Sangvm.s11.c5.Sal301.Sangvm

TRƯỜNG ĐẠI HỌC FPT CẦN THƠ
Session 11:
Chapter 5. International selling

Learning Objectives
1. Understand key economic terms relating to international trade
2. Appreciate the nature of different types of overseas
representational
arrangements
3. Have a working knowledge of many of the world’s trading blocs
4. Evaluate the role of culture in international selling
5. Know how to organise for international selling
6. Appreciate the effects of worldwide sourcing and buying alliances
SangVM.S11.C5.MKT301.SANGVM
Economic aspects
The balance of payments:

 Trade surplus: when the amount exported exceeds the amount imported the
country is said to have a favourable balance of trade.
 Trade deficit: the importation of goods exceeds exports, then the country is said
to have an adverse balance
 Reduce expenditure on imported foreign goods, reduce expenditure overseas
on such items as defence and foreign aid and attempt to discourage its citizens
from travelling overseas to stop money being spent abroad.
 Sell more goods and services overseas to increase foreign revenue. It can
encourage foreign tourists in the country to spend money or it can encourage
foreign investment that will provide income.
International selling at company level
Key factors need to be considered when discussing selling:

1. Objectives: some managers set objectives as ‘getting the right goods to the right
places at the right time for the least cost’.
2. Physical distribution covers a broad range of activities (such as transportation,
warehousing, materials handling and inventory control) that are concerned with
order fulfilling rather than order getting.
3. Several external factors can affect channel decisions. These include:
● customer characteristics;
● the nature of the product or service;
● the nature of demand and fluctuations of demand;
● competition;
● legal regulations;
● local business practices.
International selling at company level
Key factors need to be considered when discussing selling:

4. Several internal decisions can affect channel structure decisions. These include:
(a) The types of intermediaries as well as the processes involved. The latter will relate to:
 Screening and selecting intermediaries;
 Contracting;
 Motivating;
 Controlling;
 Termination.
(b) The coverage of the marketplace.
(c) Length (number of levels).
(d) Control resources.
(e) Degree of integration.
Cultural factors in international selling
Culture is the distinctive way of life of a people that is not biologically

transmitted
Figure 5.1 Prahalad and Doz integration and responsiveness model
Several factors need to be considered as they affect the communications situation:
1. Language
2. Culture: areas to which particular attention must be given in terms of
cultural hot spots include: humour; prestige; romance; music; colours;
visual imagery; verbal.
3. Education
4. Economic development
5. Media infrastructure
6. Government regulation
7. Sleeper effect or dissipation effect: companies must remember that both

positive and negative credibility effects tend to disappear after a period of
time. Several additional barriers to communication can be identified:
8. Selective perception:
 Wandering, zapping, zipping, and channel surfing of the audience;
 Combat with roadblocking – failure to appreciate the differences in the
field of perceptions of the sender and receiver.
9. Psychological noise: combat with repeated exposures, contrast in the copy,
and teasers.
10. A lack of coordination of messages: for example, press release, ads

campaign and changes to product specification or price.
11. Different styles of presentation of corporate identity, brand and
product image.
12. Inconsistencies in the messages conveyed to customers by staff at
different levels and from different countries and cultures.
Salespeople should develop cultural skills:

 Convey respect and communicate verbally and non-verbally a positive attitude and
interest in people and their culture;
 Cope with ambiguity and the frustrations that sometimes occur when faced with an
unfamiliar culture;
 Show empathy by understanding other people’s needs and viewpoints;
 Avoid judging other people according to their own value systems;
 Control the use of self-reference criteria whereby assumptions are made based upon
one’s own culture and values
 Use humour to prevent frustration levels rising when things do not work out as
planned.
Organisation for international selling
 Multinational marketing relates to companies whose business interests,

manufacturing plants and offices are spread throughout the world. Although
their strategic headquarters might be in an original country, multinationals
operate independently at national levels. Multinationals produce and market
goods within the countries they have chosen to develop.
 International marketing covers companies that have made a strategic
decision to enter foreign markets, have made appropriate organisational
changes and marketing mix adaptations.
 Exporting is at the simple end of the scale and the term is applied to
companies that regard exporting as a peripheral activity, whose turnover
from exporting is less than 20 per cent.
Types of intermediary and their selection
Intermediaries can perform

1.Agents several functions:
 Carrying of inventory
2.Distributors
 Demand generation
3.Licensing  Physical distribution
 After-sales service
4.Export houses
 Credit extension to
customers
Distributor
Several guidelines are suggested by Hollensen8 for anticipating and correcting
problems with international distributors (see Figure 5.2):
 Select distributors – do not let them select you.
 Look for distributors capable of developing markets.
 Treat the local distributors as long-term partners.
 Support market entry by committing money, managers, and proven marketing
ideas.
 Make sure distributors provide you with detailed market and financial
performance data.
 Build links among national distributors at the earliest opportunity.
 Maintain control over marketing strategy.
Distributor
Figure 5.2
Helping companies
evaluate foreign
distributors
Direct methods of overseas selling
Direct methods of overseas selling  Production capacity

 Non-tariff restrictions
1. Subsidiary companies  Costs
 Explicit import restrictions
The most common legal structures are:

2. Joint ventures Limited liability company;
Partnership;
Contractual arrangement;
3. Direct selling Limited liability partnership (LLP)
1. Subsidiary companies
 Buyer-specified work
 Continuous supply
2. Joint ventures  Products are technically complex with
a clearly defined market
 Geographical proximity.
 Few customers but large or high-value
3. Direct selling orders
Pricing
 Freight considerations
 Import considerations (Tariffs that might be levied on goods entering
the customer’s country)
 Purchasing alliances
 Transfer pricing (When component parts and finished products are
moved between manufacturing or assembly plants in different
countries as part of the manufacturing or marketing process).
Japan – a study in international selling
Eight recommendations put forward by Bruderev10 for selling to people in
Japanese organisations are as follows:
1. Describe your organisation in detail
2. Manage meetings Japanese style
3. Recognise that decisions are often made by middle management.
4. Do not push for a close
5. Use Japanese whenever possible
6. Make sales presentations low key
7. Establish a strong relationship
8. Dress conservatively
TRƯỜNG ĐẠI HỌC FPT CẦN THƠ
All best for You!

Thanks for
following up!
sangvm@fpt.edu.vn
www.facebook.com/vmsang
0989.000.789

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TRƯỜNG ĐẠI HỌC FPT CẦN THƠ

Chapter 5. International selling

The balance of payments:

Key factors need to be considered when discussing selling:

Key factors need to be considered when discussing selling:

Culture is the distinctive way of life of a people that is not biologically

Figure 5.1 Prahalad and Doz integration and responsiveness model

Several factors need to be considered as they affect the communications situation:

Several factors need to be considered as they affect the communications situation:

7. Sleeper effect or dissipation effect: companies must remember that both

Several factors need to be considered as they affect the communications situation:

10. A lack of coordination of messages: for example, press release, ads

Salespeople should develop cultural skills:

 Multinational marketing relates to companies whose business interests,

Intermediaries can perform

Direct methods of overseas selling  Production capacity

The most common legal structures are:

Direct methods of overseas selling

All best for You!

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