Question

1. What has become the primary vehicle for doing business in many foreign countries? Explain and justify your answer.

2. What is complementary marketing?

3. Discuss channel-of-distribution structures and the distinguishing features of the Japanese distribution structure.

4. In an international advertising process, what factors must be considered by an advertiser while selecting a medium?

5. How important is the family in the success of an expatriate manager?

6. What is price escalation? Explain.

7. In the context of negotiation preliminaries, list the seven aspects of the negotiation setting that must be manipulated ahead of time, if possible

Answer 1

I. Business in many countries:

It is understood that a representation in different countries help attain some presence locally around those areas, if not globally, to get a hold of an expansion. Choosing a primary vehicle for doing business has its own set of pros and cos. Although other types of vehicles can be used, being a sole trader has its own benefits as he is the master of his own company. No limited liability will be applicable. The tax will be borne by him alone and this creates a good opportunity to just expand on self terms over the terms of a partnership or LLP. While doing business in many countries is concerned, a small representation at tradeshows/conferences help in the making and uplifting of the business in those countries.

II. Complementary marketing:

There is always a requirement to elicit responses about products that the companies produce from the users and this takes a lot of effort. A mixture of traditional and individual engagement helps driving further marketing. This is complementary marketing. The individual's engagement about the product on social media helps to get a complimentary set of marketing posts from the individual that others would see and follow. There will be masses that see such posts and use the products. This is additional marketing without any effort taken by the company as the individuals help the product to be marketed through the manner of their experience. In this era of social media, sch complimentary marketing posts act as word of mouth.

III. Distribution channel structures:

There particularly 4 types of this:

1. selling directly 2. intermediaries involvement 3. dual distribution 4. reverse channels

Selling directly from producers to end users is the most straight forward channel available where the interaction takes place between producer and user directly. These include online sales, demos, direct talking for a selling.

Selling through Intermediaries is all about involving resellers and distributors to sell a large supply of the product. They work like agents for the producer to sell the product. This would mean some commission involvement for the agent.

When the producer uses more than one channel to sell the product, then that would take the dual distribution perspective. Franchises may be used as a part of dual distribution of the product.

Reverse channels mean recycling of the product and making money. There will be users or beneficiary who will need the product and that will only tend to make a resale with getting some beneficiary in the end.

Japanese distribution structure:

There are 4 key differences in this structure:

1. middle men dominate the  structure with many retails: the product goes through multiple intermediaries before reaching the customer.

2. Extending manufacturer's control through channel by middlemen: as long as the manufacturers provide some rebates, finance inventories, help in promotional mechanisms and accept unsold merchandise back, this control keeps it strong throughout the channel.

3. Philosophy of business and trade customs tied with it: friendship, loyalty, trust play a huge role while making the channel strong. The value system followed supports the relationship between the manufacturer and the channel partners.

4. Laws protecting small retailers as the are the foundation for the development: there are approval rules for large retailer establishments and licensing rules for working that govern the market for a proper functioning.

IV. Factors concerning selection of medium for ads:

1. Objective of ad: Is it to remind, inform, convince, increase profits of the product?

2. Financial position of firm: do they have the time and resource to generate ads, print ads, shoot ads?

3. Reach of the ad to the right set of audience: Will TV ads work, or print media or social media to reach the right audience?

4. Competitors movements: Have their ads worked? How much have they gained or lost after that?

5. Experience fro past: Did the ads previously work? Where is the drawback? How to improve?

6. Message to be used: What messaging would work and not complicate ad comprehension?

V. Expatriate mangers:

As long as managers are not settled with a family, they can afford to take some chance and stay away from from for a few years for work purpose. However, when a spouse and children come in to consideration, then a large part of the decision revolves around the adjustment of the family. It is only highly likely that managers would not accept a foreign project so that his/her family does not get disturbed. However, if the family moves out with the manger, then there will be a huge change in the family adjustment at the new cultural environment. Cost factors will be another deciding element. An establishment of a regular working environment will also be a pressing issue. Hence, a success of the manager will depend a lot on the family's issues.

VI. Price escalation:

This is a term that comes into picture when a product is sold abroad at a higher cost. This higher cost is obtained due to the transportation and carrying charges which adds in the final product selling cost. It may also include the cost of all the distribution channels that it went through. So, the price gets escalated and the selling price of the product sold abroad increases.

VII. Aspects of negotiation setting that can be manipulated:

1. Place/location of negotiation: Travelling will be a disadvantage to both parties. Also, legal jurisdictions should be considered.

2. Arrangements made in the location: A proper set up/ style should be maintained. If the things around the place is distracting, then negotiations may not turn fuitful

3. Number of parties involved: If only relevant parties are present or if additional parties that do not have any significance in the negotiation is involved, may curb the full terms that need to be negotiated.

4. Number of participants involved: If just the main participants from all parties involved are present or if a whole lot of unwanted personnel are involved, there can be uneasiness in the negotiations,

5. Audience if any: If 3rd parties are present, negotiation terms may not be spoken completely, and can cause disruption in the final terms getting set.

6. Channels of communication: The meetings need to take place at via the correct setup channels, like over a small tea meeting or dinner meeting. Parties may cause distractions.

7. Time slots: Over time delay, or too short a duration will take away the importance from the negotiating terms.