India (Off)

Towage, Salvage

India

Mumbai

197

Ispat Industries Ltd

Owner, Manager

India

Mumbai

198

Harrisons Malayalam Ltd

Port Agent

India

Cochin

199

Everett (India) Pvt Ltd

Port Agent

India

Kolkata

200

Sri Ganesh Shpg Agency

Port Agent

India

Mangalore

Example of International marketing using the 7 Ps

Mc Donald
PRODUCT:
Mc Donalds product portfolio primarily comprises of vegetarian and non-vegetarian
burgers. Thevegetarian burgers like Veg surprise, salad sandwich, Mc Aloo Tikki Burger,
Mc veggie burger are offered to the customers. Non-vegetatarian burgers
include Chicken Mc grill, Mc chicken burger, Fliet of fish and chicken
maharaja burger. Along with these french-fries, veg pizza mc puff, wrap chicken
Mexican, wrap paneer salsa, potato wedges, soft serve pineapple and choclateice creams,
Mc swirl soft drinks, coffee and Mc shakes are also offered to increase the variety inthe
product portfolio. Mc Donalds also provides mean combos with medium fries
and mediumsoft drink, happy mean with small soft drink, econo meals with small soft
drink and value mealswith potato wedges and small soft drink.
PRICE:
Mc Donalds vegetarian burgers are priced between Rs 20 and Rs 48. Wrap paneer salsa is
pricedat Rs 45-50. The non vegetarian burgers are priced between Rs 30 and
Rs 60. Wrap chickenMexican is priced at Rs 55. Medium French fries are
priced at Rs 28, potato wedges at Rs 20,soft serves at Rs 35, mc swirl at Rs
12, medium soft drinks at Rs 20 and medium shakes at Rs 45.
PROMOTION:
At Mc Donalds the prime focus is on targeting children. In happy meals too which are
targeted atchildren small toys are given along with the meal. Apart from this, various
schemes for winning prices by way of lucky draws and also scratch cards are
given when an order is placed on thev a r i o u s m e a n c o m b o s . I n f a c t , t h e
v a r i o u s e c o n o m e a l s a n d v a l u e m e a l s a l s o s i g n a l t o t h e customer that
buying separate items results in greater value for money for the customer.

PLACE:
Mc Donals outlets are very evenly spread throughout the NCR region. Mc Donalds
does notoffer home delivery but its outlets are very readily accessible. Mc Donalds also
offers take awaydrive through facilities.
PEOPLE:
The employees in Mc Donalds have a standard uniform and Mc Donalds
specially focuses onfriendly and prompt service to its customers from their employees.
PROCESS:
The food manufacturing process at Mc Donalds is completely transparent i.e. the whole
processis visible to the customers. In fact, the fast food joint allows its customers to view
and judge thehygienic standards at Mc Donalds by allowing them to enter the
area where the process takes place. The customers are invited to check the
ingredients used in food.
PHYSICAL EVIDENCE:
M c D o n a l d s f o c u s e s o n c l e a n a n d h yg i e n i c i n t e r i o r s o f i s o u t l e t s a n d
a t t h e s a m e t i m e t h e interiors are attractive and the fast food joint maintains a proper
decorum at its joint

Coca Cola
Coca-Cola is one of the most widely used soft drink in the world. The company has very
efficient and extensive distribution system in the world. There is a great variety of brands
offered by Coca-cola throughout the world like Diet coke, sprite, Fanta, Rc cola, Minute
made etc. you can find the Coca-cola soft drinks anywhere in every country of the world.
The 'Coca-Cola' brand has been adopted the strategy of global marketing. They are
considering the whole world as single market place and uniform marketing strategy was
being used Coca-cola for many years, but now the trend is changing and different marketing
campaigns are being designed for different regions of the world. . Business decisions are
made on a domestic basis to fit in with the culture and needs of the domestic community. In
1919 Coca-Cola decided it was time to go global. The Coca-Cola Company decided to take
its operations beyond national boundaries and marketing research was started in central
America, china and many other countries of the world. Because of successful and efficient
marketing research Coca-cola was able to produce globally in different regions of the world.
Coca-cola has got such an intensive distribution and bottlers system that its products are
available everywhere in the world, starting from Middle East to Australia. You can find coca
cola product on every retail outlet
There are many reasons why company decided to sell its product in international market.
The prospect exists to sell 'Coca-Cola' worldwide, because 'Coca-Cola' is a product which
can be used by everyone irrespective of age and gender, all over the world. Marketing
globally demand the company to have a marketing team in line with a country's consumers
so effective sales can be made and good relations with the abroad key employees can be
maintained.

If we look on advertising perspective of Coca-cola, advertising has created a demand for

'Coca-Cola' worldwide. However, advertising has to be in line with the domestic culture. An
adapted marketing mix means adjusting the mix with the prevailing culture, geographic,
economic and other differences in different countries. Different languages and cultures
caused problems.
In addition, according to Bettman, et. al, Coca-Colas bottling system is one of their greatest
strengths. It permits them to do their business on a global scale while at the same time
maintain a national approach. The bottling companies are domestically owned and operated
by independent business people who are authorized to sell products of the Coca-Cola
Company. Because Coke does not have complete ownership of its bottling network, its main
source of revenue is the sale of concentrate to its bottlers (Bettman, et. al, 1998).
.Brand image is the significant factor affecting Cokes sale. Coca-Colas brand name is very
well known all over the world. Packaging changes have also affected sales and industry
positioning, but in general, the public has tended not to be affected by new products. CocaColas bottling system also allows the company to take advantage of infinite growth
opportunities around the world. This strategy gives Coke the opportunity to service a large
geographic, diverse, area. (Arthur A. Thompson Jr., A. J, 2005)
Now there is the threat of new vital competitors in the carbonated soft drink industry is not
very extensive. The threat of substitutes, however, is a very real threat. The soft drink
industry is very strong, but consumers are not necessarily married to it. Possible substitutes
that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and
hot chocolate.
Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the
changing health-awareness of the market could have a serious affect. Of course, both Coke
and Pepsi have already diversified into these markets, allowing them to have further
significant market shares.
The increasing health consciousness and emphasis of healthy lifestyle not only in developed
nations, but also in developing nations, have slowed down the sales of Coca-Colas
carbonated soft drinks. In response to this health consciousness issue, the company
introduced Diet Coke in 1982. Such change of consumer life style had also led to the
introduction of its bottled purified water. (Murden, Terry, 2005)
Coca-Colas brand personality reflects the positioning of its brand. The process of
positioning a brand or product is a complex managerial task and must be done over time
using all the elements of the marketing mix. Positioning is in the mind of the consumer and
can be described as how the product is considered by that consumer. When researching the
positioning of a product, consumers are often asked how they would describe that product if
it were a person. The purpose of this is to develop a character statement. This can ensure
that consumers have a clear view of the brand values that make up the brand personality,
just like the values and beliefs that make up a person. Many people see Coca-Cola as a
part of their daily life. This similarity between the brand and the consumer leads to a high
degree of loyalty and makes the purchasing decision easier.

It is of a lot importance to create the right brand image that closely in lines with the
consumers life experiences and feelings. Sponsorship is one way of building these
associations (Arthur A. Thompson Jr., A. J, 2005). Through events such as Coca-Colas
Form and Fusion Design Awards and sporting events a brand manager can ensure that its
product image is made relevant to the target audience. An element of the marketing mix that
involves making aware the customers. The promotional mix will often include sales
promotion, advertising, direct selling and public relations elements
The progress and advancement in the field of technology in the fields of soft drink raw
material, production, manufacturing, information and communication technology and logistics
have great positive impacts on the operations and sales of Coca-Cola. The availability of
new soft drink ingredients enables Coca-Cola to introduce new variety of its products to its
existing consumers, not forgetting to attract the new consumer groups. The use of the latest
information technology has made able the company to attract the new generation of soft
drink consumers with the latest features of song downloading. Also the existence of company
website has enabled the world to be in touch with the latest progress, promotions and offers
of Coca-Cola.

There are many Problems in International Business. The restraining forces slow down the progress of
companies that take up International Business. The restraining forces are :
1.

First Main Problem in International Business is Culture : The culture of the nation and the
companies should have international vision. The long term perspective of companies should be to
move wherever market opportunities are good. The inward looking culture makes companies to remain
local.

2.

Another main problem in International Business is Market Competition in Host Country : If best
global companies enter the markets, the competition goes intense and accordingly inefficient
companies have to close their shops.

3.

Another main problem in International Business is Costs : The competition calls for marketing
quality products at competitive prices. If prices are high the market rejects the products.

4.

One of the main problem in International Business is National Controls : The nation build barriers
for outside country manufacturers by increasing trade barriers. Trade barriers will be direct by way of
high customs duties. Indirect barriers will be licensing procedures, quota system , inspection,
certification and tedious paper work.

5.

Another main problem in International Business is Nationalization: Due to Ideological differences

some nations do not trade with nations of their dislike.

6.

Another main problem in International Business is War and Terrorism : The political uncertainties
and war like situation are blockages to growth of trade.

7.

One of the main problem in International Business is Shortsightedness of Management : Some

management ignores vast business opportunities across national borders. The companies do not wish
to go beyond national borders. If a company does not adapt to local conditions it does not survive.

8.

One of the main problem in International Business is Organization History : The companies who
are contended and like to remain within a nation.

9.

Another main problem in International Business is Domestic Forces : The government or social
restrictions imposed on commerce and industry become hurdle in a company going global.

10.

One of the main problem in International Business is Conflict within companies and within
international organization : Difference of opinion in strategies to be adopted between different
management levels in international business. If support is inadequate the international business
proposal fails.