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    Unit 3 IM

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    > MCOM = Internati 66 Nikita Solved Paper” (MCDM "_Ceernen onal Mi, OM - International Marketing) 67 a thay | 3 (MC Marketing) a UNIT - 3 x one ee ffs means thal the product conformation | Be connec 5 from any kind of defect. For example, both to certain stance: air conditions are of standard quality and satisfy the 7. Quality Issues & After Sales Servic OH ec aperaro te oe ( oe HOW TO MAINTAIN QUALITY 1: What do you mean by quality of product ? Describe g ‘The quality of a product can be ensured if the manufacturer takes manauretne i ction to maintain quality at two levels. i i e techniqu Within the enterprise : OR What fs quality 7 What are the TESHIAHSS OF qual) nthe sppy cain (aw metal procurement) it j terprise : The management should persuade its OR. What do you mean Oy to gual manage SO hve carrect ‘attitude towards quality of the product right the elements and features of total quality management, ) from manufacturing process to packaging. The employees should not look Answer : * for the “easiest” way to do things, but should do the things in the "correct" QUALITY ISSUES way, even if correct way is difficul curt pct te rious stages of produ Quality of a producti one of the important factors for entering tp be a - Wy ofthe product st eo omy serie survival in foreign markets. Thus, it becomes essential for the exporter) ensure qual is done through ‘Quality Manua’’. ensure that the goods of quality desired by the importer, are sent to hin! from which the product ty. For this, consistency in the quali suppliers has to ensured. This i goods before their despatch. An exporter faces competition not only fy supplies (raw materi the exporters from his own country but also from other countries. He sha the supply chain qu therefore, formulate a proper quality strategy to gain competitive edge en others. ae OF Total Quality Management (TQM) { _ ___ Goods of poor quality not only spoil’exporter’s own market but a ‘The importance of maintenance of quality standards of products, y bring bad name to the image of the country. Itis, therefore, in the busin, has led to the development of total quality management system. As per thi interest of the exporter to send goods of right q concept, the manufacturer maintains quality standards notin relation to th Meaning of Quality : final product but also in relation to all aspects of functioning of the enterprise. Quality of a product is a set of attributes or specification : The concept of total quality management system is based on the packaging specifications ion to a given product or service.’ philosophy that quality standards, atall stages of operations of an enterprise The American Society for Quality defines qual ‘commencing from purchase of materialto the inal despatch of goods, should features and characteristics of a prodi be condified and strictly followed. d needs’. Review of quality standards : Top management should review the organization's quality management systems from time to time to ensure its suitability, adequacy ‘and effectiveness. This can be done through customer feedback and their complaints. 1SO Certification Itis good to have one’s own system of maintenance of quality management but certification of such a system by some independent reputed ‘agency enables an exporter to gain the confidence of customers. The International Organization for Standardisation (ISO) has development series of international quality standards, popularly known 2s 1SO -9000 servies. These standards provide framework for third party | Cettfication of quality systems. CONFORMANCE QUALITY Performance quality : It refers to level of satisfaction provi the product tothe consumer. For example, performance of O Gene conditioner is better than of Samsung’ or 'L.G'. Tho: af purchase better performing goods. mene al Mari r* (MCO Party cafe d Paper’ (MCOM. tnt ies at sa jad mstianing good flash Yaécleme tt 1SO standard have been agaple’ Tray convey othe ctor the products and servis of desired @ ; ; rds guide the suppliers’ ‘and. manufacturers: " i srecmimaniianee product The Standards OF ~~ Toensure that sub standard goods are not exported from india wij, may bring bad name to the country, compulst hips manufacturers give replace it jvatter-sales pe ‘Service after the warranty pe the goods need repair afte smanufecturer.will provide repair faci ioidhe;countrysis 5 3 o alislétee Servicing : Some manu ihe;preductifor a year or so, Servi unctioning'of the product. a‘ ovjiostab ad For example, car manufacturers gi vige coupans for cars ' 1e purchaser.can get his car. serviced free. of cosh, ten assuiranc 1’ goods sold ifthey areifound to during specific period " jéar“and tear andsby Shamash ing Is'not covered Utider the warranty guarantee: yiileup Yo ve advantages of after-sales'services can be Sates 92 “S°°(A) Advantages to the seller of the product and, (8) ‘Advaritaggs to the consumers. eeviovn wees Adyantag f the product } ees P ing qua | re ee golved Paper” (MCOM - International m: Tas hein) n = gorvice for a specific p thas been Observed that many gta ya, make UNNECESSArY complaints, even when the geese ey Ay Winn a openly but since all complaints have to be attended to irony S10 het the oe cont a Fasary increase in the cost of providing after-sales serving defective, it gives tisfaction guarantee provides 82 ESSENTIALS OF GOOD AFTER-SALES SERVICE mpt and efficient : The after-sales service sho Ke be 1's assured that th nee period, the consumer foe "0 SN picnac wb stacy repaired By tho gph) reasonable charge. es ca 7 rantee of aller-sales Service is py, Rea a yt i fled, the customer wil purchaee mufacturer in future also, jarantee about the (3) Increase in goodwil ja selier gives gue Pro vos provides satistactory after-s les services, it enhances ‘goodwill and reputation in the market. \ (4) Advertisement : The iterature about the productin the form of pr Querantee card remains wth the purchaser for the pore {uarantee, which keeps on reminding him about the produc, the manufacturer which serves as advertisement for the produ. (@) Advantages to the consumers: Consumers are benefited by after-sales serivce in following way (1) Convenience in buying : When a consumer purchases a prod] backed by after-sales service, he need not to check the detail) _ ‘the quality of the product. He is assured that if the product tobe defective he willnot be put to any botheration, as the product will be replaced or repaired without. ‘any cost. (2) Assurance about repairs : Even after expiry of guarante: ‘warranty period the seller has to maintain repair services and uld be prompt tended immediately and the service should not have any idden costs. Some manufacturers claim to provide free after-saloe | Service but charge only for spare parts which are exhorbitantly priced. Such a policy proves harmful in the long run. The customers F Should be clearly told which things or parts are covered by the | warranty and which are not. 1) Clarity about cost : The consumers should be clearly told about _ (the charges for providing after-sales service, if these are being charged separately. The charges should be same for all types of customers without any kind of discrimination, Free of cost : Customers expect that the service for intial period of ‘one or two years should be provided free of cost. Instead of charging ‘separately, the seller should include it inthe cost of the goods, that way it does not pinch the consumer. Ifthe fees for af ‘tumsg|__.. is charged separately, it should be reasonable. dete Stal e corvice shouldnt be charged trequenly, The changes, if equied, should be decided after careful f to be considered in adopting after-sales service, spare parts available thus, the customer is assured that le wi Folowing factors should be carefully considered when deciding able to use the product or quite along tim, th goods willbe rep allthe time. about after-sales service policy : ein ther the customers should be charged (@) Assurance about the quality : The customer thinks when |)» The first question is whet manutacturer is providin | eaeoricpeee eae ee AFTER-SALES SERVICE 2. Excessive cost of providing after-sales ser ' soa spect acta: For am 19 after-sal increase the Cost of product to an extent that q Services, specially in a for establishment of After-sales service has to be provided in many the country. There will pair works! and storage of spare parts. All this require substantial In Cost Involvement : Provision of after which has ultimately be passed on to th the cost of the product and sometimes, Unnecessary complaints : Wher is not an easy job. It involv ‘competition. ee 4. Ifthe product involves new technology and its rep ng aces are not easily avail after-sales service should definitely bemade ot difficult to find buyers. 42 Customers should be service contract after the expiry of warranty paver on Crh of extra fees. It is called annual maintena’ rl Me M- International yikita Solved Paper” (CO 2g ivad Paper” (MCOM - International Marjo By 8, International Pricing Decision & Facto, Price and determines of sales promotion 1.12: Explain in detail t How to determi OR ‘affecting to pricing intnternational Marketing a OR Discuss factors affecting price determ! Internation marketing. sales promotion. methods in ;. depending on iewed from is makes the pricing decision more i important. in Domestic and International Pricing OR Whatare the factors affecting intemational pricing deci ion) Domestic Pricing» International Pricing jods of pricing. x No expenditure on export or | Extra expenses on Vansporaion OR Discuss the various meth ee ai a Import-duy'or shipping or aie|custom dues & special nacuny , freight Answer: ' : | Not so severe. vere, trom domestic exporters INTERNATIONAL PRICING: —Corpation __ |& local nanutacturers of the Pricing's @ crucial decision ininterational marketing managemen nil [ eena on county Both price-wise {tis @!major factor influencing @ firm's total revenue from’exports to jy) giov ol! a ‘rad i Toca currency —— [eats dors SG eR OT ey ones are no hard and fast rules OF any Scientific formula tha) TT eS aCe due ib exchange ‘can be applied in intemational pricing in al situations. In intemational Foevatons I pFicing besides cost, other economic, social and political factors) ‘marketing conditions and nature of product influence the price fixation decision, Characteristics of Intemational Pricing Pricing in international marketing is Tike & tripod (a’stoot with legs): The three fegs in which export trade prices depends aré\(i):c6: ‘demand, and (ii) competition. All these three factors’ are’ ‘tipod and are equally important, | nuctuasons. rate fuctuatons. image of leading manafacirer| image of mand “rae res | difersighy. advanced cou a Ee favourbie, aves Towincome levels in developing| gh nce — counties, Low paying apactyof|counttes, can consumers. Not many—"gaveramen rebticons'on domestic rade tional 1um of the valyes that consumers exchange Prana anie ing oF using the product or service 4 stihe market 2. Price is the only element in marketing mix that produces revenue, which Gopendscnacen 8. Price Is also tho most flexible element ofthe markling mix onde ae Jn turn, depends on the a Mistake In Setting Prices ; mean no busi The most common mistakes in selling prices are : ‘4. Indicator of, to be of inferior quality. Some gous get sold only because price is high. ..a5 a high price is considered a People purchase a Merced, menos 1es car b h projects is qualy reese’ because tis priced hi ta Solves Paper” (COM International Markay, -SRCING IN INTERNATIONAL MARKET meth Mand the process of Pricing roma, Fiaed to the pricing decision when i i rkets. & : Ea an organs nents a new market in the intern, life cycle to an absolutely naw ge) ‘Anthough the paramet "Thus, as each market stands outas @ separate e! the parameters of pricing. Moreover, a product's Po: ‘curve and the firm's position on its life-cy on longer rem sacred, adding, more complexities to the pricing decision. in| Exh ae Demand and Product fe Cyclo [ce] Firm's Lite Cye ‘Supply Condition “es Firm Life-Cycle In internatos arketing operation, a firm moves from th ‘marketing stage to international marketing to tng on fT finally graduating to global marketing, oe ear on. the pricing decision... The! in two ways—the marketin Hintwoways—t 9 Process it adopis FACTORS INFLUENCING INTERNATIONAL PRICING Factors intuencing international pricing an international firm final price pofateuie objectives are cost leader, rpoing slalus quo, revenue generation, imlz nema the operations are going to take place, level of market sopt market demand and the at {he competition, produc the de ion and the focus ct market share, Profit or market share portant issues. TO gain market share and pr MMproduct, place and promotion Costs contains : long term cost target + Full cost, variable cost, marginal cost pr ‘organizational considerations are : «Transfer pricing + Cost vs. profit center ) External Factors to an Internatinal Firm ‘External factors to an international firm are nature of market is which of customer to pay, the comp etc., the various external factors are : ‘ Nature of market (buyer or sel « Level of market development / so ‘Market demand and consumers ability to buy ‘© Competitive situation and consumer surplus + Product life-cycle-stage ‘+ Type of packaging, environmental issues ‘* Distribution and marketing costs + Transportation costs = Government policies, tariffs, taxes and other restrictions # Country of origin image * After-sales service, warranties and guarantees ‘* Exchange rate fluctuation + Environmental factors + Hidden costs factors Contributing the Selection of Final Price For final selection of price following factors play a vital role : ©) Company pricing policies * Costs ‘* Impact of price on other parties * Distributors or dealers + Company sales force '* Competitors aE. COs Joternationsl Markey, * Papetashs = ikta Solved PARSE DECISIONS, Wl 76_____—-AeGRMATION FOR, FCN oft pricing Beeisig ences andlor trade agreements, if a = © gRlmmportant pre-requisite © ating t0 exPOrl progret ©. extent of 6! 8. Peconcessions, ifaniy © Fguiar avaiabity of authen'® Formation. The dewacc’ | aches. Brat inge. braid loyalty and’constimer preferen foreign market and other jean. d aikel.to-ne p 10.7 ire of market segmentation, ifany i information requirements V0, rom PI Varig if need, media and cost M ‘and fremtO-Tim “of distribution and margitis allow tn general i 109 101 enozee szailtating export pricing decision = insurance, packing, banking, trarisportation and A. Product Information tal'to export and! "O°" | 4, Production cost detall§ 2 tsfhealth and sanitary | formation necessary, 3 at the micro A ievel.cover.the following aspects =... nme faction capacity of the firm-installed as well as utlized.. | acm 2 eS ast Proportion of total production supplied to the ome market. § notes gh pieeibition cos propostion at persent exported... aoe 8 3 Castel «Competition among domestic firms in the exportfield.,... « 4 ee eee” MANAGING PRICE: ESCALATION’ IN FOREIGN MARKETS, k "if the Foriegn markets is @ difficult work, ‘of the channel and quickly iso bé taken | 7. Product guarantees \ 6: lnstaaon sid ator ales sn é 8. “Market Information ee prodiset ie fordiga’ markets : ation iarket_ place. so should be. taken, care nwob we lowest. 4) ine low price goods. * in 8"adapt the product to escape tariffs 3. Ru 7 2 ‘by shifting it to differernt tax cer ace te foie mena Gia GING IN INFLATIONAI 8 of payment offered by th ,, moet i nary environment the Import duties, border fiscal ch if 6. Major sources of supply in the iaredienid') Compone ingradiarits, parts or packaging Mm: golved Paper” (MCOM - International 30M - International Marke, Nikita solved Pape (Cr a Oty “Tata Hao oo nould be Kept short * Credit terms : The cret itt : cred Mreniator clauses in fong 0PM COMMrACts: To ot aeeeetation cos is made on stable curren, * Price quotation : Quote pric ae nt . turnover : Rapid inve : * Eapartence: Lessons from other cou aid pricing. | Marketing) 79 sts for the organisation it sts to distributes a product these elements of the mix ply and demand relationship. remaining 3P’s are the variable co: Perce eae caine 2 1510 Promote it. Prices must support t costs Pre difficult and must reflect sup, Pricing cl too high or too low could mean a lose of sales for account 10g ration . Pricing should take into the following factors 07t ~ed and variable costs. S competiton. * Gompany objectives. ; Proposed positioning strategies. * Target group and willingness to pay. METHODS / TYPES OF PRICING STRATEGIES ‘an organisation can adopt a number of pricing strategies, The strategies are based much on what objectives the company has feaitself 0 achieve. : *, penetration pricing : Where the organisation sets a low price to increase sales and market share. a 4 Skimming pricing : The organisation sets an initial high and then slowly lowers the price to make the product available toa wider market. The objectives is to skim profits of the market prssaassiaam— EXPORTERS STRATEGIES UNDER , VARYING CURRENCY CONDITIONS i; “There are two conditions in which the exporter had to Make strateg, 3 4. When domestic currency is neat stic currency is ng. : weak the following strategies are considered : \ * Stress price benefits ' + Expand product line and add more costly features '* Shift sourcing manufacturing to iar + Exploit export opportunities in all mar j * Use a full-costing approach, but employ marginal-cost pricing ty penetrate new or competitive markets ee ition : ice in comparison with ‘+ Speed repatriation of foreign-earned income and collections + Competition pricing : Setting a price in comp: ‘+ Minimize expenditures in local or host country currency ‘competitors. ‘+ Buy needed services (advertising, insurance, transportation, etc in domestic market foreign customer in their own currency 2 ,fhen domestic currency is strong : When domestic currency 's strong the following strategies are considered : * Engage in non-price competition by improving quality, delivery and after-sale service Improve productivity and engage in vigorous cost reduction Shift sourcing and manufacturing overseas ive priority to exports to countries with relatively strong currencies ere) PRICING, are ae PRICING. Trim profit margins and use marginal-cost pricing BUNDLE : vc Keep the foreign-earned income in host country; ‘slow down Estes en collections 2 Maximize expenditures in local or host country currency * Buy needed serivces abroad ‘and pay for them in local currencies + Bill foreign customers in the domestic currency _ PRICING STRATEGIES / METHODS: Pricing is one of the most important elements of the marketing imix, as itis the only mix, which generates a tumover for the organisation NS Soto) Rats Tented ui oot #-Qptional pricing : The or spain sohvea Pi spar” (MCOM? International aiferent products Within jn ~ ‘product range at different price’ point: An example wou jg thy Sasa! Watittactst ome rng sere’ de tecorder, 8s 3 ‘differnt prices. LID eh oot Ne groster the atures andthe beri ‘obta, fsatet thie consumer willsaye This forms of price disci assists the company in maximizing turnover‘and ' profit + Bundle Pricing : The orguisation bundles @ 9rOUPS Of prog, 1 a reduced price. mania a c + Premium pricing : The prigs Sets high lo reflect exctusiveng ofthe product. An exampie of producis using this'strategy wor’ be Harrods first:class airline, serivees, Porsche, etc. Mark, side ype Maximize market share) (@), Determining demand (price se price elasticity of demand) » (Estimating, costs (types, of cost ‘accumulated production; ditferer costing). - () Analysing competitors costs, priées and offers. (©) Selecting a pricing method (the customer's demand schedule, the (uy Sh tuneton, and competiors prices) Selecti inal pri ial pric pacar ate final pric (psychological pricing sya soit Zaper (MCOM- Ineration! Markaing 5, international Price Quotation What do you understand by Internati at What are those factors which are stat iscuss the kinds of International Pri oR Explain the effect of International OR. ne information required in prepa their usual contents? intermational prices 7 pnswer ¢ In export marketing, in addition to t frduntoading of goods, ‘Aquestion often arises who should p: tr seller. the exporter or the buyer ic. t WHAT IS AN EXPORT PRI ler. Price quotations are also known Definition the product as well as specifies delivery hat the between profit or loss for the exporter. 1. Importer's det: previous coi 2. Product detai size weight and qu: 3. Packaging and packing detai should be jondence and ne: lace of delivery of the goods. What do you mean by expott price ox What precautions should be tak ependiture has also to be incurred on transportatio itdepends on their termis of agreement ie. pr Contents of Quotations : Following are the usual con! Importer's name, address,reference of ‘ed, special packing requirement | ‘onal Price Quotation? tedin it? Discuss. ice Quotation, Price quotation and state ring its, Quotations ? What are ‘en when quoting INTERNATIONAL PRICE. QUOTATIONS the cost of production, a i . insurance, loading ay for these expenses, whether the importer. The answer is that quotations, QUOTATION ‘The export price quotation defines the product, the terms of delivery forthe export of goods and the rights and obligations of the exporter and the as ‘terms of delivery’, ‘Sak Onkvisit & John J: Shaw have defined price quotations as "a quotation describes a specific product, states the price for location and sets the time for price quotation should be stated in dear and unambiguous terms as any confusion can make a difference ts of quotations: sgotiations, if any. ld clearly state as 10 ‘not and what will be the » (COM - International jy, Ps fed Paper” (COM = NTeTnaNonal Mary, BA Sete lich carenoy fe pavTENT wee bi Nembecatt aymentagainsi documents, INTOUGH lottg, oe Ty Goived Paper""(MCOM - International Ma Te eee e enw ae enational Marketing) eariations in rate of foreign exchange if thare isa chang, 83 : (are iS a change ir “ate of exchange of Indian rupee vis a vis a change in foreign currency, the 1h || be a gainer if the rupee is devalued it lc artation of exporter wil led and a losser,it the mode of ransp Goods ‘ , eS “eh tee pward-tevaluaton, an exporter for exe vy rout ec yw many days fi in ca’ " xample, will get 7. Dalvery time: A mates 8 from ng | a rupees in exchange for a. US dollars, if the price is received in the order the delve 0 8. Vaty of quotation For how muh period, 2. 098 man Hause the exchange rates keep on chaning, ao @ sofeguard ea SS syettiicalion of the person maki ers should incorporate a clause in the price quotation that “the 9. Exporter's detal je ena ‘ing f eR2E4 prices are based on the present rate of exchange, if there is any quotation ie. his name and : er call be on buyer's account. PRECAUTIONS TO BE TAKEN WHEN QUOTING INTERNATIONAL PRICES, (IMPACT OF DIFFERENT COST FACTORS,ON EXPORT PRIcing| Price quotation is a kind of contract between the exporter ang, importer which describes, its various terms. Ifthere Is any breagy fo performance of the contract the importer can file a suit for damages. Itis, therefore, necess, thatthe exporter should be cautious when quoting prices and decid terms and conditions. Exporters should be particularly cautious about, following matters : change other alternative is to quote prices in indian rupees. In such gee there will:be No adverse effect due to change in rates of e. Co tost of packaging : Mostly importers specify the kind and the standard ‘of packaging they want. The prices will be quoted in bearing inmind the costs involved in packing the goods in desired manner c/irthe buyer does not lay down the standard of the packing, itis the jay of the. exporter to pack the goods in a manner that they are not nae Be ace during transit. SS; When the goods transported by sea, they are subjected to different +. Cost Ascalation : Generally, there is big time gap_ between a}. weather conditions and handling methods, the packing should be capable ‘ime when the order for export of goods is recelved and the uff withstanding these perils, the cost of which can be substantial wien the goods are despatched , it ma 5, Providing Guarantees and warranties : Usually, in case of Wis possible that the cost of machinerless and appliances, sellers include the cost of provi insurance premium etc. may inert y Tun into a few ‘months production, sea or air freight e during this period and yf .-yon guarantees about working of the goods for a spe exporters may suffer a loss in supplying the goods at the ‘stated piel nn, they, sa ats, exporter may mention the validly period of the quotas] guarantees, its cost should be added when arriving at the quoted SY, Bay, ate hat he quotation lle valid ora spect petoged os .,Bh0®. ‘Supply of spare parts : In the case of export of plant and machinery, some spare parts are sent free of cost with each machine and sheir cost is included in the price of the machine. ‘sos p,Sometimes the importer may want guarantee about continued ‘Supply of spare parts for some period. If any kind of guarantee is to be en then its cost should also to taken into consideration when quoting ihe price. : “bead, Penalties + International price quotation may also contain a “Penalty clause that if the exporter fails to fulfil the export obligations, he willbe lable to pay damages to the importer. ‘The amount of penalty is, generally, in the nature of some percentage {the total price of the exported goods. It is in the interest of exporte bat the maximum amount of the penalty is fixed beforehand so that he it his liability and may not be put to extraordinary loss. clause can be inserted in thé contract that the nately increased if th material or labour. 2. Change in quality specication Som the quality requirements of goats een ne bee iene in the contract that alo to change in quality standards. SPR en aia coms tan, ———— oo | \ nikita Solved Paper” (NCOM- INETANON A! Maries, owed Paper” (MCOM - International ita aaa prOSGSE The eee eating) 85 gumbersome process : The process of making adware 40. Payment Terms & Methods of Paymeys Arational payment in quite cumbersome, "9 #8 FSeeiving 7 mi Causes or Need or Necessity of national Payment 2 yy International Payments 4: What s the meaning Ot ee? Explain, "a , soveralintemational ener’ and monetary transact international Pay - “more ; nelary transactions the methods o neds'adopted for xe piace among the rations and are recorded inthe sete OR Explain the different nei rae ae rege akin tte Pesments ofa county. Al those toc, International payments, which method can Be regard, the best ? ‘+ . 'S and accounts ‘of receiving and making Etemations Payments, are the i a the important causes of international ame of Payments are OR What do you mean by payment terms in internatig,, Seied below — ; . markeing ?What are their characteristics 7 ester cacions in merchandise goods oriteratonal wags sAreewer : " groups - The largest number of transactions atise from the PaymentTerms and Methods of Payment fovement of merchandise goods or ntematonal se eer i The export and import of merchandise g MEANING OF INTERNATIONAL PAYMENT = joods make huge transactions of international payment. When person from one country makes payment 10 @ person 2, transactions in Services ~ International trade in services like ‘another country, itis called international payment. banking, shipping and other transportation services, insurance, For example, Mr. X of India has exported goods to Mr.Y of Ethiog) _gommunigations, travel and tourism ete pts and Mir. pays for the imported goods to Mr. X in US dollars; itis a case international payment. cause the re ‘and payments internationally. All parties providing these services receive the payments and the parties taking these services have to make international payments. 3, Remittances by Non-Resident immigrants — The non-resident Indians (NRIs) residing abroad, they remitt thousand crores of rupees to their relatives in India and after returning home they accompany with huge foreign assets with them earnet countries. No doubt, the currency of Ethiopia is Birr and that of India is Ru ‘but international payments are, generally, made in commonly accepiat Currency like US dollar or Euro, CHARACTERISTICS OF INTERNATIONAL PAYMENTS, Following are the characteristics of international payments : (1) Transaction between Persons of two countries : Internation Payments are made when payment has to be made by an impor of one country to the exporter of another country. (2) Two parties i.e. expor other 4-Capital Transactions — In capital account also there are number __ oftransactions. These capital transactions are also of two types— rter and importer : Short-term - Short term investment in securities by the voceie to Parties are involved, one is the exporter who ist}, Fesidents of different countres. "eke porentonthe oars be goa wie wma] enesem art xn, roe the payment. ‘bonds and other securities investment in real estate like land an (3) Payment in a forei is mad lings etc. 150 5. External Debts — If loans are made internationally it sreate problems of international payments both form creditor country as well as debitor country at the time of payment of de and the time of repayment. Z © External Aid, Assistance & Grants - There are several international agencies, organisations and counties which provise Several types of ald assistance & grant for various purpos Due to these transaction also the problems of payment arise, 7. Payment of Returns - The parties who in different forms internationally will get their return of investment in ditferer like profit, (4) Lading, (8) Throug! various through Airway Bill, Commercial Invoice, Insurance Policy el Ih various methods : The payment can be made throu! methods like, advance payment, payment on accou foreign bill of exchange, letter of credit ete depend upon the agreement between the exporter and the importer, ivita Solved Pape (MOOM ELENA Mar 3 wg eee Hany umes @ COUniTy” vod Paper” (MCOM - International Mark Plaats ences men eeenneetng) BT ety jorratonal Wade, the payment for Goods en'be made'by any at EBayinent of Comp TAT Compensation for Meeting Ege tnods ‘These payment methods are also know as payrreot : he, 1 ike wart Compenc’ te lol stain payments in t eons like W: pene ty 0 ‘ fosses ocured due t0 San i ton Pag ‘gable transfer or Telegraphic transfer : I the so at Royalties —ninlernational transactions, th, i 9, Pay ere a T peodvers which have been registered under yj several 0 nt. The parties whg wu provisions of trademarks ant con Wan {gure hem nave 0 pay TE or malntairing po, A pins nisin aM relations with other countrigg ‘Sounty est sishes several offices in other countries in the abl i TANG ot tigh commissions, embassies and trade consultay® ‘Accountry has to make huge expenditure on maintaining in thes, diplomatic missions. 41. Expenses on Foreign Delegations - In today’s world Scenari, therer are a number of international bodies like UNO, World Bang IWF, WTO, UNCTAD, ADB and many more others. For taki benefits of these bodies, a country seeks the membership any attends their meetings by sending its delegations. 42. Payment on Tourism — Tourism in the world has become an| industry. On this account, there are huge transactions r exporter has to be rid immediately, the importer makes the payment through Pi graphic transfer. The improter pays in the banks of his country _porelegii's of his country's currency. The bank inform too ‘concerned one in the foreign country through telegram and instructs to make * pant iment of a certain amount toa certain person 2 pPMie to non-availability of specimen signatures of the customer, 280 ssiblity of payment to.a wrong person. To combat this problem (50 personal codes. ite ks include cost of telegraph in the transfer price. But through, ae jum, payment can be made within minimum possible time.The gets the payment at the same day at which it is made and that a ‘question of gain or less of tail transfer: Thisis also an instrument of international payments. 72 this the concerned bank informs the other bank in foreign country secthrough in»place of telegram. In comparsion to telegraphic transfer, this instrument takes more time, hs the duration between making the payment and receiving the ‘ment is long an during this period the money is with the bank. The JeXcompensates the customer for the loss of the interest for this ad \tearly payment is not required, in that case MT(Mail Transfer) is re appropriate option. l From the point of view of payment MT is like a cheque but itis not rslerable. MT can be sent through air or road. :Generally MT is sent through air mail. 4. Bill of Exchange : It is a document which instructs the drawee to uimake payment. immediately or at a future agreed date. When xn immediate paymentis required on the presentation, On the other hand, when future date, itis called usance bi ; ©

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