Chapter 5 International selling

International Selling Knowledge and expertise Success depends largely on the attitude and approach of the firm and salespeople qualities (understanding and empathy of foreign market) Highly profitable, league od exporters or licensors, joint venture, subsidiary companies

Economic aspects Importing and exporting (visible & invisible - Debts) Balance of payment Trade surplus Trade deficit Reduce expenditure on imported foreign goods Sell more goods and service overseas to increase foreign revenue

International trade European union World trade organization GATT (general agreement on tariff and trade) Four fundamental principle Non-discrimination Consultation Tariff negotiation Trade liberalization

Questions Selling the company should ask five key questions: 1. How do you reach the customers? Investigate the trade structure such as wholesalers and retailers. Identify buying points. Find out about buying procedures, terms and practices, such as the preferred currency of invoicing Consider how far you need to know the local language. Examine different selling approaches, including brokers and agents. Find out how your competitors are using advertising, promotion and trade discounts.

Questions Selling the company should ask five key questions: 2. How can you sell into this market? Consider regional test marketing. Establish your sales targets. Decide on your total sales and promotion budget. Decide on your selling organization.

Questions Selling the company should ask five key questions: 3. What sales literature is necessary? Assess suitability of existing material for European markets. Consider the need to redesign to appeal to new customers. Arrange translation where necessary.

Questions Selling the company should ask five key questions: 4. How should you advertise? Examine your existing advertising. Assess differences in national media availability and costs. Decide on your advertising budget. 5. How will you provide after-sales service? Consider relative merits and costs of direct provision or subcontracting.

International selling at company level Why companies have benefits from selling overseas ??????? GENERAL REASONS Trade due to non-availability of a particular product Tarde due to international differences in competitive costs Tarde due to product differentiation

International selling at company level SPECIFIC REASONS Less vulnerable to the effect of economic recession Loss of domestic market share Faster rate of growth in demand in other markets Excess capacity in production Product obsolescence Benefits of long production run Non-availability of product in foreign market Existence of potential demand

Skills for salespeople Respect and communication verbally and non-verbally Cope with ambiguity Show empathy Avoid judging Use humor

Sales Aesthetics Religion Education Language Social organization Political factors

Cultural factors in international selling Abstract and Material Elements Abstract Value Attitude Idea Religion They are learned patterns on behavior Material Level and type of technology and consumption pattern with that society

Ethnocentricity Integration Polycentricity Responsiveness

Aesthetics A non-material cultural factor which may have an influence on the development of overseas markets. Idea concerning beauty, good taste, color and form

Religion

Education

Language literal translation by someone not familiar with its deeper cultural meaning may result in serious mistakes. If the brand name is standardized world-wide in English it may be found to have an unfavorable meaning in some countries, or not be pronounceable in languages that lack certain letters of the alphabet. Chevrolet Nova

Social organization In many Asian and African countries, social organization is in tribal groupings which may be a clue to effective market segmentation. Social class is more important and more rigid in many foreign countries. the Indian caste system.

Political factors Culture includes all activities that characterize the behavior of particular communities such as legal, political and economic factors. Nationalism and dealings with governments are often considered to be a major problem facing firms selling overseas.

General cultural attitudes and values

Cultural change

International selling Multinational marketing International marketing Indirect method Direct method exporting

International marketing Indirect Approaches Intermediary All persons and organizations providing the service of representation between SELLERS and BUYERS Agents Distributors Licensing Export Houses

Export Houses Export factoring – handling finance and credit arrangements on behalf of manufacturers. Factory representation – a sales supervisor supervising sales activities of distributors dealers on behalf of the manufacturer. Market intelligence gathering in overseas markets. Handling export procedures and documentation. Help in selecting agents, distributors and dealers. Confirming orders – paying the manufacturer on confirmation of an order from an overseas buyer and receiving commission,

International marketing Direct Approaches Subsidiary companies Direct selling Buyer-specified work Replaces agents and distributors with the company’s own permanent staff. Continuous supply. Products are technically complex with a clearly defined market Reasons : Production capacity Non-tariff restrictions. Geographical proximity Costs Few customers but large or high-value orders Explicit import restrictions. Joint ventures

Pricing What factors have effect of pricing?????

Notion effect on selling Case of Japan Describe your organization in detail. Manage meetings Japanese style. Recognize that decisions are often made by middle management. Do not push for a close. Use Japanese whenever possible. Make sales presentations low key. Establish a strong relationship. Dress conservatively.