International Marketing Chapters 14 International Marketing Channels.
International Marketing Channels
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Transcript of International Marketing Channels
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ChapterChapterChapterChapter
International Marketing Channels
8.02 Exporting and Logistics8.02 Exporting and Logistics
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Warmup--Logistics
Connect to each of these videos (in order) to use as a warm-up (approx. 20 min.):
http://www.youtube.com/watch?v=qDbnx6nLrQo&feature=related
http://www.youtube.com/watch?v=Wlrf32iU9pc&feature=relmfu
Chapter 8Slide 2
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Chapter 8Slide 3
Lesson 8.2
Exporting and Logistics
Goals Explain what is involved in the
exporting process. Discuss the importance of having an
efficient logistical system.
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Chapter 8Slide 4
Terms exporting importing indirect exporting direct exporting customs customs broker intermodal transport
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EXPORTING
Exporting The process of shipping a product to
another part of the world for trade or sale Includes:
Identification of customers Preparing products for shipment Arranging documentation Clearing customs Planning shipping/delivery of products
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EXPORTING (continued)
Indirect exporting For a company not fully committed to
international marketing Uses a broker or agent to help find
customers and export products Extra middle-men can increase total cost
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EXPORTING (continued)
Direct exporting For a company fully committed to foreign
markets a company actively controls finding markets and
exporting products
Importing receiving products exported from another
country
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Export trading company Buy and sell products Conduct market research Overseas distribution Provide funding and financing Coordinate shippers, suppliers, and manufacturers
International freight forwarder Travel agent for cargo Ships products directly to foreign customers
Intermediaries that assist in exporting:
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Documentation for clearing customs Customs
immigration control for products entering the country
Inspect shipments to insure proper documentation
Collect customs fees Insure restricted products do not enter
E.g., dangerous items, embargoed products, fake products, endangered species products
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Documentation for clearing customs (cont.) Customs broker
An intermediary that specializes in moving products through customs
Licensed by U.S. Department of Treasury May also work with Dept. of Agriculture,
Environmental Protection Agency, or Food & Drug Administration
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Documentation requirements
Bill of lading Issued by carrier (transporter) to shipper
(exporter) acknowledging receipt of goods Describes type and quantity of goods Describes how goods will be shipped Identifies destination http://www.youtube.com/watch?v=nmosREOfkXw Bill of lading video
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Documentation requirements
Certificate of origin Document that identifies the country in
which exported goods are obtained, produced, or processed
Helps determine import duties or whether the products may be legally imported, depending on country of origin
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Foreign Trade Zone
Foreign Trade Zone (FTZ) an area designated by a country as a
specialized zone where products may be exempt from duties
Products in FTZ’s may be stored, modified, displayed without paying duties
Products exported out of FTZ’s no import duties are paid where the FTZ is located
http://www.youtube.com/watch?v=uFxTKV7_LLM http://www.youtube.com/watch?v=w2rmuKHlU3A Foreign trade zone videos and china
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INTERNATIONAL LOGISTICS
Logistics involve the transportation and storage of products between producer and consumer
Modern technology makes logistics easier than in the past: GPS allows ships to avoid bad weather Easy to track individual shipments
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Logistics and the Total Cost Concept Transportation costs are a major portion of
total exporting costs Other cost factors to consider:
Products shipped by water or land arrive with less certainty than by air Greater chances for spoilage, loss, or obsolescence Warehousing and insurance costs may be higher Air freight enhances security, limits shipping time,
assures faster delivery
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Logistics and the Total Cost Concept Other costs factors to consider (cont.):
Free on board (FOB)—determines where the shipper pays the transportation costs FOB destination—seller pays shipping costs to
the buyer’s delivery point FOB Origin—buyer pays shipping costs from
the seller’s departure point May include cost, insurance, and freight (CIF)
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Transportation Modes
Water transportation Within a continent—utilize rivers and lakes Cargo containers used for overseas
shipping Good for bulk items such as grain or
minerals Half of all U.S. imports arrive via cargo
container—over 9 million containers yearly
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Transportation Modes
Air cargo Containerized jumbo jets can carry over 90
tons Costs are higher than other transportation Fast delivery avoids need for warehousing Less opportunity for theft
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Transportation Modes
Land transportation Two main modes: rail and truck Rail typically used for bulk products Usually require land connections to air or ferry Long-distance land shipments increase
chance of loss, damage, delivery uncertainty
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Transportation Modes
Pipelines Primarily for energy-related products (oil
and natural gas) Coal can also be put into a liquid mixture
(slurry) and shipped through pilelines
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Intermodal Transport
Intermodal transport involves a combination of transportation modes. Fishyback
Containerized shipping between trucks & ships
Piggyback Shipping between truck and rail
Birdyback Shipping between truck and air cargo