Solutions to Assignments
IBO-02 International Marketing Management
Solutions to Question No. 3
a) International Sales People
An international sales representative is a person who sells goods or services to clients outside of his own country.
A salesman is an ambassador of his company to the external world. He leaves a lasting impression on those with whom he interacts and form an opinion about the company from his behaviour. By no stretch of imagination, we can consider the production staff or, for that matter any other staff of the organisation wielding the same influence as the salesman does.
A salesman is out in the field, with no direct or little direct supervision, whereas other employees have to work under close supervision. A salesman needs human relations skill much more than others. As he interacts with a variety of people in diverse situations, he must show diplomatic skills and composure. Field duties involve hard physical labor, and are never a bed of roses. Besides, selling demands creativity, doggedness and initiative. Thus, a successful salesman should have a combination of brain and brawn. As he is to be self-directed, he needs strong motivation.
A salesman needs human relations skill much more than others. As he interacts with a variety of people in diverse situations, he must show diplomatic skills and composure. He should show tact and intelligence while dealing with his customers.
A salesman is authorized to spend company’s money for his lodging, boarding, travelling and entertainment. Very few in the company are so authorized to use the company’s funds.He should show tact and intelligence while dealing with his customers. A salesman is authorized to spend company’s money for his lodging, boarding, travelling and entertainment. A salesman cannot enjoy family life like people in other walks of life do. He has to travel his territory while servicing it.
A salesman cannot enjoy family life like people in other walks of life do. He has to travel his territory while servicing it. Besides, selling is a high pressure job. All this makes him prone to stress. Thus, a salesman has to brave all kinds of adverse situations, while being away from home. It is, thus, a very tough job.
A salesperson is an individual whose fundamental job is to sell a product/service. They are people who are predominantly engaged in personal selling activities on behalf of the company with a view to generate business connections that culminate the salespeople in delivering the product or service to the customers.
This is the description of salespeople that was portrayed in traditional selling. However, in modern selling, a salesperson’s role extends much over than just delivering the product to the customers. Today, the bigger role of a salesperson lies in the post-selling period.
The job of the salesperson apparently sounds simple in ideation but intricate in execution. Selling is an all-important task of an organization. It is the wheel of the organization that gives mobility to it. It determines the success or failure of the organization. It guides and controls the performance of the organization. Salespeople are the drivers of the ‘organization’ wagon.
Salespeople are the human factors in selling that stimulates prospective customers to be the real customers and the present customers to stay with the firm and opt for higher rate of consumption. Salespeople also act at the operational ambit of the organization. Success in sales plans, policies, strategies rely heavily on the personalized selling demonstrated by salespeople. A salesperson can work on behalf of a manufacturer, wholesaler, distributor, retailer, institution, franchisee, etc.
In the traditional selling format, salespeople held a ‘pushy’ image. They used to coax and cajole innocent customers into buying their products. Even for narrow interests, salespeople did not hesitate to cross ethical lines of business and dupe naive customers by swallowing over-priced products or inferior-quality products. Tall talk and lofty claims were often used as means to persuade customers to lean towards their products. Often, these salespeople were talkative and deceptive. They persistently used to flatter less or non-informative customers to join hands by pressure tactics.
(b) Export agency agreement
The export contract is used for the international sale of certain products (industrial supplies, raw materials, manufactured goods), which are projected for resale, where the buyer is a trader, importer, distributor or wholesaler that will sell the products to another company or merchant. Though it is common practice to export products based a proforma invoice or quotation received from exporters, it is a safe practice to use written and legal export contracts. Some of the essential elements of an export contract are:
- Products, standards and specifications.
- Units of measure in both figures and words.
- Total value. The total contract value in words and figures, and in a specific currency.
- Terms of delivery. Delivery terms, based on the Incoterms.
- Terms of payment. Amount, mode and currency.
- Documentary requirements. Documents needed for international trade transactions.
- Delay in delivery. Damages due to the importer from the exporter in the event of late delivery owing to reasons other that force majeure.
- A contract should provide for the insurance of goods against loss, damage or destruction during transportation.
- Force majeure. Provisions in the contract defining circumstances that would relieve partners of their liability for non-performance of the contract.
- Applicable law. The law of the country that is to govern the contract.
- Arbitration clause to facilitate amicable and quick settlement of disputes or differences that may arise between the parties.
(c) Data sources
Marketing information and research are powerful tools to improve your understanding of your customers, competitors, and the industry and market in which you work. In today’s information-rich world, many great sources of marketing data are already available. Knowing what they are and how to find them is a great skill for any marketer.
The data sources recommended below are a representative sampling, rather than a complete list.
It is also worth noting that the marketing information landscape is continually changing. Marketers would be well served to continually scan for new developments and information sources that may be beneficial to improve their understanding of customers and ways of serving them.
- Publicly Available Data Sources
Government agencies, non-profit organizations, and non-governmental organizations often publish freely available data that may inform marketers’ understanding of consumers, customers, the geographies, and industry sectors where they operate.
- Syndicated Marketing Research Data
A number of commercial companies provide syndicated marketing research that is well respected and often well used by organisations that subscribe to their services.
- Other Useful Sources for Marketing Data
These additional sources for other types of marketing information are also warrant attention. Whether or not marketers use them, they should be aware of these tools and how they can be useful for a variety of marketing purposes.
(d) Transfer Pricing
Transfer prices are those charged for intracompany movement of goods and services. Firms need to make transfer-pricing decisions when goods are transferred from the headquarters to the subsidiaries in another countries. This transfer prices are important because goods transferred from country to country must have a value for cross-border taxation purposes. There are three basic approaches to transfer pricing:
- Transfer at cost. The transfer price is set at the level of the production cost and the international division is credited with the entire profit that the firm makes. This means that the production center is evaluated on efficiency parameters rather than profitability.
- Transfer at arm´s length. Here the international division is charged the same as any buyer outside the firm. Problems occur if the overseas division is allowed to buy elsewhere when the price is uncompetitive or the product quality is inferior, and further problems arise if there are no external buyers, making it difficult to establish a relevant price. Nevertheless, this approach has now been accepted worldwide as the preferred (not required) standard by which transfer prices should be set.
- Transfer at cost plus. This is the usual compromise, where profits are split between the headquarters and the subsidiaries. The formula used for assessing the transfer price can vary, but usually it is this method that has the greatest chance of minimizing time spent on transfer-price disagreements, optimizing corporate profits and motivating the headquarters and subsidiaries.
The best solution also depends on the tax rates in the countries of the headquarters and subsidiaries.
