Chapter 16, international sales & distribution management. After studying this chapter you will be able: Understand differences with domestic markets; choosing the markets; economic, legal & cultural aspects of the environment; risks involved in international business; entry strategies for international markets; | Chapter 16 International Sales & Distribution Management SDM-Ch 16 LEARNING OBJECTIVES Understand differences with domestic markets Choosing the markets Economic, Legal & Cultural aspects of the environment Risks involved in International business Entry strategies for international markets Pricing, financial terms and payment methods Information gathering about target markets Differences in distribution channels and factors influencing the choice SDM-Ch 16 WHY GO INTERNATIONAL? The WTO agreement has resulted in opening up of new areas for freer trade (Textiles, Services & Agricultural products) China, Russia, India & the East European countries have embraced free market policies resulting in huge opening up of underserved populations. Domestic competition has increased especially from imports. Outsourcing in manufacturing and services has increased due to cost pressures & improvement in infrastructure. SDM-Ch 16 CHOOSING THE MARKET Factors to be borne in mind while . | Chapter 16 International Sales & Distribution Management SDM-Ch 16 LEARNING OBJECTIVES Understand differences with domestic markets Choosing the markets Economic, Legal & Cultural aspects of the environment Risks involved in International business Entry strategies for international markets Pricing, financial terms and payment methods Information gathering about target markets Differences in distribution channels and factors influencing the choice SDM-Ch 16 WHY GO INTERNATIONAL? The WTO agreement has resulted in opening up of new areas for freer trade (Textiles, Services & Agricultural products) China, Russia, India & the East European countries have embraced free market policies resulting in huge opening up of underserved populations. Domestic competition has increased especially from imports. Outsourcing in manufacturing and services has increased due to cost pressures & improvement in infrastructure. SDM-Ch 16 CHOOSING THE MARKET Factors to be borne in mind while choosing markets: Size of the market Language & Culture of the market Competition in the market Proximity of the market Political and Financial stability of the country Ease of doing business SDM-Ch 16 CULTURE & INTERNATIONAL BUSINESS Culture influences everything from taste & preferences to consumption patterns and attitude to foreigners. Culture influences communication modes Culture influences dress and behavior Culture influences usage of a product Language is very important in international business to communicate effectively. SDM-Ch 16 LEGAL ASPECTS OF INTERNATIONAL BUSINESS Laws vary from country to country – there is no “international law” Important to know the local laws to do business – on investment, management, employment, marketing, pricing, royalties, profit repatriation, taxation etc Developed countries have stringent laws on safety, pollution, intellectual property rights etc. In times of disputes, which law will prevail – this needs to be spelt out in contracts .
