International Marketing Channels

International Marketing© Thomson/South-Western

ChapterChapterChapterChapter

International Marketing Channels

8.02 Exporting and Logistics8.02 Exporting and Logistics

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International Business© Thomson/South-Western

Warmup--Logistics

Connect to each of these videos (in order) to use as a warm-up (approx. 20 min.):

http://www.youtube.com/watch?v=qDbnx6nLrQo&feature=related

http://www.youtube.com/watch?v=Wlrf32iU9pc&feature=relmfu

Chapter 8Slide 2


Chapter 8Slide 3

Lesson 8.2

Exporting and Logistics

Goals Explain what is involved in the

exporting process. Discuss the importance of having an

efficient logistical system.


Chapter 8Slide 4

Terms exporting importing indirect exporting direct exporting customs customs broker intermodal transport


Chapter 8Slide 5

EXPORTING

Exporting The process of shipping a product to

another part of the world for trade or sale Includes:

Identification of customers Preparing products for shipment Arranging documentation Clearing customs Planning shipping/delivery of products


Chapter 8Slide 6

EXPORTING (continued)

Indirect exporting For a company not fully committed to

international marketing Uses a broker or agent to help find

customers and export products Extra middle-men can increase total cost


Chapter 8Slide 7

EXPORTING (continued)

Direct exporting For a company fully committed to foreign

markets a company actively controls finding markets and

exporting products

Importing receiving products exported from another

country


Chapter 8Slide 8

Export trading company Buy and sell products Conduct market research Overseas distribution Provide funding and financing Coordinate shippers, suppliers, and manufacturers

International freight forwarder Travel agent for cargo Ships products directly to foreign customers

Intermediaries that assist in exporting:


Chapter 8Slide 9

Documentation for clearing customs Customs

immigration control for products entering the country

Inspect shipments to insure proper documentation

Collect customs fees Insure restricted products do not enter

E.g., dangerous items, embargoed products, fake products, endangered species products


Chapter 8Slide 10

Documentation for clearing customs (cont.) Customs broker

An intermediary that specializes in moving products through customs

Licensed by U.S. Department of Treasury May also work with Dept. of Agriculture,

Environmental Protection Agency, or Food & Drug Administration


Chapter 8Slide 11

Documentation requirements

Bill of lading Issued by carrier (transporter) to shipper

(exporter) acknowledging receipt of goods Describes type and quantity of goods Describes how goods will be shipped Identifies destination http://www.youtube.com/watch?v=nmosREOfkXw Bill of lading video


Chapter 8Slide 12

Documentation requirements

Certificate of origin Document that identifies the country in

which exported goods are obtained, produced, or processed

Helps determine import duties or whether the products may be legally imported, depending on country of origin


Chapter 8Slide 13

Foreign Trade Zone

Foreign Trade Zone (FTZ) an area designated by a country as a

specialized zone where products may be exempt from duties

Products in FTZ’s may be stored, modified, displayed without paying duties

Products exported out of FTZ’s no import duties are paid where the FTZ is located

http://www.youtube.com/watch?v=uFxTKV7_LLM http://www.youtube.com/watch?v=w2rmuKHlU3A Foreign trade zone videos and china


Chapter 8Slide 14

INTERNATIONAL LOGISTICS

Logistics involve the transportation and storage of products between producer and consumer

Modern technology makes logistics easier than in the past: GPS allows ships to avoid bad weather Easy to track individual shipments


Chapter 8Slide 15

Logistics and the Total Cost Concept Transportation costs are a major portion of

total exporting costs Other cost factors to consider:

Products shipped by water or land arrive with less certainty than by air Greater chances for spoilage, loss, or obsolescence Warehousing and insurance costs may be higher Air freight enhances security, limits shipping time,

assures faster delivery


Chapter 8Slide 16

Logistics and the Total Cost Concept Other costs factors to consider (cont.):

Free on board (FOB)—determines where the shipper pays the transportation costs FOB destination—seller pays shipping costs to

the buyer’s delivery point FOB Origin—buyer pays shipping costs from

the seller’s departure point May include cost, insurance, and freight (CIF)


Chapter 8Slide 17

Transportation Modes

Water transportation Within a continent—utilize rivers and lakes Cargo containers used for overseas

shipping Good for bulk items such as grain or

minerals Half of all U.S. imports arrive via cargo

container—over 9 million containers yearly


Chapter 8Slide 18


Air cargo Containerized jumbo jets can carry over 90

tons Costs are higher than other transportation Fast delivery avoids need for warehousing Less opportunity for theft


Chapter 8Slide 19


Land transportation Two main modes: rail and truck Rail typically used for bulk products Usually require land connections to air or ferry Long-distance land shipments increase

chance of loss, damage, delivery uncertainty


Chapter 8Slide 20


Pipelines Primarily for energy-related products (oil

and natural gas) Coal can also be put into a liquid mixture

(slurry) and shipped through pilelines


Chapter 8Slide 21

Intermodal Transport

Intermodal transport involves a combination of transportation modes. Fishyback

Containerized shipping between trucks & ships

Piggyback Shipping between truck and rail

Birdyback Shipping between truck and air cargo

Documents

International Marketing Channels