business 18-20

Fare

price paid for airline transportation.

Competitive Pricing

Comparable price Ex: Gas.

Skim Pricing

High introductory price-covers R&D.

Odd-Even Pricing

Odd creates image of a bargain; Even creates image of quality.

Trade Discounts

Sell at discount percentage to distributors/stores.

Countertrade

direct exchange of products or services between companies in different countries.

Dumping

selling exported products at a lower price than what is asked in the company’s home country.

Distribution Channel

path taken by a good or service to get from the producer to the final user.

Direct Distribution Channel

Producers sell goods or services directly to the final user (online).

Indirect Distribution Channel

goods or services are sold with the use of one or more intermediaries (Uses agents, wholesalers, retailers).

Intermediary

any person or organization in the distribution channel that specializes in moving goods and services from the producer to the consumer.

Most Common Intermediaries

Agent, Wholesaler, Retailer, Broker.

Export Management Company (EMC)

provides distribution services for businesses wanting to sell in foreign markets.

Export Trading Company (ETC)

full-service global distribution intermediary (most exporting assistance).

Freight Forwarder

Ships goods to customers in other countries (Travel agent for cargo).

Customs Broker

Intermediary specializing in moving goods through the customs process.

Bill of Lading

Contract between exporters and transporter.

Certificate of Origin

Documents the country in which the goods being shipped were produced.

Export Declaration

Required by U.S. Dept of Commerce for shipments valued over $500. Includes name of carrier and exporting vessel.

Destination Control Statement

Verifies the country to which goods are being shipped.

Insurance Certificate

Amount of insurance coverage for fire, theft, water or other damage during shipment. Lists insurance company and exporter.

Physical Distribution

process of transporting, storing, and handling goods in transit between producer and consumer.

Motor Carrier

Trucking-in all countries-quick delivery anywhere.

NAFTA

difficulties transporting between Canada, Mexico and U.S.

Railroad

(Autos, grain, chemical, coal, lumber & Steel).

Waterway

Slower but cost effective (coal, steel, lumber, grain, oil).

Containerization

Process of Packing cargo in large standardized containers for efficient shipping & handling.

Pipeline

Dependable/low-cost (Natural gas and oil -liquid products).

Air Carrier

Quick -Specialty Product/Perishables.

Intermodal Movements

Transfer of freight involving various modes of transportation.

Piggyback

Ship by railroad, then load onto trucks for door-to-door delivery.

Promotional Mix

combination used by an organization of advertising, personal selling, publicity, and sales promotion.

Medium

Messages travel over a medium - television, telephone, magazine, salesperson.

Decoding

process in which the audience makes meaning of the message.

Noise

anything that interferes with the communication process-Language, culture, etc.

Feedback

From audience back to sender.

Advertising

Any paid, nonpersonal sales communication = mass selling.

Personal Selling

direct communication between sellers and potential customers.

Publicity

Any unpaid promotion.

Sales Promotion

All promotional activities other than advertising, personal selling & publicity. Coupons, contests, samples, displays.

Standardized Advertising

use of one promotional approach in all geographic regions (Ex: Kellogg’s Tony the Tiger).

Localized Advertising

Customized for various target markets. (Ex: Yogurt-it is sold for breakfast, lunch, snack). Most multinational companies use advertising agencies.

Product Quality Ads

presents quality, brand, price or features of a product.

Comparative Ads

Contrast features.

Emotional Ads

Appeal to feelings/needs.

Humorous Ads

Comedy.

Lifestyle Ads

where people can relate.

Endorsement Ads

Testimonial.

Research Department

studies target market and measures effectiveness.

Creative Department

Develops the message & features to deliver it.

Media Department

Decides where and when advertising will be presented.

Account Services

Link between agency and client.

Expatriates

employees living and working outside their home nations.

Local Nationals

Employees in their home country-most familiar with culture.

Third-Country Nationals

Citizens of one country employed by a company from another country who work in a third country.

Money Markets

Where short-term investments (less than one year) are bought and sold.

Capital Markets

Where companies obtain funds for long-term use. Often buying and selling stocks & bonds.

Equity Capital

funds provided by company’s owners; Profits reinvested in business, stock offerings, investments from owners.

Debt Capital

Funds from borrowing; Bank Loans-widest range of financial services, Bond, Mortgages.

Deposit

Type Financial Institutions; Commercial Bank-(letters of credit); Savings and Loan Associations; Credit Unions-nonprofit-serve needs of members.

Commercial Bank

Business organized to accept deposits and to make loans.

Savings and Loan Associations

Initially specialized in savings accounts & home mortgages. Broader services today.

Credit Unions

Cooperative owned by members and operated for their benefit.

Mutual Funds

Investment company that manages a pool of funds from many investors.

Life Insurance Company

Insurance companies invest the money & lend the funds to large corporations to invest in commercial real estate.

Central Bank

State-owned agencies that provide governments with financial services (Primary role).

Development Bank

Organization of several countries created to provide financing for economic development to countries in a region.