International Marketing [ MMS / SEM III ]

Learning Objective
It is need of Business

Understand the international transaction flow

Understand the difference type of international trade

practices To understand the importance of International marketing . To aware you one more carrier option

Overview of our Course Content : 1. Financial Transaction between exporter and importer open account D/P , D/A , Letters of credit etc. exchange control regulations regarding export and foreign exchange expenditure on export promotion , pre-shipment and post shipment finance from banks policies of ECGC . Environment &

Mkting

Finance

regulations

2. Institutional world economy , GATT / UNCTAD Trade groups in different countries India trade relations with other countries government assistance for export

3. International marketing intelligence and task Appraising opportunities and risks product planning and development managing channels of distributions, foreign market channels & global logistics study of US America , Middle East , Africa , Canada , Latin America East , Africa , south East Asia and Europe for export potential marketing research and export promotion international marketing operations and communications exports pricing and costing case studies . 4. Export procedure and documentation registration with various agencies compulsory quality control and pre-shipment with inspection processing export orders export production procedure and packing procedure for claim of central excise duty on export goods- customs and shipment procedure duty drawback procedure to claim REP license and cash assistance 3 export houses etc. .

Logistic

Paper Pattern for Exam

Written [ 60 Marks ] 1. Question No.1 is compulsory and carry 20 marks --- Case study 2. Attempt any four from the remaining questions which will carries 10 marks each

Internal [ 40 marks ]

Books for reference .

International Marketing Onkvisit and Shaw

International Marketing Keegan

International Marketing Cotera International Marketing Bhattacharya International Marketing Francis cherunilam International Marketing Terpstra scarathy ,

Thomson south western

International Marketing
International marketing is defined as :International marketing is the performance of business activities designed to plan , price , promote and direct the flow of a companys good and services to consumers or users in more than one nation for profit

The International Marketing Environments

Foreign environment (uncontrollable) Political/legal forces

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Domestic environment (uncontrollable) (controllable)

Economic forces

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Cultural forces

Political/ legal forces

Competitive structure Competitive Forces

Price Promotion

Product
Channels of distribution

Environmental uncontrollables country market A Environmental uncontrollables country market B Environmental uncontrollables country market C
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6
Geography and Infrastructure

Economic climate

Level of Technology

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Structure of distribution

Reasons for/Motives of International Marketing : Profit Motives Growth Opportunities Domestic Market constraints Competition Government policies and regulations

Monopoly Power
Strategic Vision Spin Off Benefits

Problems in International Marketing

Political and Legal Difference Cultural difference

Economic Difference
Difference in the currency unit Difference in the Language Difference in the marketing infrastructure

Trade restrictions
High costs of distance Difference in Trade Practices

How Companies Enter in International Market ??

Export Entry Contractual Entry Investment Entry

Indirect

Direct
-Assembly -Contract Manufacturing -Licensing -Franchising -Co-production agreement -Management contract

Export Houses

Agents Joint Venture Wholly Owned Subsidiary

Commission Agent

Exporters Agent Abroad 10 Major Minor 50:50 Acquisition Open Own unit

Six steps in international marketing:

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Role of Various Parties in international transaction

Exporter Exporter's Bank Buyer/Importer Importer's Bank

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Modes of Financial Transaction between Exporter & Importer

D/P [Documents against Payments ] D/A [Documents Against Acceptance] Letter of credit Open Account

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Letters of Credit and its Parties

Letter of Credit L/c also known as Documentary Credit is a widely used term to make payment secure in domestic and international trade. The document is issued by a financial organization at the buyer request. Buyer also provide the necessary instructions in preparing the document. Applicant (Opener): Applicant which is also referred to as account party is normally a buyer or customer of the goods, who has to make payment to beneficiary. LC is initiated and issued at his request and on the basis of his instructions. Issuing Bank (Opening Bank) : The issuing bank is the one which create a letter of credit and takes the responsibility to make the payments on receipt of the documents from the beneficiary or through their banker. The payments has to be made to the beneficiary within seven working days from the date of receipt of documents at their end, provided the documents are in accordance with the terms a nd conditions of the letter of credit. If the documents are discrepant one, the rejection thereof to be communicated within seven working days from the date of of receipt of documents at their end. Beneficiary : Beneficiary is normally stands for a seller of the goods, who has to receive payment from the applicant. A credit is issued in his favour to enable him or his agent to obtain payment on surrender of stipulated document and comply with the term and conditions of the L/c. If L/c is a transferable one and he transfers the credit to another party, then he is referred to as the first or original beneficiary. Advising Bank : An Advising Bank provides advice to the beneficiary and takes the responsibility for sending the documents to the issuing bank and is normally located in the country of the beneficiary. 14

Types of Letter of Credit

1. Revocable Letter of Credit L/c 2. Irrevocable Letter of Credit L/c 3. Confirmed Letter of Credit L/c 4. Sight Credit and Usance Credit L/c 5. Back to Back Letter of Credit L/c The parties to a Back to Back Letter of Credit are: 1. The buyer and his bank as the issuer of the original Letter of Credit. 2. The seller/manufacturer and his bank, 3. The manufacturer's subcontractor and his bank. 6. Transferable Letter of Credit L/c of goods. 7. Standby Letter of Credit L/c

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Export Promotion Councils Introduction [ EPC ]

Objective of Export Promotion Councils is to promote and

develop the exports of the country. Council is responsible for the promotion of a particular group of products, projects and services. Council shall encourage and monitor the observance of international standards and specifications by exporters. Council shall keep abreast of the trends and opportunities in international markets for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports

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The major functions of the EPCs :

(a)To provide commercially useful information and assistance to

their members in developing and increasing their exports; (b)To offer professional advice to their members in areas such as technology up gradation, quality and design improvement, standards and specifications, product development, innovation, etc.; (c )To organize visits of delegations of its members abroad to explore overseas market opportunities; (d)To organize participation in trade fairs, exhibitions and buyer-seller meets in India and abroad; (e)To promote interaction between the exporting community and the Government both at the Central and State levels; and (f)To build a statistical base and provide data on the exports and imports of the country, exports and imports of their members, as well as other relevant international trade data.
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Government support to EPC

The EPCs may be provided financial assistance by

the Central Government. Registration cum-Membership : An exporter may, on application, register and become a member of an Export Promotion Council. On being admitted to membership, the applicant shall be granted forthwith Registration-cum- Membership Certificate (RCMC) of the EPC concerned, subject to such terms and conditions as may be specified in this behalf.

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BRAND PROMOTION AND QUALITY

Quality Awareness Campaign

State-Level Programmes
Test Houses Rewards And Benefits

Quality Complaints/ Disputes

Brand Promotion Bar Coding Using International Symbolizes/Numbering

System Bar Coding For Export Of Retail Products

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Pre Shipment and Post Shipment Finance

Pre Shipment Finance is issued by a financial institution when the seller wants the payment of the goods before shipment. The main objectives behind preshipment finance or pre export finance are to enable exporter to: Procure raw materials. Carry out manufacturing process. Provide a secure warehouse for goods and raw materials. Process and pack the goods. Ship the goods to the buyers. Meet other financial cost of the business.

Types of Pre Shipment Finance Packing Credit Advance against Cheques/Draft etc. representing Advance Payments.
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The post shipment finance can be classified as :

1. 2. 3. 4. 5.

6.

Export Bills purchased/discounted. Export Bills negotiated Advance against export bills sent on collection basis. Advance against export on consignment basis Advance against undrawn balance on exports Advance against claims of Duty Drawback.

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What is ECGC?
Export Credit Guarantee Corporation of India

Limited was established in the year 1957 by the Government of India to strengthen the export promotion drive by covering the risk of exporting on credit.

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What does ECGC do?

Provides a range of credit risk insurance covers to exporters against loss in export of goods and services Offers guarantees to banks and financial institutions to enable exporters to obtain better facilities from them Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan

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How does ECGC help exporters? Offers insurance protection to exporters against payment risks Provides guidance in export-related activities Makes available information on different countries with its own credit ratings Makes it easy to obtain export finance from banks/financial institutions Assists exporters in recovering bad debts Provides information on credit-worthiness of overseas buyers

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Test Question [ any Five will come in exam ] on 19.07.13 , Time : 11.15 to 12.50
1] Define International Marketing and Its Environment ? 2] What are the motive and problem in international marketing ? 3] What are the different financial modes available in international trade ? 4] What do you mean by the Letter of credit ? Explain different types of LC and its important ? 5] How companies enter into international market ? 6] What are the steps involved before enter into a international market ? 7] What are the parties involved in international transaction ? Explain with example? 8] What are the functions of Export promotional council of India ? 9] What is ECGC & explain its important ? 10] case study

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