International Sales and Distribution Management PDF

Chapter 8 INTERNATIONAL SALES AND DISTRIBUTION MANAGEMENT Distribution Management OBJECTIVES 2 To understand the required information as part of international sales team. To understand how the distribution management varies depends on the type of...

Chapter 8 INTERNATIONAL SALES AND DISTRIBUTION MANAGEMENT Distribution Management OBJECTIVES 2 To understand the required information as part of international sales team. To understand how the distribution management varies depends on the type of international countries to place. To identify the factors affecting distribution in terms of entering different countries To know the regulatories and compliance presented as to distribute products internationally. NATURE OF INTERNATIONAL MARKET Nature of international markets vary in terms of development Undevelop market: Undeveloped markets refer to economies or markets that lack infrastructure, resources, and economic development, making them less attractive to investors and businesses Highly Develop market: These markets are typically found in countries with high per capita income and stable political systems. They have mature industries and a diverse range of sectors, including finance, technology, healthcare, and consumer goods.  CHOOSING THE CHOOSING THE MARKET MARKET The size of market : The size of the market and its growth potential should be top considerations when evaluating a new market. A larger market will provide more opportunities for your business to grow and generate revenue. The language and the culture of the market: It’s important to consider whether your business will be able to effectively communicate with customers and partners in the new market. The competition on the market: assess the competitive landscape of the target market. Consider the strengths and weaknesses of your competitors, as well as any potential barriers to entry CHOOSING CHOOSING THE THE MARKET MARKET Political access: Regulations and legal requirements can vary significantly from country to country. It’s important to carefully evaluate the regulatory and legal environment of any new market you’re considering. Financial Stability: A country's GDP is another important indicator of market size. A higher GDP generally indicates a larger market with greater purchasing power. Proximity of the Markets: Consider Logistics and Infrastructure: Logistics and infrastructure are important factors to consider when expanding internationally. CULTURAL AND INTERNATIONAL BUSINESS Culture refers to the shared values, beliefs, customs, and practices of a group of people. In international business, culture encompasses various aspects, including how people think, communicate, conduct business, and consume products. It plays a pivotal role in shaping business practices and strategies, influencing how organizations interact with global markets. IMPORTANCE OF Adapt their marketing strategies to align with local CULTURE IN consumption patterns. INTERNATIONAL MARKETING Navigate cultural nuances to build strong relationships with partners and customers. Understanding culture is crucial in international marketing because it provides insights into the Avoid miscommunications and preferences, behaviors, and misunderstandings that could expectations of the target audience. harm business prospects. HOW CULTURE COMMUNICATION IMPACTS NEGOTIATION STYLES BUSINESS DRESS CODE PRACTICE? TIME MANAGEMENT Culture influences multiple aspects of international FORMALITIES AND business, such as: COURTESIES RISKS INVOLVED IN DOING BUSINESS INTERNATIONALLY THE THREE MAIN RISKS INVOLVED IN DOING BUSINESS INTERNATIONALLY ARE: POLITICAL RISKS COMMERCIAL RISKS FINACIAL RISKS SELLING IN INTERNATIONAL MARKET Trade between countries occurs because of following reasons: A particular product is unavailable. There are cost advantage by buying the product instead of manufacturing locally. The product offered is differentiated from the local product. SELLING IN INTERNATIONAL MARKET A company may decide to sell its product in international market due to one or more of the following reasons: It has a good market domestically where the growth is limited. International market offer large and profitable opportunities. The company has excess capacity, which the domestic market cannot absorb. SELLING IN INTERNATIONAL MARKET The company has a considerable cost advantage over its international competitors. The company foresees increased competition in the domestic market and seeks to mitigate the risk by diversifying. ENTRY STRATEGIES FOR INTERNATIONAL MARKET Home Market Production Foreign Production Direct export Indirect export -Licensing -Agent -Trading Company -Franchising -Distributor -Export Management -Joint venture -Government Company -Contact manufacture -Overseas subsidiary -Piggyback -Export Processing Zone -Countertrade ASPECTS OF DOING INTERNATIONAL BUSINESS Many global businesses succeed by expanding their markets, production operations, and supply chains internationally. But doing so requires savvy business leadership strengthen by economic knowledge, an understanding of markets, and the ability to learn political and cultural trends. LEGAL ASPECTS OF INTERNATIONAL BUSINESS Knowledge of law that prevails in case of a dispute Protection of intellectual property rights Method of doing business in the destination country PROFILE OF INTERNATIONAL SALESPERSON International salesperson need to have the following qualities: The ability to speak in one or more international languages The ability to adapt to foreign culture The ability to act independently and decisively A pleasant and amiable personality The ability to understand not only the product and pricing, but also financing of the sales, instrument of payment, and foreign exchange risk DISTRIBUTION CHANNEL IN DOING BUSINESS INTERNATIONALLY The type of distribution channel chosen depends upon the nature of the product and its positioning. The image of the product get enhanced and diminished. TYPES OF DISTRIBUTION CHANNEL 1. INTENSIVE DISTRIBUTION - The use of all available outlets to distribute a product. 2. SELECTIVE DISTRIBUTION - Only some available outlets in area are chosen to distribute a product 3. EXCLUSIVE DISTRIBUTION - A situation in which only certain dealers are allowed to sell a certain product. ROLE OF DISTRIBUTION IN DOING BUSINESS INTERNATIONALLY Role of distribution becomes more important at global level due to: These markets are usually at a distance from the manufacturing base It takes considerable amount of time to transport the products Involves crossing national boundaries completion of a number of procedures and formalities.  PRICING AND PAYMENT IN INTERNATIONAL TRADE PRICING AND PAYMENT TERMS IN INTERNATIONAL TRADE pricing of products for the international market can be done on various terms. EX WORKS- process of the product at the manufacturers factory gates FOT( free on truck)- process of the product, packed, palletised and containerised( where applicable ) and loaded on a truck at the manufacturers factory gates ( including the Loading charges) FAS ( free alongside )- at the quay beside the ship including the port charges and not including the loading charges FOB (FREE ON BOARD) - the price of the product packed, palletised and containerised ( where specified ) and located on the ship ( including all the shipment port charges and loading charges ) C&F ( cost and freight )- FOB price of the product plus the cost of the freight to the destination ( it could be a port an inland warehouse/ factory premises) but not including the charges at the discharge port and import duties and local taxes which may be applicable. CIF ( COST, INSURANCE AND FREIGHT)- C&F price plus the insurance charges from the manufacturer factory to the final destination ( either a port or the importer warehouse inland) including Marine insurance.  CURRENCY IN PRICING EXPORTS ARE NORMALLY PRICED IN HARD CURRENCY-THE MOST COMMON BEING THE US DOLLAR. EXPORTS CAN ALSO BE PRICED IN EUROS OR JAPANESE YEN OR EVEN INDIAN RUPEES. ONE OF THE RISKS INVOLVED IN INTERNATIONAL BUSINESS IS THE FLUCTUATION OF THE VALUE OF CURRENCY OF PRICING WITH RESPECT TO THE LOCAL CURRENCY. PACKING AND SHIPPING Culture refers to the shared values, beliefs, customs, and practices of a group of people. In international business, culture encompasses various aspects, including how people think, communicate, conduct business, and consume products. It plays a pivotal role in shaping business practices and strategies, influencing how organizations interact with global markets. MARKET INTELLIGENCE AND RESEARCH Global markets are a global trade and economic system in which goods, services, investment and capital move freely across national borders. Companies in global markets can sell their products to various countries, source raw materials from around the world, and invest in foreign markets. International financial markets are also part of the global market, where currencies, shares are stored without geographical restrictions  @reallygreatsite THANK YOU