UNIT 1: INTERNATIONAL TRADE

IV. Match up these words and expressions with the definitions below:
1. trade in goods K. visible trade (GB) or
merchandise trade (US)
2. trade in services (banking, insurance, tourism, and so on) H. invisible imports and exports
3. direct exchanges of goods, without the use of money L. barter or counter-trade
4. the difference between what a country receives and pays for its G. balance of trade: cán cân
exports and imports of visible goods thương mại
5. the difference between a country’s total earnings from all exports D. balance of payments: cán
and its total expenditure on all imports cân thanh toán quốc tế
6. the (impossible) situation in which a country is completely self- A. autarky: nền kinh tế tự cung
sufficient and has no foreign trade tự cấp
7. a positive balance of trade or payments F. surplus: thặng dư
8. a negative balance of trade or payments B. deficit: thâm hụt
9. selling goods abroad at (or below) cost price E. dumping: thủ đoạn bán phá
giá
10. imposing trade barriers in order to restrict imports M. protectionism
11. taxes charged on imports L. tariffs: thuế quan
12. quantitative limits on the import of particular products or C. quotas: hạn ngạch
commodities
V. Replace the underlined words and expressions in the text with the words and expressions below.
1. Countries I. nations
2. raw materials and goods E. commodities
3. difference between total earnings from visible B. balance of trades
exports and total expenditure on visible imports
4. difference between total earnings from all A. balance of payments
exports and total expenditure on all imports
5. direct exchanges of goods without the use of C. barter or counter-trade
money
6. the favoring of domestic industries K. protectionism
7. inputs H. factor of production
8. weather conditions D. climate
9. specialization of work into different jobs F. division of labour
10. savings in unit costs arising from large-scale G. economies of scale
production
11. taxes charged on imports M. tariffs
12. restrictions on the quantity of imports L. quotas
VI. Choose the best alternative to complete the sentence
1. Many countries, such as the United Kingdom and New Zealand, are ________ dependent on international
trade.
A. favourably B. heavily C. perfectly D. grossly
2. The fact that labour costs are lower in other countries, ___________ us at a tremendous disadvantage
A. makes B. does C. puts D. sells
3. If a country has a ________ currency, importers and exporters may have to keep changing the prices of
their goods.
A. swimming B. flying C. flowing D. floating
4. Some countries try to be _______ in certain commodities so that they are not dependent on imports.
A. economic B. sufficient C. self-sufficient D. self-financing
5. It’s better to start exporting on a small _______ and then expand if things go well.
A. measure B. measurement C. scale D. rate
6. Because of high shipping costs, it made more sense to _______ a manufacturer to produce our range of
furniture.
A. license B. lease C. control D. handle
7. The government has imposed protective tariffs to stop the ________ of cheap imports which threatened to
destroy domestic industries.
A. rain B. famine C. flood D. storm
8. Some manufacturers were accused of _____, in other words selling goods abroad at a lower price than
they were sold domestically.
A. dumping B. revaluing C. flooding D. devaluation
 UNIT 1: BUSINESS – GOVERNMENT TRADE RELATION (PART 2)
7. Which of these is an economic motive for nations’ attempts to influence international trade?
a. To pursue strategic trade policy b. To protect jobs
c. To respond to unfair trade d. To preserve national security
24. Anti-dumping duty is an additional tariff on an imported product that a nation believes is being dumped
on its markets.

I. Gap-filling:
1. If a country can produce something more cheaply than anywhere else in the world, it has a (an) absolute
advantage.
2. A country exporting more than its imports has a trade surplus.
3. Autarky is the (impossible) situation in which a country is completely self-sufficient and has no foreign
trade.
4. Countries that export a lot of oil or manufactured goods tend to have a positive balance of trade.
5. The WTO has established rules for trade between nations.
6. Balance of payments is the difference between what a country pays for all its imports and receives for all
its exports
7. Many economists encourage governments to abolish import taxes and have complete free trade.
8. Importing and exporting are the two aspects of foreign trade: a country spends money on goods it
imports and gains money through its exports.
9. Unlike quotas, tariffs produce revenue for the government.

II. Q&A
1. What brings the absolute advantage or comparative advantage to a country?
- Abundant natural resources and materials
- Cheap labour
- Advanced technology
- Technical Expertise (Trình độ chuyên môn)
2. What are the reasons for imposing tariffs?
- Protect domestic companies/ infant industry
- Protect local Jobs
- Generate revenues for the government/sources of government revenue
- Reduce Balance of Payments deficits
- Protection against Dumping
- Make imported goods more expensive than home-produced substitutes.
3. What are the harmful effects of a large trade deficit? (Bỏ)
4. Three ways in which businesses benefit from international trade? (Bỏ)
5. What is the difference between the balance of trade and balance of payment?
- Balance of trade: includes imports and exports of visible goods.
- Balance of payments: considers all business transactions with other countries including exports and
imports of goods and services and money earned from and paid for services and investments.
6. Why would government impede free trade?
- Political Motives:
+ Protecting jobs
+ Preserving national security
+ Responding to other nations’ unfair trade practices
+ Gaining influence over other nations
- Economic Motives:
+ The protection of young industries from competition
+ The promotion of a strategic trade policy.
- Cultural Motives: the protection of national identity
7. What are the methods used by the government to restrict trade?
* 6 methods to restrict trade:
- Tariffs: This is a government tax levied on a product as it enters or leaves a country.
- Quotas: This is a restriction on the amount (measured in units or weight) of a good that can enter or leave a
country during a certain period of time.
- Embargoes: This is a complete ban on trade (imports and exports) in one or more products with a particular
country.
- Local Content Requirements: These are laws stipulating that a specified amount of a good or service be
supplied by producers in the domestic market.
- These requirements can state that a certain portion of the end product consists of domestically produced
goods or that a certain portion of the final cost of a product has domestic sources.
- Administrative Delays: These are regulatory controls or bureaucratic rules designed to impair the rapid
flow of imports into a country.
- Currency Control: These are restrictions on the convertibility of a currency into other currencies.
8. Explain the different ways of promoting international trade?
* 4 ways of promoting international trade:
- Subsidies: This is financial assistance to domestic producers in the form of cash payments, low-interest
loans, tax breaks, product price supports, or some other form.
- Export Financing: This is a loan to exporters that they would not otherwise receive or loan at below-market
interest rates.
- Foreign Trade Zones: a designated geographic region in which merchandise is allowed to pass through
with lower customs duties (taxes) and/or fewer customs procedures.
- Special Government Agencies: Organize trips abroad for trade officials and businesspeople and open
offices abroad to promote home country exports.

III. Essays
1. What are the pros and cons of free trade?
* Pros:
- FT increases production – countries specialize in the production of those commodities in which they hold
comparative advantage.
- FT improves the efficiency of resource allocation.
- Customers have access to a wider choice of products and services available – updated styles, international
trends.
- Foreign exchange gains.
- FT is an engine of economic growth.
- Generate revenues.
- Create jobs.
* Cons:
- Unfair trade
- Dumping
- Domestic industries may be harmed.
- Resources may be excessively exploited.
- Environment problems
2. What are the advantages of international trade? (to businesses)
* Government: (optional)
- Better allocation and utilization of natural resources
- Create more jobs
- Economies of scale
- Maintain sufficient supplies
- Diversify product ranges
* Businesses:
- Access new markets, and new materials which open up new production possibilities.
- Gain a global market share and reduce dependence on existing markets.
- Deal with new trading partners.
- Promote sales and profitability
- Encourage innovation by facilitating exchange of know-how, technology and investment in research and
development.
- Extend customer base of the existing products.
- Maintain cost competitiveness in your domestic market.
- Obtain raw materials from abroad.
 UNIT 2: FOREIGN DIRECT INVESTMENT
I. Gap-filling
1. A cash grant is called an incentive, whose purpose is to attract/promote FDI
2. Most companies give foreign companies tax incentives to attract more investment
3. What kind of ROI can I expect from my investment

II. Q&A
1. What are the differences between FDI and FPI?
PI FDI
- Be made without leaving the home country - Involve the establishment of plants or distribution
through an international investment broker or a networks abroad.
banking institution.
- Investors buy shares and debentures that can be - A long-term commitment where capital funds will
liquidated at market value at any time. be tied up for a long time.
- Don’t take the control of the company. - Have the objective of controlling or sharing
control over production, R&D and sales.
2. What are some financial considerations in making a foreign direct investment?
- Return on Investment (ROI)
- Costs of production
- Investment incentive/Financial incentive
- Exchange rate
- Interest rate
- Cash flow
- Sources of working capital
3. What are the important management issues in the FDI decision?
* 6 management issues: Control, Purchase or Build Decisions, Production Costs, Customer Knowledge,
Following Clients, Following Rivals
- Control: When many companies invest abroad greatly concerned with controlling the activities occurring
in the local market of reasons.
- Purchase-or-Build Decision: Another matter of concern is whether to purchase an existing business or build
an international subsidiary from the ground up (called a greenfield investment)
- Production Costs: One approach companies use to contain production costs is rationalized production – a
system of production in which each of a product’s components is produced in the location in which the cost
of producing that component is lowest.
- Customer Knowledge: A local market presence might help companies gain valuable knowledge about the
behavior of buyers that it could not obtain from the home market.
- Following Clients: Firms commonly engage in FDI when doing so puts them close to firms for which they
act as supplier.
- Following Rivals: Companies engage in FDI simply because a rival does.
4. For what reasons do host countries intervene in FDI?
- To protect their balance of payment: Give a nation a balance-of-payment boost.
- Obtain Resources and Benefits:
+ Access to Technology
+ Management skills
+ Employment
5. For what reasons do home countries intervene in FDI?
- Sending resources out of the home countries and lowering the BOP
- Damaging BOP by taking place of its exports
- Jobs
 6. What are the methods used by host countries to restrict and promote FDI?
- Restrict: Ownership restriction and performance demands.
+ Ownership restriction: Governments can impose ownership restrictions that prohibit nondomestic
companies from investing in businesses in cultural industries and those vital to national security.
+ Performance demands: Governments can also create performance demands that influence how
international companies operate in the host nation.
- Promote: Financial incentives and infrastructure improvement
+ Financial incentives: Host governments can also grant companies tax incentives such as lower tax rates or
offer to waive taxes on local profits for a period of time.
+ Infrastructure improvement: Better seaports suitable for containerized shipping, improved roads, and
increased telecommunications systems.
7. What are the methods used by home countries to restrict and promote FDI?
- Restrict: Differential tax rates and outright sanctions
+ Differential tax rates: Charge income from earnings abroad at a higher rate than domestic earnings.
+ Outright sanctions: Prohibit domestic firms from making investments in certain nations.
- Promote: Offer insurance, grant loans, offer tax breaks and apply political pressure
+ Offer insurance: Cover the risks of investments abroad
+ Grant loans: Grant loans to firms wishing to increase their investments abroad.
+ Offer tax breaks: On profits earned abroad or negotiate special tax treaties.
+ Apply political pressure: Apply political pressure on other nations to get them to relax their restrictions on
inbound investments.

III. ESSAY:
1. What are the advantages and disadvantages of FDI in VN?  host country
- Creation of jobs
- Access to high technology, advanced business practices, global management styles, new economic
concepts
- BOP boost
- Tax revenue
- Capital inflow
- Competition
- BOP may decrease when direct investors return profits made locally back to their home countries
- Environment/Ecosystem
- Local resources are vulnerable to overexploitation by foreign firms
2. Is FDI always a good thing?
3. Why do certain countries attract more FDI than others?
 UNIT 3: FOREIGN EXCHANGE TRADING
I. Gap-filling
1. Foreign Exchange Market is a market in which currencies are bought and sold and in which currency
prices are determined.
2. Dealer using two foreign exchange markets to benefit from rate differentials are said to engage in
arbitrage.
3. Speculators buy currencies when they expect their value to increase.
4. Increasing currency speculation is making exchange rates more volatile.
5. Hedging is the attempt to reduce risks; speculating is the opposite.
6. The Bretton Woods Agreement stipulated that all members would express their currencies in U.S. dollars.
7. Gold Standard is an international monetary system in which nations linked the value of their paper
currencies to specific amount of gold.
8. Bretton Woods Agreement was an accord among nations to create a new international monetary system
based on the value of the dollar.
9. Hedging is the attempt to reduce risks; speculating is the opposite.
10. Bartering is based on the exchange of goods for goods.
11. When central banks intervene in the foreign exchange markets at the intervention points, this is called
the system of fixed exchange rates. The opposite is called the system of floating exchange rates.
12. Central Bank of the member countries were required to intervene in the foreign exchange markets to
keep the value of their currencies within 1 percent of the par value.
13. A forward transaction means that delivery of a currency is specified to take place at a future date.
14. Arbitrage is the practice of transferring funds from one currency to another to benefit from rate
differentials.
15. Another verb for fixing exchange rates against something else is to pegging them.
16. A currency can appreciate if lots of speculators buy it.
17. In fact, we have managed floating exchange rates, because governments and Central banks sometimes
intervene on currency markets.
18. Commodities are raw materials such as agriculture products and metals that are traded on special
exchanges.
19. If you hedge, you make transactions that are designed to reduce risks regarding a particular price,
interest rate or exchange rate.
20. A speculator anticipates future changes in a market and makes risky transactions, hoping to make a gain.
21. The Foreign Exchange Market is the mechanism through which foreign currencies are traded.

II. Q&A
1. For what four reasons do investors use the foreign exchange market?
* 4 functions of the Foreign Exchange Market:
- Currency Conversion: to convert one currency into another.
- Currency Hedging: to insure against potential losses that result from adverse changes in exchange rates.
- Currency Arbitrage: to earn profits from arbitrage - the instantaneous purchase and sale of a currency in
different markets.
- Currency Speculation: to purchase or sell a currency with the expectation that its value will change and
generate a profit.
2. What is the foreign exchange market?
- The foreign exchange market is an over-the-counter (OTC) global marketplace that determines the
exchange rate for currencies around the world.
- Foreign exchange Market: Market in which currencies are bought and sold and in which currency prices
are determined.
- Foreign exchange market: Mechanism through which foreign currencies are traded. It is not an actual
market place but a system of telephone or telex communications between banks, customers, and middlemen
– trung gian (foreign exchange brokers, acting for a client vis-à-vis the bank).
3. Distinguish between spot rate and forward rate. How is each used in the foreign exchange
market?
- Spot exchange rates: the exchange rates that require delivery of the traded currency within two business
days.
- Forward exchange rate: The rate at which two parties agree to exchange currencies on a specified future
date.
4. Explain the differences among currency swaps, options, and futures.
- A currency swap is the simultaneous purchase and sale of foreign exchange for two different dates.
- Currency option: a right, or option, to exchange a specific amount of a currency on a specific date at a
specific rate.
- Forex Futures: are subject to rules and regulations and are transacted on established Exchanges. Currency
Futures exchange a specific amount of currency on a specific date at a specific exchange rate, with all
conditions fixed and not adjustable.
5. Describe the three main institutions in the foreign exchange market.
- Interbank Market: Market in which the world’s largest banks exchange currencies at spot and forward
rates.
- Securities Exchanges: Exchange specializing in currency futures and options transactions.
- Over-the-counter Market (OTC): Exchange consisting of a global computer network of foreign exchange
traders and other market participants.
6. Why are restrictions placed on currency conversion: What policies can governments use to
restrict currency conversion?
- Governments impose currency restrictions to achieve several goals:
+ To preserve a country’s reserve of hard currencies with which to repay debts owed to other nations.
+ To preserve hard currencies to pay for imports and to finance trade deficits.
+ To protect a currency from speculation.
+ To keep resident individuals and businesses from investing in other nations.
- Policies used to enforce currency restrictions include:
+ Government approval for currency exchange
+ Imposed import licenses
+ A system of multiple exchange rates
+ Imposed quantity restrictions
7. What are the main functions of the central bank?
- Functions of Central Bank:
+ Implementing monetary policy
+ Providing the nation’s money supply
+ Being the Government’s banker and the bankers’ bank (“lender of last resort”)
+ Managing the country’s foreign exchange and gold reserves and the Government’s stock register.
+ Regulating and supervising the banking industry.
+ Setting the official interest rates – used to manage both inflation and the country’s exchange rate – and
ensuring that this rate takes effect via a variety of policy mechanisms.
III. Essay-writing
1. What are ways of making money on the foreign exchange market?
* 4 functions of foreign exchange market:
- Currency Conversion: to convert one currency into another.
Example: Phục vụ International Trade và Investment như nào
- Currency Hedging: to insure against potential losses that result from adverse changes in exchange rates.
- Currency Arbitrage: to earn profits from arbitrage - the instantaneous purchase and sale of a currency in
different markets.
- Currency Speculation: to purchase or sell a currency with the expectation that its value will change and
generate a profit.
 How traders, Investors, Speculators make money on the foreign exchange market?
 Examples: Việt Nam đổi tỉ giá như nào, chênh lệch tỉ giá như nào giữa đồng Đô La Mỹ và VNĐ.
(Khó và khô khan)
 UNIT 4: PAYMENT IN INTERNATIONAL TRADE
I. Gap-filling
1. In the documentary collection, if the importer dishonors the bill, the exporter may have to find an
alternative buyer or ship the goods back.
2. The first step of the procedure for documentary collection, the exporter’s task is to ask his bank to draw a
bill of exchange on the overseas buyer.
3. Documentary collection is payment by bill of exchange to which commercial documents and sometimes
a document of title are attached.
4. A document by which a buyer undertakes to pay a seller through a bank if the seller delivers the goods
according to terms of the contract. It can be documentary or irrevocable letter of credit.
5. Open account is the most secure mode of payment for the importer.
6. Advance payment is the most secure mode of payment for exporters.
7. In some parts of the world, banks may be slow to remit payment to the exporter’s banks.
8. Export/Import financing in which a bank acts as intermediary without accepting financial risks:
Documentary collection.
9. Export/Import financing in which an exporter ships merchandise and later bills the importer for its value
is open account.
10. Export/Import financing in which an importer pays an exporter for merchandise before it is shipped is
advance payment.
II. Q&A (Câu 1, 2, 3, 4, 5, 11)
1. What are roles of banks in the four common payment methods?
- Active Role: Banks get involved in the payment process, supporting both importers and exporters through
Letter of Credit (L/C) - checking the accuracy of docs, and guaranteeing payment.
- Passive Role: transfer docs and funds through documentary collection (D/C), open account, and advance
payment.
2. What are the risks for the exporter on documentary collection method of payment?
- Non-payment;
- Late payment;
- The Goods may not be accepted.
3. What are the risks faced by exporters in the 4 common payment methods?
- Open Account: Non-payment. The exporters lose control of the Goods
- Collection: Importer may fail to accept the bill of exchange (B/E), or dishonor the accepted B/E at
maturity. The exporters may have to ship the goods back home.
- Letter of Credit: few risks. Failure to present compliant docs to the bank will result in the Exporters losing
the protection of the credit.
- Advance Payment: No risks associated with non-payment. The Exporters receive payment in full before the
goods are dispatched.
4. What is the difference between documents against payment (D/P) and documents against
acceptance (D/A)?
- Documents against payment (D/P): The buyer can only receive the documents once he has paid the sight
draft. The seller retains title to and control over the goods until he gets payment.
- Documents against acceptance (D/A): The buyer can get the documents just by accepting payment on a
future date. The buyer writes the word “ACCEPTED” on the draft and signs it.
5. How does a documentary collection differ from a letter of credit as a means of financing
international trade?
- Documentary Collection: The bank acts as an intermediary. The banks do not verify the documents, take
risks, or guarantee payment. The banks just control the flow of documents.
- Letter of credit provides increased assurance to both exporters and importers so long as they fulfill their
obligations. The bank not only verifies the document accuracy and authenticity, but also guarantees
payment.
6. Which payment method is the most commonly used between countries? Why? (Bỏ vì có Essay)
Letter of Credit
7. Why is letter of credit the popular method of payment in international trade? (Bỏ vì Essay)
- More secure, safe, watertight
- Protects both Importers and Exporters
8. Why would an exporter ask for a confirmed letter of credit? (Bỏ)
- The risks of issuing banks are borne by the confirming bank. If the importers’ bank gets out of business
(stop operating), the confirming bank is obliged to pay the letter of credit.
9. What is the role of the banks in international trade? (Tương tự câu 1 – Bỏ)
10. What payment methods do you know that are used when exporting or importing goods? (Bỏ)
11. When do people use the 4 payment methods?
- Open Account: 2 sides have long-established trading relation.
- Advance Payment: 2 sides are unfamiliar.
- Letter of Credit: The importer’s credit rating is questionable, the exporter needs an letter of credit to obtain
financing.
- Collection: there is ongoing business relation between the parties.
III. Essay-writing
1. Why is Letter of Credit the commonest method of payment in international trade?
Chỉ nói Advantages of Letter of Credit.
2. What are the advantages and disadvantages of Letter of Credit?
* Advantages:
- Letter of Credit provides security for both exporters and importers
- Exporter is protected against the risk of non-payment – The issuing bank (confirming bank) will pay the
Exporters.
(Letter of Credit is a separate contract on its own right, unconnected with the Sales Contract. Despite the
disputes between the Exporters and Importers, the bank is obliged to pay the Letter of Credit.)
- Letter of Credit protects the Importers against the risks of receiving wrong goods, missing goods, and
inferior goods.
(The Bill of Lading (B/L) required for payment by a Letter of Credit must be clean = The goods are shipped
in perfect condition)
* Disadvantages:
- Banking fees/ high bank charges
- The process is complicated – time and money.
3. What are the advantages and disadvantages of Open Account method of payment?
* Advantages:
- Simple to administer and involve minimal banking fees or other costs.
- Attractive, favorable to the Importers. Importers may have opportunities to examine the goods before
making payment.
- Avoid the risks of non-, late, wrong delivery, faulty, defective goods.
- Competitive payment terms to win customers.
* Disadvantages:
- Not popular
- Of high risks to the Exporters – Exporter has no protection, just relies on the honor of the Buyer in
payment.
=> Secured by using the 3rd-party guarantees: Export credit insurance and Payment Guarantee.
 UNIT 5: MARKETING
I. Gap-filling
1. Countermarketing is the attempt to destroy unwholesome demand for products that are considered
undesirable, e.g. cigarettes, drug, handguns, or extremist political parties.
2. Points of sales are places where goods are sold to the public – shops, stores, kiosks, market, stalls, etc.
3. The classic product life cycle is Introduction, Growth, Maturity, and Decline.
4. Distribution channel refers to all companies or individuals involved in moving a particular good or
service from the producer to the consumer.
5. Word of mouth is free advertising, when satisfied customers recommend product to their friends.
(?) 6. Existing customers tell their friends or colleagues about your product and hopefully recommend it to
them: ___________.
7. Synchromarketing involves altering the times pattern of irregular demand.
8. The best form of advertising is free word-of-mouth advertising, which occurs when satisfied customers
recommend products or services to their friends.
9. Remarketing involves revitalizing falling demand, for example, for churches, inner city areas, or aging
film stars.
10. Demarketing is the attempt (by the governments rather than private businesses) to reduce overfull
demand, permanently or temporarily.
II. Q&A
1. What is the difference between selling concept and marketing concept?
- Selling: Persuading the customers to pay for products that you already have, rather than producing new
products which customers may want.
- Marketing: Finding out what kinds of products customers want and then producing them. (Finding wants
and filling them)
2. Distinguish needs, wants, demands.
- Needs are basic human requirements.
- Wants are needs directed to specific objects which might satisfy the need.
- Demands are wants for specific products backed by an ability to pay.
3. Identify at least 4 factors that influence a company’s product policies in international markets.
- Companies undertake mandatory product adaptation in response to a target market’s laws and regulations.
- Companies also adapt their products to suit cultural differences.
- Although companies keep their brand names consistent across markets, they often create new product
names or modify existing ones to suit local preferences.
- The image of a nation where a company is located that designs, manufactures, or assembles a product
influences buyers’ perceptions of quality and reliability.
- Counterfeit goods can damage buyers’ image of a brand when the counterfeits are of inferior quality.
- Shortened product life cycles are affecting the timing of when to market internationally.
4. Briefly describe the difference between a push strategy and pull strategy. What are some factors
that affect the choice of an appropriate strategy?
- Pull strategy: A promotional strategy designed to create buyer demand that will encourage channel
members to stock a company’s product.
Example: Creating consumer demand through direct marketing techniques is a common example of a pull
strategy.
- Push strategy: A promotional strategy designed to pressure channel members to carry a product and
promote it to final users of the product.
Example: A push strategy is often used by manufacturers of all sorts of products commonly sold through
department and grocery stores.
 5. What are the five generic strategies for blending product and promotional policies for
international markets? Describe each briefly.
- Product/communications extension (dual extension) extends the same home-market product and marketing
promotion into target markets.
- Product extension, communications adaptation extends the same product into new target markets but alters
its promotion.
- Product adaptation, communications extension adapts a product to the requirements of the international
market while retaining the product’s original marketing communication.
- Product/communications adaptation (dual adaptation) adapts both the product and its marketing
communication to suit the target market.
- Product invention requires that an entirely new product be developed for the target market.
6. What is the difference between exclusive and intensive channels of distribution? Give an example
of a product sold through each.
- An exclusive channel is one in which a manufacturer grants the right to sell its product to only one or a
limited number of resellers.
Example: New car dealerships in most countries reflect exclusive distribution. Thus, Honda dealerships
cannot normally sell Toyotas, and Chrysler dealers cannot sell Fords.
- An intensive channel is one in which a producer grants the right to sell its product to many resellers.
Example: Large companies whose products are sold through grocery stores and department stores typically
take an intensive channel approach to distribution.
III. Essay-writing
1. How important is Marketing to the Society?
- A connection between the consumer and the producer which brings new items to retail stores/shops – from
where the consumers can buy them.
- Through marketing campaigns, people are better informed of the products and services available on
market, thus making good choices with regard to satisfying their needs.
(Without Marketing, businesses cannot create awareness about their products or build their brands and
consumers cannot have a wide variety of choices to make the best purchasing decisions for themselves)
=> Marketing creates a win-win situation for both businesses, who can increase their sales and profits, and
consumers who can satisfy their needs with the most suitable products.
- Marketing enhances employment opportunities – For continuous production, continuous marketing is
needed. Increased activities provide more jobs for many people.
(Example: Nowadays, marketing is regarded as a separate field itself with various career paths such as
advertising, sales, public relations, and customer services. Almost all companies have their own marketing
department with different positions, providing jobs for millions of people.)
- Marketing helps in selling surplus items abroad/ to other countries, raising the national income and
generating government revenue. (This is because advertising creates demand for products and services,
which results in increased exports and even foreign exchange earnings.)
 UNIT 6: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
I. Gap-filling
1. Outbound logistics is the process related to the storage and movement of the final product and the related
information flows from the end of the production line to the end user.
2. Inbound logistics is the flow, or management, of goods into a production unit or warehouse.
3. Logistics is the management of the flow of goods, information and other resources, between the point of
origin and the point of consumption.
4. Supply chain is a network of facilities that performs the function of procurement of materials,
transformation of these materials into finished products, and the distribution of these products to customers.
5. Logistics management is a part of supply chain management, which plans, implements, and controls the
flow and storage of goods between the point of origin and the point of consumption.
6. Custom clearance is the act of passing goods through customs so that they can enter or leave the country.
7. Inventory contains the raw materials, the work in process and all the finished products of a supply chain.
8. Transportation is the movement of product from one location to another as it makes its way from the
beginning of a supply chain to the customer’s hand.
9. Supply chain management is the management of materials, information, and finances as they move in a
process from supplier to consumer.
10. Reverse logistics is the process of moving products from end-user back to the origin to recover value or
for proper disposal.
II. Q&A
1. What are the major benefits of efficient logistics operations?
- Cost-savings
- Faster order-fulfilment
- Optimized distribution
- Improved Cashflow
- Increased customer satisfaction
2. What may cargo handling services include?
- Cargo collection and cargo consolidation
- Cargo forwarding
- Cargo tracking and tracing
- Transit warehousing
- Documentation Handling
- Custom Clearance
3. In what ways would the supply chain be optimized? (bỏ)
4. What are the five major logistics activities?
- Demand forecasting and planning
- Material Handling
- Logistics Communication
- Inventory Management
- Customer Service
5. What business functions does the supply chain involve?
- Sourcing
- Procurement
- Material Handling
- Forecasting
- Order Processing
- Manufacturing
- Logistics
- Transportation
- Inventory Management
- Warehousing
- Customer Service
III. Essay-writing
1. What are the benefits of supply chain management?
* Customer Satisfaction:
- With effective SCM, companies are able to respond to customers’ needs and to make punctual deliveries.
- A streamlined SC process can improve the total order cycle time (the amount of time between an order
being placed and when it is delivered to a customer).
=> This not only pulls new customers but also influences the company’s brand loyalty.
* Effective/Controlled Inventory Management
- The right SCM system ensures that companies have a well-organized warehousing and inventory control
system in place to reduce holding costs on excess inventory while still meeting customers’ needs.
=> This mitigates potential risks of late shipments and increases customer retention.
* Improved Quality Assurance:
- SCM incorporates quality techniques to improve operations such as quality management systems.
- SC professionals incorporate regular audits of their vendors and raw materials into the SCM process to
enhance the consistent level of product quality.
* Reduced Costs:
- The SCM enables the manufacturers to assess their current manufacturing processes, identifying flaws and
inefficiencies and determining the best course of action to address the issues.
- The smooth process of production reduces costs and increases profits.
* Shipping Optimization:
- Recognizing the most efficient shipping methods for small packages, large bulk orders and other shipping
scenarios helps companies deliver orders to customers faster while keeping costs minimum.
Free trade, the unrestricted flow of goods and services across borders, has both benefits and
drawbacks. This essay provides an overview of the pros and cons of free trade, considering
advantages such as increased production, efficient resource allocation, consumer choice, foreign
exchange gains, economic growth, revenue generation, and job creation. It also explores concerns
related to unfair trade practices, dumping, harm to domestic industries, excessive resource
exploitation, and environmental problems.
Free trade offers several advantages:
1. Increased Production: Free trade allows countries to specialize in areas of comparative
advantage, leading to enhanced production efficiency and economic growth.
2. Efficient Resource Allocation: By enabling countries to allocate resources to their most
productive sectors, free trade promotes economic efficiency.
3. Consumer Choice: Free trade provides consumers with access to a wider range of products
and services, fostering competition and innovation.
4. Foreign Exchange Gains: Engaging in free trade generates foreign exchange through
exports, contributing to economic stability and growth.
5. Engine of Economic Growth: Free trade stimulates investment, innovation, and
competition, driving economic growth across sectors.
6. Revenue Generation: Increased exports generate income for countries, aiding economic
development and reducing trade deficits.
7. Job Creation: Free trade can create job opportunities, particularly in export-oriented
industries and sectors benefiting from increased competition.
There are also certain drawbacks to consider:
1. Unfair Trade Practices: Free trade can lead to unfair practices, such as subsidies or currency
manipulation, creating an uneven playing field.
2. Dumping: Dumping occurs when goods are exported at prices below production costs,
potentially harming domestic industries.
3. Harm to Domestic Industries: Some domestic industries may struggle to compete with
lower-cost imports, leading to closures, job losses, and reduced self-sufficiency.
4. Excessive Resource Exploitation: Free trade may result in the overexploitation of resources,
particularly in countries with weak environmental regulations.
5. Environmental Problems: Long-distance trade and goods produced with lax environmental
standards can contribute to environmental degradation.
Free trade presents a complex array of advantages and disadvantages. While it promotes
increased production, efficient resource allocation, consumer choice, foreign exchange gains,
economic growth, revenue generation, and job creation, it also raises concerns about unfair
practices, dumping, harm to domestic industries, excessive resource exploitation, and
environmental problems. Striking a balance through well-designed policies is crucial to
maximize the benefits of free trade while addressing its negative impacts. By doing so,
countries can harness the potential of free trade for sustainable and inclusive economic
development.