Uluslararası Pazarlama IMPORTING, EXPORTING, AND SOURCING 6 lecture &8.IMPORTING,EXPORTING, AND SOURCINGEXPORT SELLING EXPORT MARKETING export marketing ……… THE INTEGRATED MARKETING OF GOODS AND SERVICES THAT ARE DESTINED FOR CUSTOMERS IN INTERNATIONAL MARKETS. export marketing An understanding of the target market 1. environment, The use of marketing research and 2. identification of market potential, Decisions concerning product design, 3. pricing, distribution and channels, ad, communications – 4 P important aspects of visiting markets Confirmation or contradiction of 1. assumptions regarding market potential, Gathering the additional data necessary 2. to reach final go or no-go decision regarding an export-marketing program, Developing a marketing plan in 3. cooperation with the local agent or distributor. trade showsorganizational export activities The company is unwilling to export, 1. The company explores the possibility of exporting, 2. The company exports to one or more markets on a trial 3. basis, The company is an experienced exporter to one or 4. more markets, After this success, the company pursues country- 5. region- focused marketing based on certain criteria, The company looking for the best target markets to 6. include in its marketing strategy and plan. TURKEY Foreign Trade Indicators 2007 2008 2009 Imports of Goods (million USD) 170,063 201,964 140,869 Exports of Goods (million USD) 107,272 132,027 102,139 Imports of Services (million USD) 14,160 16,228 14,914 Exports of Services (million USD) 28,253 34,519 32,459THE USA Foreign Trade Indicators 2007 2008 2009 Imports of Goods (million USD) 2,020,403 2,169,487 1,603,768 Exports of Goods (million USD) 1,148,199 1,287,442 1,056,895 Imports of Services (million USD) 338,759 364,930 330,759 Exports of Services (million USD) 470,790 518,316 470,217CHINA Foreign Trade Indicators 2007 2008 2009 Imports of Goods (million USD) 956,115 1,132,567 1,005,688 Exports of Goods (million USD) 1,220,060 1,430,693 1,201,534 Imports of Services (million USD) 129,254 158,004 157,500 Exports of Services (million USD) 121,654 146,446 128,700RUSSIA Foreign Trade Indicators 2007 2008 2009 Imports of Goods (million USD) 223,486 291,861 191,868 Exports of Goods (million USD) 354,403 471,606 303,978 Imports of Services (million USD) 57,684 74,572 60,126 Exports of Services (million USD) 39,119 50,694 41,901KAZAKHSTAN Foreign Trade Indicators 2007 2008 2009 Imports of Goods (million USD) 32,756 37,889 28,374 Exports of Goods (million USD) 47,755 71,172 43,189 Imports of Services (million USD) 11,370 10,794 9,502 Exports of Services (million USD) 3,242 3,936 3,615national policies governing exports and imports “ Contradictory ” Encouraging exports, restricting imports Government programs that support exports Japan Singapore • South Korea • Taiwan • Hong – Kong • …………… ..strong export-based economies Any government concerned with trade deficit or economic development should focus on educating firms about the potential gains from exporting. Policymakers should also remove bureaucratic obstacles that hinder company exports. Government programs that support exports Tax incentives, • Subsidies, • Export assitance, • Free trade zones •tax incentives Apply a lower rate to earnings from export • activities Refunding taxes already paid on income • associated with exportsubsidies Direct or indirect financial contributions or incentives that benefit producers. Total annual farm support in the EU is estimated at $100 billion. export assitance Location of markets, • Credit risks, • Export promotion, • Setting up trade fairs •free trade zones Simplified customs procedures, • Operational flexibility, • A general environment of relaxed • regulationsGovernmental actions to discourage imports and block market access Tariffs – rules, duties and regulations of • individual countries Nontariff barrier – is an obstacle to the sale of • products in foreign market Quota is qovernment-imposed limit or restriction on the numbers of units or the total value of a particular product or product category that can be imported Discriminatory procurement policies – government rules, laws, or administrative regulations requiring that goods and services must be purchased from domestic companies.Governmental actions to discourage imports and block market access Restrictive administrative and technical regulations also can create barriers to trade. (Antidumping regulations, product size regulations, safety and health regulations). Key export participants Foreign purchasing agents, • The export broker, • Export merchants, • An export management company, • Manufacturer’s export agent, • Export commission representative, • The cooperative exporter, • Freight forwarders •Sourcing Whether a company makes or buys its products as well as where it makes or buys its productsOutsorcing means shifting production jobs or work assignments to another company to cut costs. When the outsourced work moves to another country, the terms global outsourcing or offshoring are sometimes used. Today companies locate manufacturing and other activities in India, China and other low wage countries. Factors playing role in the sourcing decision: Management vision, ? Factor costs and conditions, ? Customer needs, ? Logistics, ? Country infrastructure, ? Political factors, ? Exchange rates ?management vision Some chief executives are determined to retain some or all manufacturing in their home country. factor costs nad conditions Labor costs Labor includes the cost of workers at every level: manufacturing and production, professional and technical, management. Basic manufacturing direct labor costs today range from less than $1per hour in the typical emerging country to $6 to $12 per hour in the typical developed country. Professional and technical labor : A software engineer India – $12.000 the USA - $ 80.000 factor costs and conditions Land, materials and capital costs depend on their abundance and availability. customer needs Although outsourcing can help reduce costs, sometimes customers are seeking something besides the lowest possible price. logistics In general, the greater the distance between the product source and the target market, the greater the time delay for delivery and the higher the transportation cost. country infrastructure …… .be sufficiently developed to support manufacturing and distribution. Power, • Transportations and roads, • Communications, • Service and component suppliers, • A labor pool, • Civil order, • Effective governance •“ cold chain ” – a food industry term for temperature controlled trucks and warehouses “ it takes 8 days for cargo travelling by truck between Kolkata and Mumbai to make the trip of 1,340 miles ” “ infrastructure is woefully inadequate ”political factors The less developed a country, the more difficult it is to predict political risk. Market access is another type of political factor. If a country limits market access because of local content laws, balance-of payments problems, or any other reason, it may be necessary to establish a production facility within the country itself. exchange rates 122 = 1 $ 2003 107 = 1 $ For every one yen increase relative to the $, Canon’s operating income declines 6 billion yen. Preparation for the mid-term exam Compalsory reading of chapters &1,2,4,5,6,7,8 and related case studies questions What are the basic goals of global marketing? 1. Describe ethnocentric, polycentric, regiocentric, and 2. geocentric management orientations. Describe market capitalism, centrally planned 3. capitalism, centrally planned socialism, and market socialism. What are some of the elements that make up culture? • What is the difference between a low-context culture • and a high-context culture? Give an example of a country that is an example of each type, and provide evidence for your answer. questions Describe some of the sources of political risk. 6. Specifically, what forms can political risk take? Outline the basic steps of the market research. 7. Identify the 5 basic segmentation strategies. Give an 8. example of a company that had used each one. What is positioning? Identify different positioning 9. strategies and give examples of companies or products that illustrate each? What is the difference between export marketing and 10. export selling? What criteria should company management consider 11. when making sourcing decisions?