Part A

Answer No 1 , Incoterms® are the selling terms that the buyer and seller of goods both agree to
during international transactions.  These rules are accepted by governments and legal authorities
around the world. Understanding Incoterms® is a vital part of International Trade because they clearly
state which tasks, costs and risks are associated with the buyer and the seller. The Incoterm® states
when the seller’s costs and risks are transferred onto the buyer.  It’s also important to understand that
not all rules apply in all cases.  Some encompass any mode or modes of transport.  Transport by all
modes of transport (road, rail, air and sea) covers FCA, CPT, CIP, DAP, DPU (replaces DAT) and DDP.
Sea/Inland waterway transport (Sea) covers FAS, FOB, CFR and CIF

The term, Incoterms®, is an abbreviation for International Commercial Terms. They are a set of
rules which define the responsibilities of sellers and buyers for the delivery of goods under sales
contracts for domestic and international trade. They are published by the International Chamber
of Commerce (ICC) and are widely used in international commercial transactions. The first
Incoterms® were issued in 1936. The most recent version of Incoterms®, Incoterms® 2010,
were launched in September 2010 and became effective January 1, 2011.
What are Incoterms® used for?
Incoterms® provide a common set of rules to clarify responsibilities of sellers and buyers for the
delivery of goods under sales contracts. They apportion transportation costs and responsibilities
associated with the delivery of goods between buyers (importers) and sellers (exporters) and
reflect modern-day transportation practices. Incoterms® significantly reduce misunderstandings
among traders and thereby minimize trade disputes and litigation.
Why were the Incoterms® 2000 revised?
Incoterms® 2010 are the updated version of Incoterms®. Incoterms® 2010 have been developed
as a result of an extensive review of current shipping practices and trends in an effort to keep up
with the rapid expansion of world trade. The key drivers for this update include: a need for
improved cargo security, changes to the Uniform Commercial Code in 2004 that resulted in a
deletion of U.S. shipment and delivery terms, and new trends in global transportation.
What are the Incoterms® 2010?
The two main categories of Incoterms® 2010 are now organized by modes of transport. Used in
international as well as in domestic contracts for the first time, the new groups aim to simplify
the drafting of contracts and help avoid misunderstandings by clearly stipulating the obligations
of buyers and sellers.
Group 1. Incoterms® that apply to any mode of transport are:
EXW Ex Works
FCA Free Carrier
CPT Carriage Paid To
CIP Carriage and Insurance Paid To
DAT Delivered at Terminal
DAP Delivered at Place
DDP Delivered Duty Paid
Group 2. Incoterms® that apply to sea and inland waterway transport only:
FAS Free Alongside Ship
FOB Free on Board
CFR Cost and Freight
CIF Cost, Insurance, and Freight

Incoterms, a widely-used terms of sale, are a set of 11 internationally recognized rules which

define the responsibilities of sellers and buyers. Incoterms specifies who is responsible for
paying for and managing the shipment, insurance, documentation, customs clearance, and other
logistical activities.  

An Overview of Incoterms® 2020 

The Incoterms® are a set of 11 individual rules issued by the International Chamber of
Commerce (ICC) which define the responsibilities of sellers and buyers for the sale of goods in
international transactions. Of primary importance is that each Incoterms rule clarifies the
tasks, costs and risks to be borne by buyers and sellers in these transactions. Familiarizing
yourself with Incoterms will help improve smoother transaction by clearly defining who is
responsible for what and each step of the transaction.  

The Incoterms® 2020 rules are updated and grouped into two categories reflecting modes of
transport. Of the 11 rules, there are seven for ANY mode(s) of transport and four for SEA or
LAND or INLAND WATERWAY transport.   

The seven Incoterms® 2020 rules for any mode(s) of transport are: 

    EXW - Ex Works (insert place of delivery)

    FCA  - Free Carrier (Insert named place of delivery) 

    CPT  - Carriage Paid to (insert place of destination) 

    CIP -  Carriage and Insurance Paid To (insert place of destination)  

    DAP - Delivered at Place (insert named place of destination)  

    DPU - Delivered at Place Unloaded (insert of place of destination)  

    DDP - Delivered Duty Paid (Insert place of destination).  

    Note: the DPU Incoterms replaces the old DAT, with additional requirement for the seller to
unload the goods from the arriving means of transport. 

The four Incoterms® 2020 rules for Sea and Inland Waterway Transport are: 

     FAS - Free Alongside Ship (insert name of port of loading) 

     FOB - Free on Board (insert named port of loading) 

     CFR - Cost and Freight (insert named port of destination) 

     CIF -  Cost Insurance and Freight (insert named port of destination) 

Can I still use Incoterms® 2010 after January 1, 2020? 

Yes, all contracts using any incoterms are valid if they are agreed upon by all parties to the
transaction, and correctly identified on the export-related documents. Although the ICC
recommends using Incoterms® 2020 beginning January 1, 2020, parties to a sales contract can
agree to use any version of Incoterms after 2020. They need to clearly specify the chosen version
of Incoterms being used (i.e., Incoterms® 2010, Incoterms® 2020, or any earlier version). 

Incoterms Clarify Responsibilities of Parties to a Sales Transaction 

 For example, in each Incoterm rule a statement is provided as to seller’s responsibility to
provide the goods and commercial invoice in conformity with the contract of sale.
Likewise, a corresponding statement is provided which stipulates that the buyer pay the
price of goods as provided in the contract of sale. 
 Each Incoterm rule has a statement stipulating which party is responsible for obtaining
any export license or other official authorization required for export and for carrying out
the customs formalities necessary for the export to proceed. Similarly, each rule has a
corresponding statement as to which party is responsible for obtaining any import license
or other official authorization required for import and for carrying out the customs
formalities required for the import of goods. These statements also specify which party
bears the cost of handling these tasks. 
 Similarly, each Incoterm rule specifies which party to the transaction, if any, is obligated
to contract for the carriage of the goods. Another point addressed in each Incoterm rule
is which party, if any, is obligated, to provide for cargo insurance coverage. These
statements also specify which party bears the cost of the handling these tasks. Each rule
also contains statements, among others, as to which party is responsible for packing the
goods for transport overseas and for bearing the costs of any pre-shipment inspections.  
 A final example is cargo delivery. Each Incoterm rule specifies the seller’s obligations as
for cargo delivery and clarifies when delivery takes place. Each rule also specifies when
the risk of loss or damage to the goods being exported pass from the seller to the buyer by
reference to the delivery provision.  

What Incoterms Do Not Cover  

As noted above, Incoterms are generally incorporated in the contract of sale, however they do

not: 

 address all the conditions of a sale;  

 identify the goods being sold nor list the contract price;  
 reference the method nor timing of payment negotiated between the seller or buyer;   
  when title, or ownership of the goods, passes from the seller to the buyer;  
 specify which documents must be provided by the seller to the buyer to facilitate the
customs clearance process at the buyer’s country; and  
 address liability for the failure to provide the goods in conformity with the contract of
sale, delayed delivery, nor dispute resolution mechanisms.  

Where can I learn more about the new Incoterms® 2020 rules?  

The latest version of the Incoterms® 2020 rules is now published by international Chamber of
Commerce (ICC) and protected by copyright. The revised rules reflect the latest developments in
commercial transactions. As of January 1, 2020, all sales contracts should include reference to
the Incoterms® 2020 rules. You may obtain Incoterms® 2020 rules visit the ICC website

Answer 3

1. What were the possible risks of Louis Vuitton’s first-ever

1. What were the possible risks of Louis Vuitton€™s first-ever television advertising campaign?

2. In fall 2011, the euro/dollar exchange rate was ‚¬1 = $1.35. By spring 2015, the dollar had strengthened to ‚¬1 =
$1.10. Assume that a European luxury goods marketer cut the price of an $8,000 linen suit by 10 percent when
launching its spring 2015 collection. How would revenues have been affected when dollar prices were converted to
euros?

3. Louis Vuitton executives raised prices in the late 2000s, and  sales continued to increase. What does this say
about the  demand curve of the typical Louis Vuitton customer?

4. Compare and contrast LVMH€™s pricing strategy with that of  Coach.

LVMH Moët Hennessy€“Louis Vuitton SA is the world€™s largest marketer of luxury products
and brands. Chairman Bernard Arnault has assembled a diverse empire of more than 60
brands, sales of which totaled $40 billion (‚¬29.8 billion) in 2013 (see Figure 11-2). Arnault,
whom some refer to as €the pope of high fashion,€ recently summed up the luxury business
as follows: €œWe are here to sell dreams. When you see a couture show on TV around the
world, you dream. When you enter a Dior boutique and buy your lipstick, you buy something
affordable, but it has the dream in it.€
Decades ago, the companies that today comprise LVMH were family-run enterprises focused
more on prestige than on profit. Fendi, Pucci, and others sold mainly to a niche market
comprised of very rich clientele. However, as markets began to globalize, the small luxury
players struggled to compete. When

Arnault set about acquiring smaller luxury brands, he had three goals in mind. First, he hoped
that the portfolio approach would reduce the risk exposure in fashion cycles. According to this
logic, if demand for watches or jewelry declined, clothing or accessory sales would offset any
losses. Second, he intended to cut costs by eliminating redundancies in sourcing and
manufacturing. Third, he hoped that LVMH€™s stable of brands would translate into a stronger
bargaining position when managers negotiated leases for retail space or bought advertising.

Sales of luggage and leather fashion goods, including the 162-year-old Louis Vuitton brand,
account for 34 percent of revenues (see Figure 11-2). The company€™s Selective Retailing
group includes Duty Free Shoppers (DFS) and Sephora. DFS operates €œtravel retail€ stores
in international airports around the world; Sephora, which LVMH acquired in 1997, is
Europe€™s second largest chain of perfume and cosmetics stores. Driven by such well-known
brands as Christian Dior, Givenchy, and Kenzo, perfumes and cosmetics generate nearly 15
percent of LVMH€™s revenues. LVMH€™s wine and spirits unit includes such prestigious
Champagne brands as Dom Perignon, Moët & Chandon, and Veuve Clicquot.

Despite the high expenses associated with operating elegant stores and purchasing advertising
space in upscale magazines, the premium retail prices that luxury goods command translate
into handsome profits. The Louis Vuitton brand alone accounts for about 60 percent of
LVMH€™s operating profit. However, unscrupulous operators have taken note of the high
margins associated with Vuitton handbags, gun cases, and luggage displaying the distinctive
beige-onbrown latticework LV monogram. Louis Vuitton SA spends $10 million annually battling
counterfeiters in Turkey, Thailand, China, Morocco, South Korea, and Italy. Some of the money
is spent on lobbyists who represent the company€™s interests in meetings with foreign
government officials. Yves Carcelle, chairman of Louis Vuitton SA, recently explained,
€œAlmost every month, we get a government somewhere in the world to destroy canvas, or
finished products.€

Another problem is a flourishing gray market. Givenchy and Christian Dior€™s Dune fragrance
are just two of the luxury perfume brands that are sometimes diverted from authorized channels
for sale at mass-market retail outlets. However, LVMH and other luxury goods marketers found
a new way to combat gray market imports into the United States. In March 1995, the U.S.
Supreme

Court let stand an appeals court ruling prohibiting a discount drugstore chain from selling
Givenchy perfume without permission. Perfumes Givenchy USA had claimed that its distinctive
packaging should be protected under U.S. copyright law. The ruling has meant that Costco,
Walmart, and other discounters cannot sell some imported fragrances without authorization.

Answer 2

In these days, choosing a corporate objective of a firm is extremely important and

has a determinant meaning to the success or failure of a corporation in controlling
the market. To gain it, shareholder value maximization and stakeholders’ interest
satisfaction play a key role in creating profit for company. Which governance
objective should a corporation follow, maximizing shareholder value or satisfying
stakeholder’s interests or balancing the interests of shareholders and stakeholders?
This is an inextricable problem for each corporation to pursue its own goal. It’s
difficult for the company to bring forward a right choice.
To make this issue clear, it’s necessary for understanding some basic concepts
about shareholder, stakeholder, what is shareholder value maximization? And what
are stakeholders’ interests? Shareholder is defined as an individual or corporation
owns one or more shares of stock in a company. They are the owners of the
company, have potential profit if the company does well or potential loss if the
company does poorly. Therefore, it’s a priority for shareholder value maximization
which is defined: “Maximizing shareholder wealth means maximizing the flow of
dividends to shareholders through time” (Glen Arnod, 2008). Why does a
corporation maximize shareholder value? Because shareholders are persons
sacrificing the immediate consumption to put their capital also hand over their
savings for managers by purchasing the shares of company with the promise of a
flow of cash in the form of dividends in the long run and not necessarily payback
in short time. Maximizing shareholder wealth is often a superior goal of the
company, creating profit to increase the dividends paid out for each common stock.
Shareholder wealth is expressed through the higher price of stock traded on the
stock market. An another constituency of contributing to value for company is
stakeholder, Freeman defines it: “Stakeholder is any group or an individual who
can affect or is affected by the achievement of an organization’s
purpose”(Freeman, 1984, p.53). Stakeholders here include customers, suppliers,
employees, creditors, directors, communities, environment, government officials…
The different stakeholder groups have different interests. For example, customer’s
interest is high quality products with cheap price, creditor’s interest is low risk and
high payment, the society’s interest is social welfare maximization, the charitable
organizations’ interest is to help unhappy people with a part of maintained profit of
the company. A corporation following the stakeholders’ interest goal indicates that
the manager makes decision based on all interests of stakeholders.

So far, there have been various points of whether a business should prefer value
maximization for shareholders or interests of stakeholders as a governance
objective of the company. According to Milton Friedman: “In a free enterprise,
private property system, a corporate executive is an employee of the owners of the
business. He has a direct responsibility to his employers. That responsibility is to
conduct the business in accordance with their desires, which generally will be to
make as much money as possible while conforming to the basic rules of society…
In so far as his actions in accord with his social responsibility, reduce return to
stockholders, he is spending their money”(Milton Friedman, 1970). Shareholders
are owners of the firm and deserve any surplus the firm creates. Shareholders
spend money to employ the executives with the desire that they will bring much
higher dividend in the long run, act based on the interests of shareholders for the
only purpose to maximize shareholder wealth. Friedman supports completely for
creating value of shareholders, directors have the proxy responsibility to maximize
shareholder wealth, any actions besides shareholder’s benefit are violations of this
duty. It’s also supported by his saying “There is one and only one social
responsibility of business- to use its resources and engage in activities designed to
increase its profits so long as it stays within the rules of the game, engages in open
and free competition, without deception or fraud”(Milton Friedman, 1970). He
stressed on pursuing the high returns for owners as a main objective of the
company and leads the best allocation of investment capital for society because the
scare resource is utilized best for producing the optimum mix of goods and
services. The only one responsibility of directors is to create value for
shareholders, advancing shareholders’ interests above all others. Is it an out-dated
theory which considers the company as a thing to be owned, an entity separated to
other constituencies? Does a company do well without care various constituencies?
It’s like a “zero sum game”, it means gain achieved by winner is loss of loser, if
adding gain and loss together, the result is zero. This theory also implies that there
is no win-win situation, in a game there has to be winner and loser.

But whether shareholder value maximization is the only objective of the

corporation in market economy in these days or not, another point answers this
question: “NCR is a successful, growing company dedicated to achieving superior
results by assuring that its actions are aligned with stakeholder expectations.
Stakeholders are all constituencies with a stake in the fortunes of the company.
NCR’s primary mission is to create value for our stakeholders.”(NCR 1990 Annual
Report: 2). The fact proves that one company is still successful in pursuing
stakeholders’ interest goal to maximize its value. It indicates that managers should
make decisions based on the interests of stakeholders, especially in a competitive
environment as nowadays, satisfying stakeholders’ interests is very important.
Stakeholders are persons indirectly creating a considerable value for the firm. It
requires the company suitable policies for stakeholders’ needs. One survey of
directors proved that NCR is not alone in this view: “.. board of directors no longer
believe that shareholders is the only constituent to whom they are responsible”.
(Wang, Jia and Dewhirst, H. Dudley, 1992). Explicitly, shareholder value
maximization is not the only goal of the company, a company can’t do well
without caring the interests of customers, suppliers, employees, or government
environment.. Stakeholders are constituencies who play an important role in the
fortunes of the company. Their primary mission is to create value for stakeholders.
But one problem arises for stakeholder theory expressed in Michael Jensen’s
writings below, and the corporation should consider related factors carefully before
making decision of their choice.
Michael Jensen says: “Stakeholder theory effectively leaves managers and
directors unaccountable for their stewardship of the firm’s resources…plays into
the hands of managers by allowing them to pursue their own interest at the expense
of the firm’s financial claimants and society at large. It allows managers and
directors to devote the firm’s resources to their own favorite causes- the
environment, arts, cities, medical research-without being held accountable…it is
not surprising that stakeholder theory receives substantial support from them”
(Jensen, 2001). Jensen attacks the stakeholder approach. He points out a company
which acts in the stakeholder’s interests tends to make the executives in the firm to
earn profits for themselves. Because there is separation of the ownership and
control between the owners and managers, which makes managers to pursue
objectives attractive to them. With characteristic of management, directors have
the tendency to be lack of diligence, taking advantage of their position to raise their
perks or participate in poor, less risky projects.. So, it’s not surprising when
directors support stakeholder theory. One difficulty for directors to define the main
goal of the firm is to satisfy interests of all stakeholders. In a real life, no one can
serve both masters.. stakeholder theory directs the corporate managers to serve
many masters. It is not clear, personal and causes directors confused in making
decision. Besides stakeholder theory’s disadvantage, Jensen still states that the
company can’t maximize the shareholder wealth if it ignores the rest
constituencies. No company can create great value for its shareholders without
stable growth of revenue, which comes from the relationship with customers,
suppliers, bankers or government and so on.

Over some arguments above, we can see different points on corporate governance.
Should a company go into the direction of creating value for shareholders over
stakeholder’s interests? In my opinion, pursuing only one objective: shareholder
value maximization or stakeholders’ interests is not optimal approach. I agree with
the view of Michael Jensen. Shareholder value maximization’s still prior than
stakeholders’ interests with an effective and clear strategy. Cola-cola company is
typical example for making much money by maintaining a powerful brand name
and manufacturing an enjoyable beverage for consumers, a form of maximization
of shareholder value based on its brand name and product. Moreover, maximizing
shareholder value also needs satisfaction of stakeholder’s interests because
stakeholders are people who contribute indirectly in creating the value for the firm.
To me, customer satisfaction is very significant in the business perspective
nowadays. Any strategy which increases the investment of the company’s resource
to increase customer satisfaction is aimed to increase the shareholder’s value if the
economic return overtime exceeds the company’s cost of capital. The manager can
set the price of each product or service no higher than the perceived price of the
customer(the ceiling price) and no lower than the cost of capital (floor price),
concurrently give many promotion programs such as buy one give one, reducing
the product price for the increase in customer satisfaction. Moreover, the price of
the product is not only reasonable for customers, suppliers, but also to the market
situation, and importantly securing the profit for company, guaranteeing for
shareholder value. There is no conflict between maximizing shareholder value and
customer satisfaction in this case. However, it’s sometimes difficult for directors to
choose between short-term and long-term goals. Because if the manager wants
high price for short-term goal to raise the year’s profit but in the long run, with
competition, the customers will transfer to consume the products of other firms
with cheaper price, the failure in customer satisfaction will reduce shareholder
value aimed to the long-term goal. I think it’s good for managers to note short-term
and long-term goals. Because the goal of shareholder wealth maximization is a
long term goal achieved by many short-term decisions to maintain or exceed the
expected value of shareholders. So managers with desire to maximize value for
shareholder need to consider both short-term and long-term impact on their
decisions so as to increase the market stock price.

One reality, many firms nowadays choose the direction of satisfying stakeholder’s
interest. I can’t say “right” or “wrong” here, it’s up to the corporation’s specific
objectives to different perspectives. But I think the purpose of stakeholders’
interests shouldn’t conflict with the shareholder value maximization. Because
serving the interests of stakeholders can create profit for the firm, create value for
shareholders. The main goal of the company is shareholder value maximization but
not ignore the stakeholder’s interests. For example, to suppliers, the company can
pay for them with the market price, make payment on time, has preferential
policies for excellent suppliers, builds good relationship with suppliers to increase
volumes purchased, to improve the product’s quality, coordinating delivery-
production schedules to minimize costs, which helps to maximize shareholder
wealth. To employees, shareholder value maximization requires the company to
have good human resources management because the workforce is very significant
in creating superior value for company, it’s a competitive advantage of the
company. A company which treats employees badly as pay lower salary than the
market’s one or has no well treatment policy such as: health insurance, social
insurance… is unlikely to maximize value possible for shareholders. Coca-cola,
Disney and General Electric have the best human resources management. Policies
with investment on training courses for employees are encouraged, increasing the
competitive advantage of the company over rivals. In the long run, it will create
value for shareholders.
In conclusion, the governing objective of the company should be to maximize the
value of the company for shareholders. However, to achieve this purpose, it also
requires serving the economic interests of all stakeholders over time. Maximizing
stakeholder’s interests also maximizes shareholder wealth.

Who owns a corporation? Shareholders do. These are the individuals,

businesses, and institutions that have an ownership interest in a company
after purchasing shares of that company's stock. Even if your business is
a one-person shop, you are the shareholder based on your invested
interest in your company. Because shareholders own the firm, they are
entitled to the profits of the firm.

Shareholder wealth is the appropriate goal of a business firm in a

capitalist society, whereby there is private ownership of goods and
services by individuals. Those individuals own the means of production by the
business to make money. The profits from the businesses in the economy accrue to the
individuals.

Shareholder Wealth Maximization 101

When business managers try to maximize the wealth of their firm, they are actually trying to increase the company's stock price. As the stock
price increases, the value of the firm increases, as well as the shareholders' wealth.

The Managers of the Firm

People often think that the managers of a firm are the owners. In the case of a small business or partnership, that might be true, such as sole
proprietor owner who is also the manager. In a larger business, there may be many levels of management and staff, and they do not necessarily
own the firm. Aside from their salaries and benefits, they only profit from the business if they own shares of stock in the company.

When employees are also shareholders, they tend to have a greater sense of responsibility to the firm. Consequently, many companies encourage
employees to become shareholders. In fact, some businesses offer shares of stock to their employees at a discount through an Employee Stock
Purchase Plan (ESPP).

Conflicts Between Owners and Managers

Because the managers of a firm are directed and guided by a Board of Directors, and because they do not profit directly from the firm's goal to
maximize shareholder wealth, unless they are also shareholders, conflict can sometimes arise between stockholders and managers. This conflict is
called the agency problem.

Managers serve as agents of the shareholders. If there is an agency problem, it is imperative to find a resolution as soon as possible to prevent
problems within the business that can impede performance.

Social Responsibility

There is an idea that businesses focused on money are greedy and don't care about social issues or that socially responsible businesses can't
increase stock values. The truth is that a company can be both profitable and socially responsible.

Consider the 2008 Great Recession and one of its main causes; the subprime mortgage crisis. Theses banks were more concerned about their
investment portfolios instead of properly loaning money to customers, which is their charge. Those investment portfolios were filled with toxic
assets, which eventually compromised the operations of many financial institutions and caused the failure of several big banks. As a result, their
share prices fell right along with them. In this case, greed and a lack of social concern led to their downfall.

On the other hand, after almost failing during the Great Recession, GM turned itself around, repaid its debt, and developed "greener" vehicles. As
a result, it realized an increase in its share price. GM took on the mantle of social responsibility rather than exploiting consumers for financial
gain.

Business firms cannot exist and profit in the long run without being socially responsible.

Profit Maximization

Why are business firms not seeking profit rather than an increase in share price? One reason is that profit maximization does not take the concepts
of risk and reward into account as shareholder maximization does. The goal of profit maximization is, at best, a short-term goal of financial
management.

Part B (No – 3)
A firm favorite among parents, their range covers everything from cars and trucks, imaginative
play toys, including games of food, building blocks, baby toys and building kits, as well as some
of the various age roofs of boys and girls and different designs for each group. All products in
the Green Toys”” range have been designed from the ground up to be as environmentally
friendly as possible. To date the company has turned almost 22 million milk Jugs into toys,
which contain no harmful chemicals, and are shipped in CEO-friendly packaging.

Green Toys”* are a great way to Introduce the concept of recycling to your kids children as a
result! 1/13 2.

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0 What are the key success factors in the world toy industry? Toys are significant part to
accompany each child grow up. Each child has a favorite ay fondle admiringly. It is precisely
because toys are closely linked with each child to grow, so the toy industry has a considerable
market size and growth potential. In the past few years, all the rage, the classic toy has three
characteristics: compliance with safety standards, have good appearance and quality, to meet the
potential demand of the child.

Emotional appeal Perception Safety 2/13 Toy safety is the cornerstone.

Children are the hope for the future, but as a long- term playmate for children, and nearest items
contact with children, security will directly affect the growth of children. The second layer Is the
perception and function. Perception refers to a toy have direct experience can be touched shape,
material, and feel Like this feature allows children to experience more fun. Estate Ana perception
Is a necessary contralto Tort ten success AT ten world toy industry. And the top layer is the
emotional appeal.

If you want to succeed in the toy industry, we must fully understand the customer’s emotional
appeal and its changes, and then linked the emotional appeal and toy product together. In
addition to these three characteristics, there are many factors that can affect the success of the toy
factory. Innovation – in a difficult period, because of all the negative forces is hard to provide
innovative new products, but global toy market relatively stable, one of the large reason is the
continued innovation of the toy industry, although in recent years the most serious financial
situation .

A clear example of this would be the Hasher. About brands and licenses – the reality is, if not a
strong independent brand of the company, a licensed investment portfolio, or both will struggle
in this industry. This is an everlasting success factors, but it is in difficult times, even more
importantly, as a detailer will not take any risks, more willing to trust a known quantity and
brand / license and present.

In the long term, the only way to ensure long-term stability and success in this industry is to
establish their own brand of powerful heroes. /13 3. 0 What are Green Toys key competitive
advantages in the international toy market? In this case, on Green Toy Inc. Home page site has
such a sentence” We believe the world would be a much better place if everyone said “please”
and “thank you”, cell phones didn’t ring during movies, and all toys were fun, safe, and made
from environmentally friendly materials. Since it’s probably no use holding our breath for those
first two, we’re concentrating on the toys.

” Green Toy Inc. Makes several awesome competitive advantages in toy industry in the world.
Safety of toys In august 2006, because of lead-paint hazards and tiny magnets that could be
swallowed, Matter Inc. Recalled more than 10 million toy products. However Green Toy Inc.

Produces CEO toys from recycled plastic milk Jugs and friendly materials. And all of the
recycled material can be tracked chemical inventories. You can completely guarantee the safety
of toys. /13 0 Protection of the environment Green LOL Inc. Recycled plastic Ana
environmentally Tryingly materials. It noels reduce the use of fossil fuels and greenhouse gas
emissions and helps improve environmental quality.

Improve Profitability with Cost Savings Because of Green Toy Inc. Use recycled materials, thus
reducing the cost of raw materials. At the same time improve profitability. 0 Attract new green
consumers and open new markets Due to the continuous improvement of people’s level of
education, more and more people began to pay attention to environmental protection. There is
also a growing number of parents treat toy safety as important as the food. Green Toys Inc.

One of very important competitive advantage is its all products are green, this advantage will
attract new green consumers and open new markets. / 13 0 Improve company reputation and
brand image Holding high green flag of Green Toy Inc. Can improve the company’s reputation
and brand image 4. 0 Yes, Green Toy Inc. Should consider a higher degree of international
expansion of their product.

Green Toy Inc. Has distributors in 35 countries, but 90 percent of Green Toys’ sales eave come
from the US market. However, their current core market is not growing due to the declining size
of their customer base. In Theodore Levity’s The Globalization of Markets it says that” The
globalization of markets is at hand.

With that, the multinational commercial world nears its end, and so does the multinational
corporation. ” From this statement we can see that internationalization is the only way to success.

International market offers the world’s commercial opportunities for companies around the
world seeking to sell or purchase products. Not only can you tap into the 6. Billion people in the
world market, but according to business. Gob, companies doing international business grew
rapidly and fail less often than companies that don’t. And there are plenty advantages of
company go international.

For example: increased sales and profits, increased innovation, culture exchange, and economies
of scale. So why not take advantage of all that international trade has to offer? 6/13 5. 0 5. 1
China If the green toy company considers a higher international expansion, my first choice
country is China. China has the world’s top-ranked population; the government in order to
control ten population, can Tamely can only nave one canny, wince leads to each family doting
on children.

So the spending on toy for children is the highest. According to Table 2, Breakdown of average
total spending on 0-3-years-olds, by product category 2009 in Green toy case study). 5. 1. 1
Marketing Segmentation Population Largest population over the world Income level Middle
Education level Upper Language Mandarin, Cantonese Religion Chinese ancestral worship(56.
2%) Muslims(l .

7%), Christians(2. 4%), 7/13 China has the largest population all over the world. And the
population of children geed 0-4 years are about 80 million. China’s per capita GAP rose from $
1,135 in 2002 to 2011 of $ 5,432. Rank No. 84 all over the world.

China’s education level also need to continue to improve.

The Chinese government is accelerating the development of education, scientific and cultural
qualities of the population are continuing to increase every year. In China, there are two
commonly used languages, Cantonese and Mandarin. Because of China’s population is very
large, so there are many religion Delete wince essence ancestral worship(5 Christians(2. 4%),
non-belief (12%) and other beliefs. 5.

1. Marketing Entry Strategy Contract Manufacturing 5%), Muslims(l Contract manufacturers

produce products suitable for the market to their own customers and other organizations
complete product assembly.
Because China is far away from the Green Toy Company in US. So the idea of transportation of
materials is unwise. And spending in China’s raw materials and labor is relatively low, so the
strategy to enter the Chinese market, I would recommend a contract manufacturer.

8/13 The advantage of contract manufacturing in china 0 Cost saving The companies may gain
an apparent cost advantage by using a low-cost contract manufacturer. 0 Operational advantages
A company can achieve significant operational benefits through contract manufacturing.

If demand increases, for example, a company can hire more production capacity to meet short-
term needs, without having to invest in their own facilities. 9/13 5. 2 Japan 5.

2. 1 Marketing Segmentation (2014) High Japanese Religion Shinto, Buddhism 10/13 According
to the latest data show that in 2014 Japan’s population is 127,220,000, of which the population of
children 0-5 years of age is approximately 1 according to 2010 data tables show that in Japan, the
population of less than 14 years s 13%, but consumption is 320 dollars per child, ranked No. 4.
Japanese income levels and education levels are relatively high case.