Page 173 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes
3. Prepare an information document request for the Tax Director in order to ensure
you have the data and background required for your analysis. This exercise should
take approximately 30 minutes.

Question:
Analyse the case in your own words.
Source: http://www.cob.sjsu.edu/nellen_a/Case%20Study%201%20Package.pdf

9.7 Summary

This unit attempts to give an overview of the functions in as simple manner as possible.

The export price quotations may not be the same for all markets.
Prices may differ from market to market due to various reasons viz. political influence,
buying capacity, financial and import facilities, total market turnover and other pricing
and non-pricing factors, etc. in order to make the local price of the product competitive.
In some markets prices may be higher in some others they may be cost price or in many
others; they may be less than the cost price.

Dumping is a form of price discrimination. It is the practice of charging different prices for
the same product in similar markets. Each involves charging lower prices abroad than at
home.

The major types of Dumping prevalent today are Over-capacity dumping, Government-
support dumping, Tactical dumping (discriminatory pricing) and Predatory dumping

The different kinds of counter trading are Barter, Counter-purchase, compensation trade
or buy back, and Offset.
In international marketing, different units under the same corporate body but located in
different foreign countries, exchange goods and services among themselves. The pricing
of such exchanges (of goods and services) is known as transfer pricing.

The different types of Transfer pricing are Transfer at cost, Transfer at cost plus overhead
and margin, Transfer at price derived from end market prices and Transfer at “arm’s
length price”.

9.8 Keywords

Advance Payment Mode: An amount paid before it is earned or incurred.
Consignment Sale: Agreeing to sell the goods without first buying those goods from the owner.
Counter-trade: A good-for-goods deal.
Documentary Collection: The Exporter prepares the proper financial and commercial document
including the transport document and hands over to his Banker requesting in clear terms as to
how the documents are to be delivered to the Importer at the other end.

Dumping: Exporting goods at prices lower than the home-market prices.
Grey Marketing: When legitimate goods will enter a market through unauthorized channels.
Open Account System: When an Exporter agrees to sell the commodity on open account system
to the Importer, he despatches the goods to the buyer directly followed by the transport documents
and an invoice requesting payment.

168 LOVELY PROFESSIONAL UNIVERSITY