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UCLA Internationl Marketing 5 20-09
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UCLA Internationl Marketing 5 20-09

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Transcript

  • 1. International Marketing Global Trading
  • 2. What is Non-Cash Trading?
    • Defined as companies trading goods and services without the use of currency or cash
      • This market is segmented:
        • Barter - Small businesses with average trade of $450 – non-geographic or local items- printing, oil change, dentist, restaurant
        • Large Corporate Trade – Includes F1000 and G2000, with average trade of $1-20 million- global commodities- coal, computers, steel, equipment- even diapers and alcohol
  • 3. The Market
    • $1.2 trillion of global commerce is traded on a non-cash basis (U.S. Department of Commerce and World Trade Organization)
    • Worlwide totals exceed $7 Trillion
    • Types of Trades
    • Company-to-Company
    • Company to Country
    • Country-to-Country
  • 4. Examples of Large Corporate Non-Cash Trades
    • IBM traded $40 million of goods and services in return for Olympic sponsorship
    • CBS traded $62 million of advertising for an equity position in Sportsline.com
    • IBM Mexico traded 2,600 computers valued at $1.7 million for 120 Volkswagens and other services
    • Sumitomo trades $1.2 billion of goods and services with 40,000 other businesses
    • Caterpillar trades heavy equipment for raw materials
  • 5. Facilitation vs. Finalization “ In today's B2B environment, buyers and sellers meet online, but frequently go offline to complete the transaction.” eONE Global: Payments DNA White Paper 80% of the Process 20% of the Value Aggregation Value Exchange Cycle Final payment, settlement & collection occurs offline EXIT Communication Negotiation Transaction 20% of the Process 80% of the Value Payment Settlement Collection
  • 6. Reasons companies trade instead of using cash In countries with weak or fluctuating currencies – trade may be the best way to acquire needed goods and services ALL Conserve cash ALL New distribution channel Airlines, Hotels, Broadband, Media, Energy, Services Sell irrecoverable/perishable inventory Manufacturing, Warehousing Fill idle capacity Manufacturing/Finished Goods Move unsold inventory INDUSTRIES REASON
  • 7. Which Type of Companies Trade?
    • Industries that have a history of non-cash trading include, among others, airlines, hotels, media, real estate, broadband, manufacturing
    • 65 percent of the Fortune 500 participate in non-cash trade
  • 8. Anatomy of a Simple Trade Tracking & Reporting Tracking & Reporting Sales Procurement Sales Procurement CFO IBM $40 Million of Computers CFO Olympics $40 Million of Sponsorship Ads Phone Fax Email
  • 9. Which distribution channel would you choose?
    • Institute of Management & Administration (IOMA) recently found that “removing excess, obsolete and slow-moving inventory” is the #1 most challenging task by a 2:1 margin
    • Current economic data suggest building inventories
    Retail $10MM of computers (100% of current value) Wholesale $5MM (50% of value) International $2MM (20% of value) Liquidation $1MM (10% of value) Trade for $10MM of Volkswagens (100% of current value) OR Trading offers an alternative distribution channel at higher value and conserves cash
  • 10. Types of Corporate Trade
    • Locate a trading partner
    • Agree on mutual need
    • Agree on equal value
    • Consummate trade
    • Track trade
    • Report trade
    The Process 1 to 1 $5MM computers for energy Direct Trade
  • 11. Types of Corporate Trade
    • Locate multiple trading partners
    • Agree on mutual need for each trade
    • Agree on equal value for each trade
    • Consummate each trade
    • Track each trade
    • Report each trade
    The Process 1 to Many $20MM computers for Multiple Items Multiple-Direct Trades
  • 12. Types of Corporate Trade
    • Locate initial trading partner
    • Agree on mutual need
    • Agree on equal value
    • Consummate trade
    • Take possession of excess goods
    • Track initial trade
    • Report initial trade
    • Find partners to trade off excess goods
    * Energy company is faced with Multi-Direct Trading situations (with goods/services that he did not produce, but now owns) The Process Multi-Party Trade Energy Company only needs $10MM of computers- thus take $30MM of product and trades for other goods
  • 13. Value Proposition
    • E fficiency+ L iquidity+ T rust = V ALUE
    • Efficiency ~ Quicker opportunity to move goods or services. Move large quantities at once.
    • Liquidity ~ Provides access to multiple trading partners and new distribution channels or outlets.
    • Trust ~ Trading among known or trusted partners. Decreases credit risk.
    ELT=V
  • 14. How does trading affect International Marketing?
    • Foreign Relations between Companies and Countries
    • Impact on Taxes and Currencies
    • Multi-lateral trade negotiations
    • Publicity and Public Relations
    • Financial Impact- Revenue/Taxes
    • Other?
  • 15. Technique for Marketing Yourself
    • Identify who or what your goal is. Whom are you trying to sell to or influence
    • Isolate faces. Industries, Companies, People
    • Use for Marketing, Sales, Referrals, Networking, or Job Search
  • 16. “ Tornado Technique”
    • The basis for everything
      • What you do- high level (realize most people don’t care or don’t understand)
      • Who do you do it for (types of industries, companies, etc.)
      • Names of current clients or companies
      • Ask for the order- who are you trying to get to- be specific
  • 17. “ Tornado Technique”
    • Job Search
      • I am interested in International Marketing.
      • In particular I like industries such as-Banking, Financing, Manufacturing, Other?___
      • Think of companies like X, Y, Z. Or companies that work with____
      • Directly, I am looking for introductions to Chief Marketing Officers or people in the marketing department.
      • Do you know anyone in Marketing?
  • 18. Questions?
    • Contact Information
    • [email_address]