lOMoARcPSD|3707525

Summary International business (Book + Lectures)

International Business Operations (Avans Hogeschool)

StuDocu is not sponsored or endorsed by any college or university

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)
 lOMoARcPSD|3707525

Summary International business (Book+Lectures)

Chapter 2: Bases of international marketing

Internationalization is not only sales (export activities) in foreign countries. It is a

process of increasing involvement of enterprises in international markets in terms of:
- Sales
- Procurement
- Hiring
- Outsourcing
- HRM
A company is international when decisions are made on the basis of a comparative
advantage worldwide. They have strong internal belief. They sell, market and
manufacture in many countries (minimum of 18).

Potential benefits from Export marketing

The benefit of international trade to a country is determined by its impact on
consumption and production. Active trade relations among countries create employment
opportunities, and consumers gain as employment is their source of purchasing power.

Effects of imports
To economists the real benefits lie in importing rather than importing. Potential benefits
of imports are:
- Lower prices; due to lower domestic costs
- Increase in supply
- Increase in variety of goods
- Acquisition of technology to add innovations via:
• Import directly technology
• License technology
• Foreign direct investment; multinational company can
establish production facilities within its borders.
However, in order to pay for imports there must be a capital outflow. This has a negative
effect on a country its balance of payments, and also a reduction in the amount of
foreign exchange available for other needs.

Effects of exports
In order to finance imports that it does not affect a country its balance of payments, a
country must export. Benefits are:
- Selling abroad helps to gain economy in production at home.
- Lower prices for consumers of domestic products.
- It helps individual firms to improve its competitive position, and diversify the risk.
- In times of recession, exports can have a softening effect.

Increasing productive and efficiency

Trade is a way to increase or even maximize productivity. Methods of production and
marketing are changing constantly.
Technology transfer can be viewed as the sending of new products, processes, and
production inputs from one country to another.
Countries may also benefit by employment opportunities for its citizens, housing,
schools, and management development programs.
With industrial change international trade becomes a potential engine of progress.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

International trade theories

A number of theories have been developed to explain the patterns of trade among
countries and how the benefits of trade are distinguished.
1. Classical theory: Demonstrates with fairly simple 2-country, 2-product models the
conditions under which both countries in a trading relationship benefit.
2. The factor proportion theory, which offers an explanation for the differences in
comparative costs between trading parties.
3. The product life-cycle theory which attempts to explain why international trading
patterns began to change in the 1960s.

The classical theory of trade

The concept of economic advantage states that countries tend to specialize in those
products in which they have an advantage namely, lower cost of production. This simply
means that a country produces for domestic consumption and for export those products
that it can acquire more cheaply from abroad. There are three international differences in
costs that must be considered.
1. Absolute differences
Absolute advantage exists when one country has a cost advantage over another country
in the production of one product, while the second country has a cost advantage over the
first in producing a second product. Cost differences exist because productivities of factor
inputs represent major determinant of production cost in different countries.
2. Comparative differences
Trade will be beneficial if the domestic exchange ratios in each country are dissimilar; in
other words, if the country with the absolute advantage has a greater advantage in
producing one product than it has in producing another. This is called comparative
advantage. A country benefits by specializing in and exporting the product in which it has
the greatest advantage, and importing the product in which it has less advantage.
3. Equal differences
A condition of equal advantage exists when one country has an absolute advantage over
another in production of all products but no superior advantage in the production of any
one product.

The factor proportion theory

A nation will export that product for which a large amount of the relatively abundant
input is used, and it will import that product in the production of which the relatively
scare input is used.
The principal explanation for t he pattern of international trade lies in the uneven
distribution of world resources, among nations, coupled with the fact that products
require different proportions of the factors of production.

The product life-cycle theory

The product life-cycle theory is a useful model for explaining not only trade patterns of
manufacturers, but also multinational expansion of sales and production subsidiaries.
According to this theory products, certainly electronic products undergo a trade circle.
During the process, the innovator (exporter), loses competitive advantage and may
eventually become an importer of that product.

Innovator Mature Decline

Exports
Growth Relocate Monopoly breaks
Export to foreign production down
high developed
markets Closer foreign Imitation of
country
Similar countries market production
Small home
mass-production mass-production innovator loses
market
in foreign market competitive adv.

The process is complete when production becomes standardized

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Export behaviour theories and motives

Contemporary international business theory development considers exporting as a
continuous process with the firm gradually increasing its level of foreign involvement and
commitment.
Export behaviour theories tend to explain why and how the individual firm is engaged in
export activities and how dynamic nature of such activities can be conceptualized. They
focus on strategies and motives for exporting.
Motivations for exporting:

1. Increasing market share

2. Return on investment
3. Learning of the organisation
4. Location advantages
5. Bandwagon effect one firm internationalises, so others follow
6. Competition from abroad
Reasons for internationalisation

Internal external
Proactive Managerial urge Foreign market
opportunities
Marketing advantages Change agents
Economies of scale
Unique product/technology
competence

Reactive Risk diversification Unsolicited orders

Extend sales of a seasonal Small home market
product
Excess capacity of Stagnant or declining home
resources market
Backup Lecture week 2

Globalisation, internationalization and standardization

There are 2 perspectives for looking at internationalization:

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

1. Global convergence perspective Globalisation

There are several key performance indicators for global standardization

- The existence of a global market segment.
- Potential synergies from standardization.
- The availability of a communication and distribution network to deliver goods to
target segment.
- Customer needs and interests are becoming homogenized
- People will sacrifice quality preferences for price.

Globalisation is driven by several factors

- Economies of scale in production/purchasing
- Learning efficiencies (if conducted properly)
- Lower transportation and distribution costs
- Reduced cost of products adaptation
- Emergence of global market segments
However, not everybody is happy with globalization. There are several restraints
against it:

2. International diversity perspective

If cultural differences are used and favored:
- Products can be the same, usage different
- People are different so do markets
- Multinational Companies follow this perspective, with also a different Corporate
Structure.
- Prices tend to be higher because of this respect to the differences
For accomplishing international diversity three different strategies can be chosen.
Type of Corporate Strategy selected will have an impact on the selection and
implementation of the business-level strategies.

1. Multi-domestic strategy: Assumes that markets differ by country/regions.

i. Strategy and operating decisions are decentralized to strategic
business units (SBU) in each country.
ii. Products and services are tailored to local markets.
iii. Business units in each country are independent of each other.
iv. Focus on competition in each market.
2. Global strategy
i. Products are standardized across national markets.
ii. Decisions regarding business-level strategies are centralized in the
home office.
iii. Strategic business units (SBU) are assumed to be interdependent.
iv. Emphasizes economies of scale.
v. Often lacks responsiveness to local markets.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

3. Transnational strategy: Need to be able to identify global possibilities and be

flexible enough to gain local advantages.
i. Seeks to achieve both global efficiency and local responsiveness.
ii. Difficult to achieve because of simultaneous requirements for strong
central control and coordination to achieve efficiency and local
flexibility and decentralization to achieve local market
iii. responsiveness.

Advantages: - More efficiency in the organisation

- Responsiveness to customer
- Learning of the organisation
- Strong sensory abilities based on strong country management
- Capable global management to provide coordination.
- Influential functional management to facilitate learning and knowledge
sharing.

Overview of entry modes and strategies

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Chapter 4: The international environment: government, political and

legal forces

The political/legal environment operationally equates with government although political

philosophy and beliefs that may affect behaviour of business firms may not be part of
formal government policy.

As an environmental force affecting international/export marketing, government

intervenes in a single country’s economy by being a participator, planner, controller or
stimulator. Such intervention is categorized in 3 groups:

1. Promote international/export marketing

2. Impede such transactions
3. Compete with or replace international/export marketing transactions by private
business firms.

Government controls
Many government-derived impediments to international marketing in general, are in the
form of restrictions and controls. There are different kinds of restrictions and controls
that are specifically concerned with exports and imports. Export controls are intended to
restrict the shipment of defence products, protect the domestic economy from a drain of
scarce materials, and enhance national security.
Several internal and external constraints against globalisation are given below:

External Internal
Governmental and institutional Existing international operations
constraints (China)
Tariff barriers and duties (US vs Europe) Local management motivation and
attitudes (‘Us against Them’)
Preferential treatment of local firms Lack of power: money other resources
(Worldwide)
Transportation costs Lack of knowledge and willingness of HQ
Management Team
Differences in customer demand
Anti-globalists movement, Slow food
Movement
Differences in marketing infrastructure

License requirements
One way in which various countries regulate the nature of their external trading
relationships is by requiring that licenses be obtained before goods may be exported or
imported.

Tariffs
A tariff is a tax on imports, and is stated either as a percentage of value or on a per unit
basis. The purpose of imposing tariffs for a country are to keep out certain products or to
generate tax revenue. A protective tariff may also be simply to bring the price level of
imported goods up to that of domestic substitutes. Revenue tariffs are often quite low
because they are only designed to maximise revenue for a government.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Countervailing duties are a more permanent kind of surcharge. These may be assessed
to offset some special advantage or discount allowed by the exporters’ government. The
purpose is to protect the country of importation up to the originally intended level.
antidumping measures are taken against dumping which is selling in a foreign market at
a significantly lower price than on the domestic market, or below cost price.

Quotas
Quotas are provisions limiting the amount of foreign products that can be imported. 3
categories:

1. Absolute quotas limit the absolute amount.

2. Tariff quotas permit importation of limited quantities at low rates of duty.
3. Voluntary quotas also know as voluntary export restraints (VER’s) and are to
protect domestic companies until they have had time to make adjustments to
regain external competitiveness.

Extra taxes
some countries have excise or processing taxes on certain products. They are officially
meant to provide government revenues, but they can also restrict imports and thus
affect the exporter.

Border taxes are also very important to international marketers. These are levied on
imports by European countries, which are in addition to tariffs. They are intended to
place a tax burden on imports. The rate is normally equal to the amount of internal
excise and other indirect taxes paid by domestic producers of competing products. The
idea is to put local goods and imports on the same level of competitiveness.

Qualitative controls
These controls limit the profitability of exporting. However, foreign products can be
imported with few exceptions provided that the seller is willing to accept a lower net
return and/or the buyer pays a higher price. In this case they are far less restrictive.

Exchange controls
Government control over the supply of , or demand for, foreign currencies can be used
effectively to restrict international/export marketing, exchange controls limit the amount
of foreign currency that an importer can obtain to pay for goods purchased and that an
exporter may receive and hold for goods sold to a foreign country.

Other types of legal/regulatory activities

In addition to regulating trade, government also regulates other business activities.
Major concerns include the environment, labour rights, intellectual property, tax policy,
antitrust, and corruption.

Environment Kyoto protocol

Labour rights Labour standards; child labour, safety, respect, working hours, wages
etc.
IPR Patents, copyright laws etc.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Promotional activities
The policies and programs adopted by governmental organizations to promote exporting
are an increasingly important force in the international environment.
Governments promote international marketing trough so called regulatory supportive
activities. These are political and legal jurisdiction.
With respect to exporting, two types of government activity are of special significance:
trade trading and granting of subsidiaries. When engaging in state trading, a government
either directly involves itself in business transactions through buying and selling or
regulates export activities. Government export promotion programs; and programs for
international marketing activities are designed to deal with the following major barriers.

1. Lack of motivation; international marketing is more time consuming, costly, risky

and less profitable.
2. Lack of adequate information
3. Operational/resource-based limitations

These programs are quite popular among developing countries. They are known as Trade
Promotion Organisations (TPO’s).

Financial activities
A national government plays the role of international banker through membership in
international financial organizations, such as the World Bank, and by granting legal
subsidies. Some also grant direct loans.

Information services
The following kinds of information are available:
1. Economic, social, and political data on individual countries, including the
infrastructure.
2. Individual reports on foreign firms
3. Specific export opportunities
4. Lists of potential overseas buyers, distributors, agents for various products in
different countries
5. Summary and detailed information on aggregate international marketing
transactions
6. Information on relevant government regulations both at home and abroad
7. Sources of various kinds of information not always available from the government
8. Information that will help the company to manage its operation

Export facilitating activities

1. There are a number of government activities for stimulating exporting:
2. Operating trade development offices abroad, either as a separate entity or as part
of the normal operations of an embassy or consulate.
3. Sponsoring trade missions of business people who go abroad
4. Operating trade fairs and exhibitions
5. Operating permanent trade centres in foreign market areas.

Somewhat related to these activities are the government authorized free trade zones,
which is an enclosed, policed area without resident population in, adjacent to, or near a
port of entry. A free port encompasses a port or entire city isolated from the rest of the
country for customs purposes. Finally, a free perimeter is similar to a free port in the
kinds of activities allowed, but is generally confined to a ‘remote’ underdeveloped region.
Some developing, and newly industrialized, countries have established export processing
zone (EPZ’s).

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Economic integration
Economic integration means the unification in some way of separate individual economies
into a larger single economy. It goes beyond purely economic issues, and involves socio-
cultural and political-legal matters as well.

Characteristics of economic integration

Characteristics Free Customs Common Economic Political

trade union market union union
Removal of internal X X X X X
tariffs
Common external tariffs X X X X
Free flow of capital and X X X
labour
Harmonization of X X
economic policy
Political integration X

Free trade area European Free Trade Association (EFTA)

Association of Southeast Asian Nations (ASEAN)
Central American Integration System (SICA)
Customs union Benelux
Common market European Union (EU)
Economic Union Closest is the European Union
Political Union The British Commonwealth of Nations can be viewed as a voluntary
union.

Chapter 5: Market selection: Definition and strategies

An important step in formulation an international marketing strategy is the Export

market selection. This is the process of international marketing strategy is selection of
foreign markets in which to compete. A second decision in marketing strategy, closely
related to market selection is, export market direction.
Together with strategies for and choices of market entry and operating decisions, market
selection and direction are perhaps the most aggregate of export marketing issues.
Segmentation, positioning and differentiation are some of the traditional analytical tools
applied in developing the marketing mix. For both market selection and direction the
importance of analysis cannot be stated too strongly. This analysis requires an internal
and external analysis.

Market definition and segmentation

Market definition is not a mechanical exercise, but a crucial and complex component of
export marketing strategy. Correct market definition is obviously important for the
measurement of share and other performance indicators.
Issues of market definition lead to issues of market segmentation. This is the process of
dividing markets into segments which will be targeted by different sales / marketing
strategies. What are necessities for a segment?:
1. Measurability of the segment
2. Accessibility
3. Profitability
4. Actionability
A major strength of market segmentation is that it can generate specialization. At the
same time segmentation involves, costs, risks, and possible weaknesses in some cases,
especially where accessibility is not easy.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Export marketing segmentation

Because of differences in the economic, cultural and political environments export
markets need to be segmented. International markets tend to be more heterogeneous
than domestic markets. The success of segmentation depends heavily on the choice of
variables by which to perform the segmentation. It is important to note that any decision
to segment on a particular basis should be evaluated in terms of the following:
1. Measurability
The degree to which a segment can be identified and to which the size and
purchasing power of the segments can be measured.
2. Accessibility
The degree to which the resulting segments can be effectively reached and
served. In export marketing, communication problems pose distinct difficulties in
reaching the end user because of, inadequate language skills, nationalistic
attitudes, the difficulty of understanding a foreign market media system.
3. Profitability
The degree to which the resulting segments are large and/or profitable enough to
be worth considering for separate marketing attention. In export marketing there
can be excessively high costs involved in segmenting markets because of
necessary adaptation to local markets’ specific needs and demands.
4. Actionability
The degree to which effective programs can be formulated for attracting and
serving the segments.

Bases of segmentation
A classification scheme of various bases for export market segmentation is shown below:

General market indicators Specific product

indicators
Country market - Demographic and population Economic and legal
level characteristics constraints
- Socio-economic characteristics Market conditions
- Political characteristics Product-bound culture and
- Cultural characteristics lifestyle characteristics
Customer market Demographic characteristics: Behavioural characteristics:
level Age, gender, Consumption and use
Life cycle, religion, patterns
Nationality etc. Attitudes, loyalty,
Socio-economic characteristics: patterns, benefits
Income, occupation, Sought etc.
Education, etc.
Psychographic characteristics:
personality, attitudes,
lifestyles
There are 4 possibilities to grow based on the 4 necessities:

• Increase Usage - get extra market share from existing customer base: Mars King
size
• Develop Products - grow market potential via product innovation: Mars Ice Cream
• Widen Activities - find new markets around core activities: Mars in Pet food
• Extend Markets - find new users for existing basic offerings: Mini Mars bars in
bags in supermarkets

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Market selection process: reactive vs. proactive approaches

Reactive Passive strategy, waiting to be approached by foreign representatives. Pure

luck or history determines success (unsolicited proposal). The process is very informal,
unsystematic and purchase oriented.

Proactive Marketing and /or sales oriented, actively seeking business in foreign
markets. Choice also depends on effects ‘Psychic Distance’ (a managers’ state of mind
that resents other cultures and prevents companies form expanding to those countries).
A more formal approach to the process.

There are no clear cut divisions between the reactive and proactive approaches since
many exporters will tend to apply the proactive strategy to what are considered primary
markets and the reactive strategy to what the company considers to be secondary or
marginal markets. Studies have shown that most managers are influenced by several
things:

• Psychic distance – uncertainty about foreign markets and perceived difficulty of

finding information about them.
• Cultural distance – differences between the manager’s own and the destination
culture.
• Geographic distance – proximity

Market selection procedures: expansive vs. contractible methods

Expansive Build market based on similarities in cultural, social, economic and

political environments between existing market and potential new markets (‘nearest
neighbor approach’, ‘Oil-spot’ approach).

Contractible Start with the total number of possible markets and then use screening
to eliminate markets with less potential. These are selected by the so called ‘knock out’
factors that have to be stipulated. These are:
1. General market indicators
2. Specific product indicators

The overall approach seems complex, but it only contains three stages:
1. Preliminary screening criteria for examining countries are identified. Result is a list
of feasible countries.
2. Determine which country characteristics are to be used in evaluating marketing
opportunities and how each should be weighted. 4 types of variables are
investigated: Operating risks, market potential, costs and potential local and
foreign competitors.
3. Countries are evaluated on the basis of the criteria selected in the second stage,
and they are rank ordered on the basis of scores derived.

The end result is an ordering of countries such that a number of these can be selected
for further in-depth analysis.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Market selection strategies: Market spreading vs. Market concentration

The major strategic alternatives of market expansion are market concentration and
Market spreading.
The choice of a market expansion policy is a key decision in export marketing and in
other international marketing modes as well.

Market Spreading
Fast growth in the number of markets served by the company. This strategy is
characterized by allocating marketing resources over a large number of markets in an
attempt to reduce risks of concentrating resources and to exploit the economics of
flexibility. Aim: quick and full force entries. - Short PLC, Hypes,
- Standardized products
- Creating entry barriers for competitors
Example: TomTom, Apple I-Pod

Market Concentration
Slow and Gradual growth in the number of markets served by the company. This
strategy is characterized by channeling available resources into a small number of
markets., devoting high levels of resources to grab market share in each market. After
building strong positions in existing markets the company slowly expands to other
countries or customer segments.
Aim: long term, fewer markets, high market shares).
- Awareness of risk is high
- Acceptance of risk is Low
Example: Starbucks, Wal-Mart.

Factors favouring Market spreading vs. Market concentration

Factors favouring market spreading Factors favouring market concentration

Company factors Company factors
High management risk consciousness Low management risk-consciousness
Objective of growth through market Objective of growth through market
development penetration
Little market knowledge Ability to pick ‘best’ markets
Product factors Product factors
Limited specialist uses General uses
Low volume High volume
Nonrepeat Repeat-purchase product
Early to late in PLC Middle of PLC
Standard prod. salable in many markets Prod. requires adaptation of different markets
Market factors Market factors
Small markets – specialized segments Large markets – high volume segments
unstable markets Stable markets with limited nr of comparable
Many similar, new or declining markets markets
Low growth rate, but large competitive Mature markets with high growth rate
markets No excessive competition, but many
Competitors have large share competitors
Low source loyalty High source loyalty
Marketing factors Marketing factors
Low communication, handling, and High communication, handling, and physical
physical distribution costs distribution costs
Standardized communication Communication requires adaptation

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Foreign market portfolios: Technique and analysis

Portfolio analysis is an excellent technique to evaluate the degree and nature of a
company’s involvement in international markets, where opportunities for improving
profitability by reallocating resources and efforts across countries, product lines, and
modes of operations.

Standardized approach to portfolio analysis

The BCG approach to product portfolio analysis is the best known and the most widely
used of these models. The BCG portfolio analysis centres on two determinants of
marketing strategy:
- Market strength: The relative market share
- Market attractiveness: Market growth rate
In a formalized product portfolio analysis each product in the portfolio is represented
graphically on a relative market share/growth matrix by a circle.

The matrix: Using the variables country attractiveness and competitive strengths, and
some scheme for weighting them, countries are placed in one of the nine boxes depicting
the relative market investment opportunity.

Country Attractiveness Competitive strength

(External) (Internal)

Market Size Market Share

Market Growth Marketing ability
Market Seasons and Fluctuations Production capacity
Competitive Conditions Product fit
Market Prohibitive Conditions Product quality
Economic and Political Stability Contribution margin
Image of brand/product
Technology Position
Market Support
Quality of Distributors

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Invest/grow countries: These call for company commitment to a strong market position.
(High country attractiveness and high competitive strengths)

Harvest/divest/license/combine countries: These often call for strategies to harvest

profits or sell the business. Any cash they generate will be required to maintain share.
(Low country attractiveness and low competitive strengths)

Dominate/divest countries: These present a particularly difficult strategic choice because

the firm is competitively weak but the market appealing. Movement towards a stronger
market requires long-term cash flow deficits. The decision demands a careful analysis of
cash requirements and cash availability. (High country attractiveness and low competitive
strengths)

Selectivity countries: In some situations products in these sections generally are perfect
candidates for milking. They produce strong cash flows, however their market share is
difficult to maintain. (Medium country attractiveness and medium competitive strengths)

Chapter 6: Information for international market(ing) decisions

A basic ingredient of any market selection program is the availability of market

information. When selecting new markets, and to support ongoing decisions, many
companies have developed marketing decision support systems. Such a system should
be able to provide data that are:
• Relevant; have meaning
• Timely; current and available quickly
• Flexible; available in the forms needed by management
• Accurate; valid information
• Exhaustive; Tactics and strategies can be affected by many things
• Convenient; access and use must be relatively easy to accomplish

An integral part of any international marketing decision support system is an

international marketing information system. The major issue is the collection of
information. Steps in the international (export) marketing research process:
1. Problem definition / formulation Translating the management problem into a
research problem. Understanding the nature and origin of the problem.
2. Determine information requirements Establishing investigative methods. Look
at the scientific model.
3. Develop and design research plan Which method is appropriate? Experimental
research and non-experimental research are two methodologies used to answer
the research question.
4. Collect the data – (multiple research methods) Limitations of this data are:
Availability, reliability, and comparability. Carrying out the techniques selected
for collecting data. In general data collection uses communication or observation.
5. Keep all data available to persons authorized (also your export assistant)
6. Analyze and interpret the data data must be edited, coded and tabulated.
7. Choose a country or multiple countries (Sample design) Practical
considerations dictate that a sample or subset of the relevant population will be
used. Researcher should determine 3 things: (1) Where the sample is to be
selected, (2) The process of selection, (3) The size of the sample.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

For sampling in multiple countries there are 4 different types of international

marketing research:
1. Descriptive research: Understanding behaviour and the
market environment in a single country.
2. Comparative research: Comparing attitudes, behaviour
etc. In two or more countries.
3. Contextual research: Studying cross-national groups.
4. Theoretical research: Theories, models methods etc.
8. Present the findings - report / and get support recommendations for courses of
action should be formulated clearly.
9. Follow your findings rigorously and do not deviate
10. Reflection + feedback
11. Start all over if necessary

Issues of concern
There are a number of conceptual, methodological and organizational issues that impede
data collection:
• The complexity of research design
• The lack of secondary data available for many countries and product markets
• High costs of collecting primary data
• Problems associated with coordinating research and data collection in different
countries
• Difficulty of establishing the comparability and equivalence
• Intrafunctional character of many export and marketing decisions
• The economics of export marketing decisions

Sources of information

Internal sources of information External sources of information

Within company, sources such as Sources outside the company (primary and
salespeople secondary)
Easy WTO, Banks, Competitors, UN, IMF
Cheap Commercial Agencies (Nielsen, GFK)
Reliable Chambers of Commerce, GO & NGO
But, do you get all the info needed? Newspapers and others

Assessing market potential

The amount of a product that the market can absorb over some indefinite time period
under optimum conditions of market development. Equation: The purchase rate times
number of possible users.
Secondary data are often used to estimate the size of potential foreign markets. A
number of techniques are available. These are:
1. Demand pattern analysis Examination of industrial growth patterns in an
industry.
2. Income elasticity measurements The relationship between demand for a
product and changes in income in a country.
3. Lead-lag analysis Based on the use of time-series data. Assumes that
determinants of demand in the two countries are the same.
4. Estimation by analogy A single-factor index with a correlation value obtained in
one country applied to a target export market.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

5. Multiple-factor index Estimates demand by using two or more surrogate

variables that are related to potential market demand for the product of concern.
6. Regression analysis One or more predictor variables are used to estimate the
demand.
7. Cluster analysis Finds groups of countries that are similar. Then potential is
known for one or more countries in a cluster.

The share development tree is compound by using the 4 P´s and service strategies.

Market potential and current demand

Untapped market opportunity: Demand that has not been met by an existing product or
brand, or a market that could use an existing product in an innovative way.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

What percentage of potential market share performance can be achieved (put in other
words, what is their share development index), given its full effectiveness of its delivered
international marketing strategy.

International marketing strategy at each step along the share development path:

Current market share

SDI = x 100
Potential market share

Chapter 7: Market entry strategies

A market entry strategy consists of an entry mode and a marketing plan. Many factors
can have a major impact on market entry mode choices. The following antecedents had
an impact:
1. Market attractiveness
2. Uncertainty in the host country (risk)
3. The legal environment in the host country
4. The culture of the home country

International marketing channel system

A company’s international marketing channel is the path in the structure of distribution
through which the products of the company reach the final consumer or user.
In developing its entry mode a company must plan for the flow of two things that are
involved when its products pass through the structure of distribution. Plan the flow of:
1. Transactions = flow of ownership (financial)
2. The physical product = series of physical movements and storage points
(logistics)
Many specific types of organizations are involved in performing the transactions and
physical flows. Of primary significance are marketing organizations, which facilitate
various types of overseas sales offices and so on.

Why is making the right entry decision of high importance ?

• Influencing the end-price
• Are related to production decisions
• Production location : where ?
• How to reduce fluctuations in production ?
• Procedure of developing international channels can be slow & costly
• Vital part of the international marketing mix
• Selling > < marketing buying organization : conflict of interest (volume > <
profit maximization

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

The channel concept

An integrated system of
manufacturer
+
final user or buyer
Management should be striving always to select the ‘best’ international marketing
channel. The one that comes closest to completely satisfying target customers.
3 basic components : 1. Headquarters’ organization developed by manufacturer
2. Channels between nations Methods used or channels through
which the products are sent.
3. Channels within nation The means by which these products
reach the target, final user or consumer in the foreign markets.

Entry as a strategy
From a strategic perspective, entry mode is influenced by the international strategy
pursued by the firm for its foreign venture or market expansion. The choice of entry
mode is made to facilitate the firm’s international strategy for a particular foreign
market entry. Very broadly a foreign market entry strategy can be viewed as a plan for
the marketing program to be used for the product/market. As such, it requires decisions
on the following:
• The objectives and goals in the target market
• Needed policies and resource allocations
• The choice of entry modes to penetrate the market
• The control system to monitor performance in the market
• A time schedule

Market entry alternatives

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

An international market entry mode is an institutional arrangement necessary for the

entry of a company’s products, technology, and human and financial capital into a foreign
country/market.

Concerning channels between nations, decisions should be made regarding where the
production should be based. In the home country, overseas, or in a free area. After this a
company should decide whether or not areas are to be served outside of the countries.

Channels between nations

Exporting Direct and indirect exporting are the simplest ways to meet the needs of
foreign markets. These two basic forms of exporting are distinguished on the basis of
how the exporting firm carriers out the transaction flow between itself and the foreign
importer or buyer. Indirect exporting involves a marketing organization to handle the
transactions, in direct exporting the producer himself is responsible for the transactions.
In exporting you have only few control over your products.

Licensing Arrangements for the foreign licensee to pay for the use of manufacturing,
processing, trademark or name, patents, technical assistance, marketing etc. Franchising
is a special type of licensing. You have medium control in case of licensing/franchising.
Advantages vs. Disadvantages

Advantages Disadvantages
Reduces costs and risks of establishing Lack of control over technology, know-how
enterprise
Overcomes restrictive investment barriers Cross-border licensing may be difficult
Others can develop business applications Creating a competitor
of intangible property

Joint venture When a non-national company joins with national interests, or with a
company from another foreign country, in forming a new company. Ownership and
control are shared and proves to be more profitable in the long run than other
approaches. (Starbucks)
Advantages vs. Disadvantages

Advantages Disadvantages
Benefit from local partner’s knowledge Risk giving control of technology to partner
Shared costs/risks with partner May not realize experience curve or
location economies
Reduced political risk Shared ownership can lead to conflict

Acquisition/wholly owned subsidiary a company whose stock is entirely owned by

another company. The owner of a wholly-owned subsidiary is known as the parent
company or holding company. In this case control is at its maximum.
Advantages vs. Disadvantages

Advantages Disadvantages
No risk of losing technical competence to a Bear full cost and risk
competitor
Tight control of operation
Realize learning curve and location
economies

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Contract manufacturing Contract manufacturing is a process that establishes a

working agreement between two companies. As part of the agreement, one company
custom produces parts or other materials on behalf of their client. (Nike)

Management contracting Agreement between investors or owners of a project, and

a management company hired for coordinating and overseeing a contract. It spells out
the conditions and duration of the agreement, and the method of computing
management fees. It allows a company to manage another company without equity
control or legal responsibility.

Channel selection issues

Internal Factors
• Firm size and financial strength
• International experience
Product Hierarchical modes
• Product complexity (internationalization)
• Product differentiation advantage
Desired mode characteristics
• Risk averse
• Control and Flexibility
Transaction specific factors Intermediate modes
• Tacit nature of know-how
• Opportunistic behaviour/transaction cost
External factors
• Socio-cultural distance (home/host)
• Customer needs, preferences
• Country risk/demand uncertainty
• Market size and growth and economic development Export modes
• Direct and indirect trade barriers (externalization)
• Competition intensity
• Small number of relevant export intermediaries available

Chapter 8: Export entry modes

Alternative entry modes were identified and categorized before as direct and indirect.
• Indirect – use of intermediaries in home country that export the product to a
foreign country.
• Direct – direct sales to importers in foreign country
These two basic ways of exporting are distinguished on the basis of how the exporting
firm carries out the transaction flow between itself and the importer or foreign buyer.
Exporting advantages vs. Disadvantages
Advantages Disadvantages
Avoids cost of establishing manufacturing May compete with low-cost location
operations manufacturer
May help achieve experience curve and Possible high transportation costs
location economies
Tariff barriers
Possible lack of control over marketing
representatives

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

There are two broad alternatives available to the manufacturer wanting to export
directly:
1. Using international marketing organizations
2. Exporting through a cooperative organization

Indirect export by marketing intermediaries

There are 2 ways of indirect exporting by marketing intermediaries; Via merchants or
agents. They are described below:
• Merchants
Export merchants The domestic-based export merchant used buys and sells on its own
account. Generally engaged in both exporting and importing. The export merchant is free
in what it will buy, where and at what prices it will buy.
Trading company There are many different types of trading companies. Japan has
applied the trading concept most effectively and most uniquely. Trading companies
contribute a lot to the economic development of host countries. Three contributions are
identified: (1) Improving efficiency, (2) increasing productivity, and (3) introducing
marketing technology and credit.
Export desk jobber Is used primarily in the sales of raw materials. They are specialists
in knowing sources of supply markets.
• Agents
Export commission house or export buying house A representative of foreign buyers
who resides in the exporter’s home country.
Confirming house To assist the overseas buyer by confirming orders already placed, so
that the exporter may receive payment from the confirming house when the goods are
shipped.
Resident buyer Resident buyers represent all types of overseas buyers and are
domiciled in exporter’s home market. They represent foreign concerns that want to have
close and continuous contact with their overseas sources of supply.
Broker The function of a broker is to bring a buyer and seller together, thus he is a
specialist in performing the contractual function and does not handle the products itself.
Export management company (EMC) International sales specialist who functions as the
exclusive export department for several allied but non-competing manufacturers. It
operates under the name for which it is representing.
Manufacturer’s export agent In contrast to an EMC manufacturer’s export agents
operate in their own name. It is paid a straight commission and does not engage in buy-
and-sell arrangements. They do not offer all the services that an EMC does.

Indirect export by cooperative organizations

1. Piggyback marketing Low cost market entry strategy in which two or more
firms represent one another's complementary (but non-competing) products in
their respective markets. It occurs when one manufacturer uses its foreign
distribution facilities to sell another company’s products alongside its own.
2. Export combinations A formal association of independent and competitive
business firms, with membership being voluntary, organized for purposes of
selling to foreign markets. There are two basic types of exporting combinations:
(1) Marketing cooperative associations of producers or merchandisers or (2)
export cartels. The first type is the normal domestic marketing cooperative. The
second type exists when two or more independent business firms in the same
fields join together for exerting control over the market.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Direct export
There are 3 ways of home-country based exporting organizations:
Built-in department It will consists of an export sales manager with some clerical help
and its function is to do the actual selling or direct it.

Separate export department If sales continue to increase a point will be reached where
a more fully integrated organization is needed. This is a self contained and self-sufficient
unit which handles most of the export activities.

Export sales subsidiary In attempting to divorce completely from domestic operations

you can establish export sales subsidiaries. All authority and responsibility may be
‘assigned’ to one subunit of the parent manufacturing firm.

Gray market exporting

Gray market channels are those that are not ‘authorized’ by the exporter for a particular
foreign market. It is the legal importation of genuine goods into a country by
intermediaries other than authorized distributors. Distributors, wholesalers and retailers
obtain an exporter’s product from some other business entity in another country.

Chapter 10: Product decisions

The product is the heart of the marketing mix. If the product fails to satisfy the end-
user or the consumer in his/her needs, no additional efforts on any of the other
ingredients of the other elements of the marketing mix will improve the product
performance.

Product policy
Product policy for international/export marketing has two major interrelated dimensions:
1. Product planning and development
2. Product strategy
These are applicable to single products but also to the product mix. The assortment
consists of one or more product lines as well as individual products nor part of a product
line. In case of international export marketing, product strategy translates into policy
regarding product adaptation or standardization (Globalisation).

Product planning and development

In international/export marketing there are four major forms of product development:
1. New product development or addition
2. Changes in existing products
3. Finding new uses for existing products
4. Product elimination

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

New products
There are many ways in which a company may add products to its product mix for
marketing in foreign markets by exporting.
1. Export domestic products easy to implement, low-cost approach.
2. Acquire a firm Acquire some operations that has products for which there are
potential or existing markets overseas. However, this is quite costly.
3. Copying products
4. Internal product development A very dynamic process consisting of a number
of stages. From idea generation to evaluation. The cost of making wrong decisions
rise every step.

Changes in existing products

Often a product that is in trouble or is in the market maturity or decline stages of its life
cycle can have its life extended by modifications. Mostly physical product core
adaptations, or auxiliary services.

New uses for existing products

Finding new uses for existing products can be an important approach to extending the
life cycle for a product. However, it may be difficult because of the distances between
markets.

Product elimination
Less attention paid to eliminating products which is unfortunate since weak products can
add substantially overhead costs. The existing product mix should be continuously be
evaluated or monitored.

Standardization (global strategy) vs. Adapt-/customization (multidomestic

strategy)

Factors Standardization Customization

Competitive factors
Strength of competition weak strong
Market position dominant non-dominant
Market factors
Homogeneity of cust. Yes No
preference
Cust. purchasing power Uniform Varied
Conditions of use Uniform Varied
Product factors
Product type Industrial Consumer
Company factors
Company resources Limited Abundant

Straight Extension exporting the product without any modifications to the product mix
(standardization).
Product adaptation Marketing strategy whereby new products are based
onmodification or some improvement on existing or competing products, and not on
pioneering innovations. It is the strategy of a follower.
Promotion adaptation Different way of promoting your products
Product invention New products

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Branding issues
A brand is of high importance for selling goods and services. Next to this, a brand name
is protected by law and is important to other elements in the marketing mix. Branding is
also important in that a brand can identify the company owning it and is a source of
country-of-origin effect.

Brand equity
A brand’s reputation together with its country of origin contribute to its brand equity.
Brand equity or brand value can be viewed as a measure of the strength of consumers’
attachment to a brand and as a description of the association and beliefs the consumer
has about the brand.

Brand protection
Brand protection is offered on national level, regional level and international level. Every
country have some form of system fir registering and protecting trademarks for foreign
as we as domestic nationals.

Branding decisions
Branding and trademark problems can be grouped into two major categories: (1)
Selecting a good brand, and (2) Determining how many brands should be in the
company’s product line.

Developing global brands

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Chapter 11: Pricing decisions

Pricing for international marketing involves: (1) export pricing and (2) pricing within
national markets when some form of non-export market entry mode has been used.

Determinants of an export price

There are a lot of factors influencing pricing :
• customer behaviour (c) + market conditions
• competitors’ behaviour (c)
• general company policies (c)
• costs of inputs and distribution
• legal and political issues

In order to understand the structure of a price we need to examine the basic factors that
influence the setting of an export price.

Costs
Costs are often a major factor in price determination and t here are a number of reasons
to have detailed information on costs. They are useful for setting a price floor. The price
floor may be out-of-pocket costs, those are direct costs. However, the long run full costs
should be recovered too!
Marginal pricing is based on the accounting concept of contribution margin.
Dynamic pricing is where prices vary from one market to another, depending on the
market conditions, differences in costs and variations in the way consumers value the
offering.

Market conditions
The nature of the market determines the upper limit of prices. The utility or value placed
on a product by purchasers sets the price ceiling.

Competition
While costs and demand conditions circumscribe the price floor and ceiling, competitive
conditions help to determine where within the two extremes the price should be set.
Prices of competitive products have an impact on the sales volume. Barriers that an
exporter can use to provide shelter from competition include having a product
distinctiveness, a brand prominence with high brand equity, and a well-established
channel of distribution.
Present and potential competitors in a dynamic environment
To outcompete competition they are always setting barriers to entry via:
• Distinctive products (your competitive advantage)
• High brand equity
• Superior channels of distribution

Pure competition Price is set in the marketplace. Price tends to be just enough above
costs to keep marginal producers in business.
Monopolistic or imperfect competition The seller has some discretion to vary the
product quality, promotional efforts and channel policies in order to adapt the price of the
total product to serve pre-selected market segments.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Legal political
Legal and political factors act to restrict the freedom of a company to set prices strictly
on the basis of economic considerations. You need to be aware of obstacles to market-
based pricing: Governments always have the last word concerning tariff and non-tariff
restrictions, and currency values. Some foreign officials use pricing guidelines for
granting foreign exchange to the buyer of foreign merchandise.
Also most industrialized countries have anti-dumping rules and are concerned about how
to handle discounts etc.

Pricing Objectives and Strategies

• Skimming the market High end of market. Getting the highest possible price
for your products.
• Sliding down the demand curve It resembles the market skimming strategy,
however their main goal is to increase market share instead of profit.
• Penetration pricing This involves setting the price low too rapidly create a mass
market. Economies of scale are part of this where there are the lowest
product(ion )cost. Assumes that demand is highly elastic.
• Pre-emptive Setting prices very low to discourage competition.
• Extinction pricing The purpose is to eliminate existing competitors.

Pre-emptive and extinction pricing are both closely related to dumping.

Export Price vs. Domestic Price

Prices lower than domestic

One argument is that the product is probably less known in the foreign market. To
ensure acceptance prices are low.

Prices higher than domestic

The increased initial costs of equipment are a good reason for prices to be higher than
domestic prices. There is frequently extra investment asked for the selling procedure,
since this is difficult in terms of language, customs and traditions etc.

Export prices on par with domestic prices

It enables the manufacturer to fix export prices that costs and experience in the domestic
market have indicated are necessary and fair. It gives a feeling of safety upon entering
the export market.

Differential pricing
Since the market and competitive conditions derive a lot from other foreign markets,
possibilities arise for setting different prices for each market.

Transfer pricing

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Chapter 13: Promotion and marketing communication

Communication is a major part of international marketing activities. It is not enough to

produce and make available a product or service; it is also necessary to provide
information that buyers need to make purchasing decisions.

Communication is all about providing information for customers in foreign countries,

persuading also:
• Looking out for similarities across nation
• Dealing with communication barriers

These communication barriers are:

• Language differences
• Media availability
• Governmental regulations
• Economic differences
• Cultural differences
These barriers may interact with each other as well as have independent effects. There
are some countries where government regulations prohibit the use of a foreign language
in promotion activities. Promotion and communication by exporters and other
international marketers is tied to consumer and buyer behaviour. However, not all
countries react the same on marketing promotion.

Export marketing promotion and communication decisions

The promotion decisions can be reduced to the following:
1. What message?
2. What communication media?
3. How much effort/money to spend?
These decision areas are interrelated. Export marketing promotion takes various forms:
• Personal selling Person-to-person communication between company
representative and a prospective buyer. You need a well-selected, well-trained,
well-compensated and well-supported salesperson.
• Advertising Any paid message placed in a medium.
• Sales promotion All sales activities that supplement and strengthen personal
selling and advertising. Sales promotion is short-run duration and adds value to
the product or brand which is tangible (Discounts etc.).
• Publicity Any form of nonpaid significant news or editorial comment about a
company, its practices, its personnel, or its products, is a major component of
the public relations activities of a company.

The question on what mix of promotion activities to employ is the question of whether to
emphasize a ‘push’ or ‘pull’ strategy. A pull strategy is defined as pre-selling the product
so that the buyer seek it out or ask for it at the point of purchase. A push strategy is
defined as working with resellers or assisting them in selling the product at the point of
sale.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Export marketing promotion as communication

Communication problems are not limited to promotion that is verbal in nature. Nonverbal
communication problems can also arise. Nonverbal communication exists in many forms.
Symbols, Signs, and Colours. However, in nonverbal communication it is very important
to be culturally aware. When using an object as a type of symbol the export manager
must be sure that the symbol means something to the target audience.

Promotional programs and strategy

A promotional program may include such activities as consumer product advertising,
corporate advertising, personal selling, sales aids and a wide variety of sales promotional
activities. Promotional programs may be geared to either:
• Prototype standardization; in which minor modifications are made to some basic
strategy.
• Pattern standardization; whereby a strategy is designed from the start to accept
modifications to fit local conditions., yet still keeping sufficient common elements
to minimize the drain on resources and management time.
At times a company whose identity is relatively unknown in a foreign market finds it
advantageous to attach its company identity to a known entity in its target market, this
is called co-promotion.

Chapter 14: Supply chain management/logistics and handling export

orders

Successful handling of the export order and physical distribution depends upon much
more than the filling our of paperwork. Decisions must be made regarding the
management of all steps and processes in the supply chain.

The steps in the overall export procedure are illustrated below:

1
Exporter Importer

4. 2.
Import warehouse
5. Bank in 3. Importer’s
exporter’s bank 9.
country

Manufacturing 8. Customs

6. 9.
Secure
transportation, Ship
7.
documentation, and
customs approval

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Step 1 Sale Importer makes inquiry from potential supplier. Exporter sends
catalogues and price list. Request for samples, pro forma invoice.
Exporter sends pro forma invoice and the importer sends purchase order, which
the exporter again receives later.

Step 2 Importer arranges financing through his bank.

Step 3 Importer’s bank sends letter of credit.

Step 4 Exporter’s bank notifies exporter that letter of credit is received.

Step 5 Exporter produces or acquires goods.

Step 6 Exporter arranges transportation and documentation.

Step 7 Exporter ships goods to importer.

Step 8 Exporter presents documents to bank for payment.

Step 9 Importer has goods cleared through customs and delivered to his
warehouse.

Handling the export order

The inquiry and response

The initial inquiry or order from a prospective foreign buyer may be unsolicited, or may
come from the efforts of an export management company, agents or a company’s own
efforts. To response to the inquiry should normally be in polite, business-like letter
format.

Order
There is no such thing as a standard order form. As long as the order contains the
essential facts concerning the desired merchandise and how it is to be shipped, no
special form or procedure is necessary.

When the exporter has an overseas representative who visits the prospective customer
the representative may use a combination order form and sales contract.

Both buyer and seller are likely to disregard a breach of contract if no monetary
obligation has been created or if no considerable damages have been created or inflicted.

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)

 lOMoARcPSD|3707525

Physical distribution
Having received the order, ensured that the terms of sale and payment are satisfactory,
and accepted the order, there is the need to arrange for shipping, insurance, and
preparation of the multitude of required documents Physical distribution!
To a large extent physical distribution activities associated with shipments to foreign
markets are much the same as those for shipment to domestic markets. However, the
processes, procedures and documents required in export shipments are relatively more
complex due to the following 3 factors:
1. The passage of goods across national boundaries; legal requirements.
2. Shipment by ocean-going vessels or international airlines, with security and
documentary requirements.
3. The time and distance required to complete the transactions, ensuring payment.

There are many reasons for managers being concerned with physical distribution of their
companies’ products are:
- To reduce costs by operating efficiently Price is highly influenced by processing
costs.
- Increased profits can be generated directly; reduce costs, increase sales.
- National governments exert pressures that can affect the manner in which certain
physical distribution activities are carried out.
- Speed (time) Time = money
- Reliability (of your partners, insurance)
- Availability immediately

Downloaded by Gulzira Shalgymbayeva (gulzirashalgymbayeva@gmail.com)