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GMS 723 (16)
Chapter 2

GMS 723- Chapter 2- Launching a Profitable Transaction.docx

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Department
Global Management Studies
Course
GMS 723
Professor
Michael Manjuris
Semester
Fall

Description
GMS 723- Chapter 2- Launching a Profitable Transaction Commonalities of importing and exporting transaction 1. Terminology  Increasing international interdependency, trade literacy has become as important in modern business as Internet and computer literacy 2. Homework  Research is one of the keys to winning the trade game 3. Choosing the product or service  Your job will be to sell someone else’s product or service 4. Making contacts  Exporter must convince a domestic manufacturer of his or her ability to sell the manufactures product or service internationally  Importer must find an overseas manufacturer or middleman from whom to but the product or services  Contacts sourcing (finding) a manufacturer or provider of the product or service you wish import or export, Marketing (selling)  Sourcing contracts  Exporter—any product or services you select falls into an industry classification and that industry very likely has an association  Contacts for importers are slightly different to obtain  Start with the nearest consulate office and then contract that country’s international chamber of commerce  Make contacts through your embassy or through a corresponding industry association  Direct contact with the government you want to do business with  Establish communications with the overseas contact to seek further information or to ask for product samples and price  Marketing contacts—agents, distributers, wholesalers, retailers  Domestic marketing contracts—use tradeshows, direct sales, direct mail, and manufacturers representatives, as ell as swap meets, flea markets, home parties, or wholesalers  Foreign sales representative- residing in a foreign country who acts as a salesperson for a US manufacturer usually for a commission  Distributor- a firm that (I) sells directly for a manufacturer and (II) maintains an inventory of the manufacturers goods  International marketers (trader) make contracts through world trade centers (WTC), trade shows, direct sales, distributors, or an agent  Trade show- includes everything form catalog shows through local exhibits to major specialized international industry shows exhibitors offer literature and samples of their products 5. Market research  Vital to the success of your import’/ export business  Rule of thumb “if the market isn’t there, get out of the project and find another product” 6. What is the bottom line?  Profit is an internal, individualized decision that varies from product to product, industry to industry and within the market channel  Profit aspect of international trade, beginning with initial quotations The Personal Decision  Product selection selection is a personal decision—decision should make common sense  Eg) the American house painter who began making excellent profits exporting a line of automated painting equipment to Europe—he knew the equipment before he began exporting  Start your business with a product or service with which you have an advantage  Keep it simple 1 GMS 723- Chapter 2- Launching a Profitable Transaction The Technical Marketing Decisions  Product standards—ISO is an organization that harmonizes world product standards such as flammability, labeling, pollution, food and drug laws, and safety standards o ISO 9000(product registration) and ISO 14000(environmental management registration) international quality assurance series  Technical specifications and codes—most of the world uses the metric system of weight and measures  Quality and product life cycle—in the life cycle of product innovation, new products are typically introduced first to developed countries leaving an opportunity for sale od earlier models to least developed  Other uses—different countries use dome products for purposes different from those that we apply here What is world class?  There may be something as good but there is nothing better in the world Exporter checklist  Newcomers plunge into import/export without determining whether they can sell the product at a profit  Entire checklist page 22-23 Importer checklist  Entire list page 24  Answers to these questions are available through most goog libraries, your equivalent of the US department of commerce, yout chamber of commerce, or private market research companies Initial quotations  Begin with request for quotation (RFO) sent by the importer to the exporter or with an unsolicited offer from the exporter  Pro forma invoice, a normal invoice marked “pro forma” method most often used
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