Globalization refers to the increasing integration of economies around the world through reductions in trade barriers and increases in flow of goods, services, and capital between countries. It leads to more specialization internationally and an increased material wealth. Foreign direct investment contributes directly to international business by allowing companies to invest across borders through mechanisms like mergers and acquisitions or building new facilities in other countries. This increases productivity in the host country and can transfer skills and technology. However, political stability, legal systems, economic conditions, and currency fluctuations in different countries can significantly impact foreign businesses operating there.

1. Define Globalization. How does it contribute to international
business?
Globalization is the process of extending social relations across
world-space. Such extensions arise from the movements of people, things
and ideas. It cannot be defined in terms of internationalization or integration
as some theorists have suggested, though these developments might be
an outcome of globalization. Globalization describes the interplay across
cultures of macro-social forces. These forces include religion, politics, and
economics.
Globalization refers to the increasing unification of the world's economic
order through reduction of such barriers to international trade as tariffs,
export fees, and import quotas.
The goal is to increase material wealth, goods, and services through an
international division of labor by efficiencies catalyzed by international
relations, specialization and competition. It describes the process by which
regional economies, societies, and cultures have become integrated
through communication, transportation, and trade.
The term is most closely associated with the term economic globalization:
the integration of national economies into the international economy
through trade, foreign direct investment, capital flows, migration, the spread
of technology, and military presence.
Globalization seems to be an important tool for businesses to positioning
themselves in borderless trade system. Globalization is the worldwide trend
which economics of every country all over the world become integrated to
another.
Globalization can also descript when businesses are expanding their
operations to new countries or marketplace also. In a global marketplace,
any company from any country can become a competitor to the other.

2. Most of company tend to change themselves from "domestic-only" –
companies that do business only within their own country – into
multinational company or seeking new opportunities to go aboard by
expanding their market, moving their facilities into developing countries, or
diverse themselves to another region.
E.g. having their headquarter in Northern Europe and having their branches
in Europe, North America, or South East Asia.
Trade allows nations to enhance their resources more efficiently, acquire
more goods and services, and to specialize their production. Nations can
gain the most by specializing in the products it can produce the most
efficiently and trade for the products it cannot produce as efficiently.
What is FDI? How does it contribute to international business?
Foreign direct investment (FDI) is a direct investment into production or
business in a country by a company in another country, either by buying a
company in the target country or by expanding operations of an existing
business in that country.
Foreign direct investment is in contrast to portfolio investment which is a
passive investment in the securities of another country such
as stocks and bonds.
Foreign direct investment has many forms. Broadly, foreign direct
investment includes mergers and acquisitions, building new facilities,
reinvesting profits earned from overseas operations and intra company
loans.
In a narrow sense, foreign direct investment refers just to building new
facilities. The numerical FDI figures based on varied definitions are not
easily comparable.
As a part of the national accounts of a country, and in regard to the national
income equation Y=C+I+G+(X-M), I is investment plus foreign investment,
FDI is defined as the net inflows of investment (inflow minus outflow) to

3. acquire a lasting management interest (10 percent or more of voting stock)
in an enterprise operating in an economy other than that of the investor.
Foreign investment robustly increases local productivity grows.
The Commitment to Development Index ranks the "development-friendliness"
of rich country investment policies.
The investing firm needs sufficient cooperation and concessions to justify
their business case in terms of lower labor costs, and the opening of the
country's or even regional markets at a distinct advantage over (global)
competitors. The hosting country needs sufficient contractual promises to
politically sell uncertain benefits—versus the better-known costs of
concessions or damage to local interests.
The benefits to the host may be: creation of a large number of more stable
and higher-paying jobs; establishing in lagging areas centers of new
economic development that will support attracting or strengthening of many
other firms without costly concessions; hastening the transfer of premium-paying
skills to the host country's work force; and encouraging technology
transfer to local suppliers.
Foreign investment was introduced in 1991 under Foreign Exchange
Management Act (FEMA), driven by Finance minister Manmohan Singh. As
Singh subsequently became a prime minister, this has been one of his top
political problems, even in the current (2012) election.
Starting from a baseline of less than $1 billion in 1990, a recent UNCTAD
survey projected India as the second most important FDI destination (after
China) for transnational corporations during 2010–2012. As per the data,
the sectors that attracted higher inflows were services, telecommunication,
construction activities and computer software and hardware.
Mauritius, Singapore, US and UK were among the leading sources of FDI.
Based on UNCTAD data FDI flows were $10.4 billion, a drop of 43% from
the first half of the last year.
How Political, Legal, Economic and Technological Systems
Affect International Business?
Perhaps the most important considerations for global business firms are
the political and legal forces operative in the countries in which they plan to
conduct business.

4. Some foreign governments are unstable, that is, there may be frequent,
dramatic and unpredictable regime changes and/or political unrest. When
this occurs industries may be nationalized; private property may be seized
or destroyed; normal business operations may be suspended, the
workforce may go on strike.
For example, during the recent unrest in Venezuela banks were shut down
for months, workers were on strike, rioting broke out, food stuffs were
seized from private companies.
Even within relatively stable governments, as different administrations
come to power different business regulations and attitudes may be
adopted.
Governments of different countries use various techniques to encourage
and discourage global transactions. When governments favor international
trade, they create a friendly environment in the form of free trade zones,
free trade agreements and trading blocs.
On the contrary, when they want to shield their countries from international
competition, they institute trade barriers and protectionist measures such
as tariffs, quotas, even licensing requirements.
Transactions between different countries around the world create a need
for money exchange. This need comes into play because each country has
its own currency system.
A company usually likes to receive its payment in its home currency. As a
result, companies need to convert currencies by buying or selling the
currency of one country to another. This is done by using the exchange
rate of different available markets such as the spot market, forward market
and the future market depending on the ultimate goals.
At this stage, the success of an international company is relative to the
currency of the country where it operates. If the currency of that country
is soft which means it is not easily convertible, it may present a problem.
On the other hand, it can also be a hard currency, which means it can be
exchanged with no difficulty.
When approaching a host country, it is essential to determine the tendency
of the economic system of that country. This can very well determine the
economic success of a company in that country because some economic
systems value individual goals better than collective goals and vice versa.

5. This tendency can create environments where one type of business can be
more welcomed than another. Although there are different types of
economic systems around the world such as centrally planned economy,
market economy, countries that lean more toward our free market
economic systems have been proven to be working better. The economic
conditions of any country fluctuate regularly.
One key factor to stability is the rate of inflation. Sometimes governments
are unable to control the rate of inflation through monetary policy and other
times they even exacerbate inflation but printing too much currency.
Another factor is the relative value of one currency versus another. When
the relationship changes it may cost more or less to do business.
For example, when the currency of the other country devalues relative to
your own, it could be an advantage to you if you wish to produce in the
other country and sell at home. If currency values fluctuate dramatically
and rapidly it is very difficult to plan.
The International Monetary Fund (IMF) was established to monitor the
exchange rates among currencies and intervene when there is a currency
crisis.
For example, we have seen the IMF step into Argentina when the ARS
(peso) experienced runaway inflation.
Impact of technology on International Business
The tremendous technological growth that is being witnessed is made
possible through extensive programs of technological research being
conducted by many types of researches working within universities,
business and non-profit research organizations.
Technological developments are strong and all pervasive forces of the
business environment. Technology is the scientific knowledge to practical
problems.
Technology feeds on itself and it affects business in two major ways-
1. Through its impact on society in general
2. Through its direct influence on business operations and activities
Technology affects society. In fact it affects our everyday lives. It affects
economic growth, our standard of living and our culture. However, some of

6. the effects of technology are highly beneficial and some detrimental. These
effects on members of the society may in turn affect business practices.
The discovery of new technology sometimes affects economic growth- TV
with its high entertainment value takes away productive hours of mankind.
Each new technology creates major long term consequences, which are
not always foreseeable.
Developing nations have to buy new technologies from foreign countries,
as they are not resourceful in term of capital needed for Research and
Development, expertise, patents, licenses and equipments and so on.
This transfer of technology involves huge costs as a result of which a
vicious circle is formed, in which weak technology creates dependence and
dependence creates weakness.
Technology has changed the dynamics of how business is conducted and
has also affected the ways people communicate with one another. This is
especially true since the Internet has been integrated into the workplace.
The ability to link information systems has moved the business
environment to the global environment. This capability is very powerful and
most businesses have figured out how to harness this power and use it to
gain a competitive advantage. As a result some issues have arisen that
businesses must pay close attention to. The integration of technology into
business has impacted areas such as diversity, ethics and organizational
structure.
The global atmosphere is now presented with new business opportunities,
such as outsourcing, making international business deals, exposing
themselves to a larger customer base and employees do not even
necessarily need to live in the same country as their bosses!
Business processes are primarily connected to information systems and
various other forms of technology, and people using automation must act
responsibly with the data they transmit as part of their daily tasks.
Technological architectures provide businesses with the opportunity to find
previously undiscovered territory, and this is an ongoing process. It is not
too uncommon to find new organizational structures emerging and those
already in place experiencing rapid change.
Even small businesses, which previously were mostly confined to local
markets, are now able to compete alongside the 'big dogs' in markets

7. which were formally closed to them. This is primarily due to the inclusion of
information systems as a part of their business processes.
Information systems have done a lot more than just expand local markets.
They've also affected diversity, ethics and organizational structures. As a
result businesses must learn to adapt and embrace these revolutionary
changes in order to grow and maintain success.

8. David Richado’s theory about Comparative Advantage
International trade attracted much attention from the burgeoning time of
economics. Most of the economists who wrote between 1500 and 1750
advocated what is now called Mercantilism.
It proposed to increase export and decrease import in order that the state
can accumulate precious metals. Mercantilists thought that the plenty of
money metal makes country rich.
Adam Smith opposed to this idea and preached the gains from trade.
Although Smith preached free trade, he could not show when and how the
trade is profitable.
It was Ricardo who made it clear by the logic what is now
called comparative advantage. His numerical example is given as follows:
Labor necessary to the production
Country Product Cloth Wine
England 100 120
Portugal 90 80
Paul Samuelson called these numbers the "four magic numbers". In spite
of the fact that Portuguese could produce both cloth and wine with less
amount of labor, Ricardo showed that both countries have merits to trade
with each other.
What determines the direction of trade is not the absolute advantage in the
production of goods but the ratio of labor inputs necessary to produce
products, thus the denomination of "comparative advantage."

9. Benefits from trade in Ricardo's example are easy to be seen. Ricardo
assumes that cloth and wine (of the given quantities, but not specified) are
exchanged at equal international value.
Therefore, if England exports cloth, which is the produce of 100 workers a
year, it gets wine, which would be the produce of 120 workers a year and
can reduce the total amount of labor by 20 workers.
As for Portugal, it exports wine, which is the produce of 80 workers a year,
and procures cloth, which is the produce of 90 workers a year. Thus both
countries can reduce by trade labors which are necessary to procure the
same amount of commodities.
The chance of trade, which is beneficial to both traders, is much wider than
the cases when the doctrine of absolute advantage is applicable.
Indeed, when the ratio of labor inputs Cloth/Wine for England is smaller
than the ratio of labor inputs Cloth/Wine for Portugal, then the comparative
advantage theory teaches us that the same kind of benefits can be derived
from trade.
If a country should have absolute advantage for it to export a product, then
the trade can occur in special, restricted cases where both counties have
absolute advantage (i.e. to have higher productivity than the other country)
for one of products they produce.
For example, the case like the following table:
Labor necessary to the production
Country Product Cloth Wine
England 90 120
Portugal 100 80
Ricardo's example has continued to give inspirations until now to the
students of international trade. At present there are two major forms of
comparative advantage, which form the basis of modern trade theory. They
are Heckscher–Ohlin theorem and The Ricardian theory of international
trade.

10. Implication to International Business
There are 3 categories of foreign exchange risk:
 Transaction exposure
 Translation exposure
 Economic exposure
Transaction exposure
This is the extent to which fluctuations in foreign exchange values affect the
income from individual transaction. E.g. A China company may receive less
US$ now for goods sold 3 months ago due to stronger RMB exchange rate
if the payment is quoted in US$.
Translation exposure
This is the impact of currency exchange rate changes on the reported
financial statements of a company. E.g. SingTel’s profit declined in 2009
due to translation loss as S$ was stronger against Australia $.
Economic exposure
This is the extent to which a company’s future international earning power
is affected by change rates.

11. Define Business Strategy. Steps involved in starting a Business
Activity
Business Strategy-
The definition of business strategy is a long term plan of action
designed to achieve a particular goal or set of goals or objectives. Strategy
is management's game plan for strengthening the performance of the
enterprise. It states how business should be conduct to achieve the desired
goals. Without a strategy management has no roadmap to guide them.
New businesses face many challenges, from planning and licensing to
opening bank accounts and creating a company website. Regardless of
where you are in the process, The Company Corporation can help. Follow
each step on our checklist to stay on the right track.
1. Write a business plan. Form goals and objectives for your new company.
A successful start to any business requires a detailed outline of what you
plan to accomplish.
2. Obtain start-up capital. Whether you use your own savings or obtain
loans, starting a business requires money. The loan process can take
months to complete, so start early. Lenders often request a completed
business plan prior to approval of funding.
3. Set up a legal business structure. Forming a corporation or LLC can
protect owners' personal assets from business debts. Additionally,
incorporating can provide credibility and tax benefits. Let the Company
Corporation help you incorporate or form an LLC online.
4. Register "Doing Business As" names. Will your corporation or LLC do
business under a name other than its legal name filed with the Secretary of
State? If so, it must file a DBA (Doing Business As) name. We can help
you file your DBA name.

12. 5. Appoint a Registered Agent. Businesses must maintain an address for
service of process where legal documents can be received. The Company
Corporation provides Registered Agent service for all companies that we
form.
6. Protect your company's name. Businesses file names on a per-state
basis, so other companies may be using the same or a similar name in
other states. Conducting a trademark search ensures that your unique
company name isn't already in use.
7. Obtain a Federal Employer Identification Number (EIN).Incorporated
businesses and companies that hire employees must obtain an EIN. The
Company Corporation includes this service in our Premium formation
package. You can also order an EIN separately.
8. Satisfy business licensing requirements. The Company Corporation
provides a Business License Compliance Package to identify typical
requirements for your business activities. Most state, county, and local
governments require businesses to obtain licensing before they begin to
operate. We can provide you with the application forms and contact
information for the appropriate agencies.
9. Draft internal documents for the business. Corporations are governed
by their internal bylaws, whereas LLCs are governed by an operating
agreement. The Company Corporation can customize bylaws or an LLC
operating agreement for your business.
10. Satisfy insurance requirements. Incorporating or forming an LLC
does not provide a company with business insurance. Most companies
obtain general business insurance from an insurance provider.
Corporations and LLCs that hire employees also typically obtain
unemployment and workers compensation insurance.
11. Establish a business presence. Identify a location for the business
and establish a business address. The Company Corporation offers regular
mail forwarding service in either Delaware or Nevada.
12. Establish a Web presence. Not having an effective Website
eliminates opportunities for new customers and more profit.
13. Develop business collateral. Businesses use customized
letterhead, cards, and forms with their company name and logo to establish

13. credibility. Vista Print makes "do-it-yourself" business cards, business
identity products, advertising products, and signage a snap.
14. Open a bank account and merchant account. To protect their
corporate or LLC veil, businesses must maintain separate business and
personal accounts and records. Establish a separate business bank
account so that your personal assets are not co-mingled with business
funds. Banks may also require an Employer Identification Number (EIN) in
order to open a business checking account.
15. Establish proper accounting procedures. The Company
Corporation understands that paying your taxes is only part of the picture
when it comes to setting up your business. Whether you need help setting
up your chart of accounts, have questions about completing a specific tax
form, or need answers to tax questions we can help. Request a 30 minute
consultation with a recommended accountant to discuss your unique
situation and get the answers you need.
16. Get a business credit card. A business credit card helps separate
your professional and personal expenses and can help you protect your
personal assets from business liabilities.
17. Identify where to get help. Smart business owners know where and
when to seek advice from other sources. Identify attorneys and
accountants in your area who can assist you with specific questions about
your business, or contact us to help identify a solution to meet your needs.
18. Get started. Schedule an opening day for your business. Giving
yourself a goal helps keep things on track and can increase your
productivity.
19. Complete additional filings as needed. Companies that expand to
do business outside their original state of incorporation or LLC formation
generally register in the those additional states. The Company Corporation
can assist with these registration filings, also called "qualifications."
Amendments can also be filed if the information listed on the formation
document, like the legal name of the company or address, changes.
Contact us at 800-818-6082 (toll-free) or 302-636-5440 for assistance with
additional state filings.
20. Follow government rules. Operating a small business means
satisfying ongoing government and legal requirements to maintain the

14. company's good standing. Stay aware of the steps needed to maintain your
company's status, and take advantage of The Company
Corporation's $50,000 Corporate Veil Guarantee, provided at no cost with
our Registered Agent service.
What is Overseas Market Research?
Overseas market research is any activity that helps you understand the
marketplace and the customer's needs and wants better.
Overseas market research ranges from preliminary market research using
the phone and the internet to thorough customer surveys, competitor
analysis and analysis of target markets, Marketing Channels and the
macro-environment in general.
Overseas market research gives insight in marketing problems, situations
or markets.
Overseas market research tests hypotheses about cause-and-effect
relationships.
Always. However, what you need to research and how thorough your
research must be depends on your actual knowledge / your 'white spots'
and the risks involved.
New Thoughts has extensive experience when it comes to overseas
market research. New Thoughts has a good network abroad and can help
you define and execute thorough overseas market research in cooperation
with affiliated foreign marketing consultancies.
10 free thoughts on overseas market research:

15. 1. Do make sure you understand the marketplace and the customer's
needs and wants yourself: If necessary, let professional marketers that
know your target market(s) research consumers and the marketplace first
and develop structures to manage marketing information beforehand.
2. Do use the internet to search for free reports on your potential markets
regularly. If necessary, let professional marketers do this preliminary
research.
3. Do research your (potential) competitors thoroughly. In many Western
countries companies are open about their strategies and communicate
about their markets and performance openly; So, think of the possibility to
have professional marketers collect the information available locally: It's a
fast and inexpensive way to gain hands-on knowledge.
4. Do talk with your foreign customers openly about your plans if it does not
harm their interests: Customers often are a cheap and very reliable source
for market information, especially if the relationship is strong.
5. When the internet is a potential medium in marketing communications,
do use tools like Google Analytics to retrieve market information.
6. To make sure adequate internet marketing information is gathered, do
hire professional internet marketers with access to - or actual native
language abilities for your potential target markets.
7. Do narrow the focus of any overseas market research: Prepare for a
dominating position in one market or part of a market before conquering the
rest of the world.
8. Make sure the outcome of your market research will enable you to make
decisions on market segmentation and - targeting and product
differentiation and - positioning.
9. Do conduct any overseas market research with respect for - and in mind
the local culture, - history and stage of development: Do not think light of
prejudices.

16. 10. Do get in-touch with one of our Western consultants in the Strategy &
Planning department now: Call 13603091702, send an email or contact us
via this website.
Explain the New Product Development process.
In business and engineering, new product development (NPD) is the
complete process of bringing a new product to market. A product is a set of
benefits offered for exchange and can be tangible (that is, something
physical you can touch) or intangible (like a service, experience, or belief).

17. There are two parallel paths involved in the NPD process: one involves the
idea generation, product design and detail engineering; the other involves
market research and marketing analysis.
Companies typically see new product development as the first stage in
generating and commercializing new product within the overall strategic
process of product life cycle management used to maintain or grow their
market share.
The eight stages
1. Idea Generation is often called the "NPD" of the NPD process[1].
 Ideas for new products can be obtained from basic research using
a SWOT analysis (Strengths, Weaknesses, Opportunities &
Threats). Market and consumer trends, company's R&D
department, competitors, focus groups, employees, salespeople,
corporate spies, trade shows, or ethnographic discovery methods
(searching for user patterns and habits) may also be used to get
an insight into new product lines or product features.
 Lots of ideas are generated about the new product. Out of these
ideas many are implemented. The ideas are generated in many
forms. Many reasons are responsible for generation of an idea.
 Idea Generation or Brainstorming of new product, service, or store
concepts - idea generation techniques can begin when you have
done your OPPORTUNITY ANALYSIS to support your ideas in
the Idea Screening Phase (shown in the next development step).
2. Idea Screening
 The object is to eliminate unsound concepts prior to devoting
resources to them.
 The screeners should ask several questions:
 Will the customer in the target market benefit from the
product?

18.  What is the size and growth forecasts of the market segment /
target market?
 What is the current or expected competitive pressure for the
product idea?
 What are the industry sales and market trends the product idea
is based on?
 Is it technically feasible to manufacture the product?
 Will the product be profitable when manufactured and
delivered to the customer at the target price?
3. Concept Development and Testing
 Develop the marketing and engineering details
 Investigate intellectual property issues and search patent
databases
 Who is the target market and who is the decision maker in the
purchasing process?
 What product features must the product incorporate?
 What benefits will the product provide?
 How will consumers react to the product?
 How will the product be produced most cost effectively?
 Prove feasibility through virtual computer aided rendering and
rapid prototyping
 What will it cost to produce it?
 Testing the Concept by asking a number of prospective
customers what they think of the idea - usually[citation
needed] via Choice Modeling.
4. Business Analysis
 Estimate likely selling price based upon competition and customer
feedback
 Estimate sales volume based upon size of market and such tools
as the Fourt-Woodlock equation
 Estimate profitability and break-even point
5. Beta Testing and Market Testing
 Produce a physical prototype or mock-up
 Test the product (and its packaging) in typical usage situations

19.  Conduct focus group customer interviews or introduce at trade
show
 Make adjustments where necessary
 Produce an initial run of the product and sell it in a test market
area to determine customer acceptance
6. Technical Implementation
 New program initiation
 Finalize Quality management system
 Resource estimation
 Requirement publication
 Publish technical communications such as data sheets
 Engineering operations planning
 Department scheduling
 Supplier collaboration
 Logistics plan
 Resource plan publication
 Program review and monitoring
 Contingencies - what-if planning
7. Commercialization (often considered post-NPD)
 Launch the product
 Produce and place advertisements and other promotions
 Fill the distribution pipeline with product
 Critical path analysis is most useful at this stage
8. New Product Pricing
 Impact of new product on the entire product portfolio
 Value Analysis (internal & external)
 Competition and alternative competitive technologies
 Differing value segments (price, value and need)
 Product Costs (fixed & variable)
 Forecast of unit volumes, revenue, and profit

20. Various strategies to launch new product in the market.
Many new products are launched into the marketplace with little prior
planning for targeting the customers, creating a sales strategy, developing
a distribution strategy, training the sales force, and integrating the
competitive strategy.
This mistake significantly reduces or eliminates any potential profit the
product may have, and greatly increases the sales development time.
These problems must be avoided if a company wants to survive in today's
competitive marketplace.
10 Ways Market Engineering Can Help Make New Product Launches
More Successful
1. Identifying the best customer segments for penetration
2. Positioning the product successfully against competition
3. Optimizing impact of sales strategy

21. 4. Creating a system to maximize sales leads while minimizing
marketing expense
5. Basing sales strategy on customer benefits rather than features
6. Making the team market-driven rather than technologically driven
7. Setting sales goals based on market potential, not staff's guesses
8. Reducing sales development time and maximizing profit
9. Improving market efficiency
10. Identifying optimal mix of marketing tools and distribution
channels to maximize sales
Market Engineering Checklist for Product Launch
 Market Engineering cross-functional team training
 Determination of Market Engineering Measurements
 Completion of customer survey
 Focus group performance
 Beta sites on product
 Selection of distribution channels analyzed
 Sales targets based on market size and potential
 Design of lead generation programs
 Design of market-based pricing strategy
 Lead tracking systems
 Design of public relations strategy
 Design of sales strategy
 Design of marketing strategy
 Competitive analysis and benchmarking
 Design of customer database
 Development of customer database
 Design of market monitoring system
 Buying, reading, and implementing Customer Engineering

22. What is sales promotion strategy? How does it benefits into
business?

23. Sales promotion has been one of the most heavily used weapons of the
producers or manufacturers. It is counted amongst one of their most
affective ways of boosting their sales.
Sales promotion has certain misconceptions attached to it. One of the most
obvious is that sales promotion is only considered as targeted only at the
wholesalers. However, this notion is totally wrong.
There are many ways to promote the sales. Sales promotion can be
targeted at the wholesaler, retailer or even at times the end customer.
There are various methods that are used.
First of all, a producer or manufacturer should be able to know his channel
members i.e., is the intermediaries and the end customers very well.
Moving a product through all these members to the end customer is not an
easy job. It takes a lot of patience and understanding.
There are many strategies built around the philosophy of moving the
products through. There are three strategies that are widely used to boost
the sales promotion activities.
1. Push Strategy
In a push strategy the company is sure that its customers want the product.
The only thing lacking is the lack of push the products have from the
intermediates i.e., the wholesalers and retailers. In this the company
provides incentives to these intermediaries and asks them to push the
product by increasing its sale. This kind of strategy is usually involved in
products where there is fierce competition amongst producers and the
intermediaries are given heavy margins by each producer to ensure his
product is given the preference.
2. Pull Strategy
This strategy is quite the opposite of the push strategy discussed above.
The assumption in this strategy is that the customers either don't know at
all or not enough about the manufacturer's product features to have an
interest in it. By adopting this strategy the producer works with the
intermediaries, especially the retailers to better present the products not
only in shelves but also improve its general outlook.
3. Mix Strategy
This kind of strategy is adopted when the company thinks that the products

24. need a push from both sides. Neither the intermediaries are pushing the
product of the company to the extent nor the customers know or are
interested in the product. To make this thing really happen the company
simultaneously launches a two prong battle. This strategy is obviously more
cost bearing and takes more time to materialize. In this strategy the
company not only gives heavy margins to the intermediaries like the
wholesalers and distributors, but also tries to attract the customers by
making its products more attractive in shelves and packaging.
Evaluating the effects of a promotion strategy involves comparing its results
with the objectives. Although this may seem simple, determining promotion
effects can be difficult.
For example, even clearly stated cognitive objectives, such as “increase
brand awareness by 25 percent,” are not easily evaluated because different
methods of measuring awareness may give different results.
Moreover, it is often difficult to determine whether a change in brand
awareness resulted from the promotion strategy or from something else,
such as word-of-mouth communication.
Similarly, promotion objectives stated in behavior terms— “increase sales
by 10 percent”—can be hard to evaluate. It is often difficult to determine
what factors caused a sales increase.
Increases in competitors’ prices, opening new territories and outlets,
changes in consumers’ attitudes, and various other factors may be
responsible for the increase in sales. Likewise, if sales decrease or remain
the same during the promotion period, it is difficult to determine whether the
promotion strategy was ineffective or whether other factors were
responsible.
In other cases, however, evaluation of promotion effects can be relatively
straightforward. Sales promotion tools such as coupons are used to
stimulate short-term sales, and coupon redemption rates can give a good
idea of effectiveness.

25. The dollar amounts sold by different salespeople can also be compared to
determine their relative effectiveness. In sum, although measuring the
effectiveness of promotion strategies may be difficult, marketers do have
methods for estimating these effects.
Steps involved in promoting new product in international market.
Getting a new product out for customers to see and try out is the first step
in selling that product successfully. Even the best product will do little good
for the public if they do not know it exists.
Therefore, business owners or marketing professionals must utilize various
marketing techniques to guarantee that the right audience knows about the
product and that they receive the knowledge as effectively as possible.
Fortunately, there are a number of fairly simple marketing opportunities for
spreading the word and ensuring sales.

26. Offer promotional products. The majority of people love freebies, and
creating an event at which you give away products is more likely to draw
customers that might not otherwise have been interested.
In addition, a promotional event creates an opportunity for you to send out
a press release about the event--as well as the product--and thus utilize the
local media outlets, such as newspapers and news programs, for getting
the word to the public.
Order printed promotional material that shares information about the
products. Printed promotional material can range from simple flyers to more
elaborate pamphlets that detail product specifications.
In addition, business cards can be an excellent marketing tool. If the
company features one product in particular, the business card can note that
the company is & amp; ldquo; home of the ______ product & amp; rdquo;
or something along those lines, to keep the connection in mind for
customers. And be sure to hand out as many of these printed promotional
items as possible, to reach the widest desired audience.
Create sample sizes of products and offer them to those who can review
the products and offer feedback or a positive response. Focus on sending
the samples to those with credibility in the industry, such as professionals
or experts whose feedback will have more effect on convincing customers
to try the product.
Collect testimonials from customers who have used and enjoyed the
product. Testimonials can be a powerful tool for convincing potential
customers to take the plunge, because they create the link between
customers who trust the opinions of others like themselves.
Suppose, for instance, that you have designed and are marketing a new
range of hand lotion. Testimonials from customers can be powerful for
persuading others to pass by more familiar names to use your product.
What is more, testimonials that speak to specific & amp; ndash; such as
reduced psoriasis or elimination of chapping on hands & amp; ndash can
help to convince others with similar concerns.

27. A marketing plan provides details on how a company plans to achieve its
marketing objectives. Marketing plans are used to promote an entire brand
or product line and individual products or services. A good marketing plan
is vital to the economic success of new products.
Step 1
Conduct market research. Learn who is using the product, who will buy it
and to whom is it beneficial?
Step 2
Investigate the competition. Evaluate how your product differs or compares
to current product offerings and determine the ways in which your
product/company excels. Identify the reasons customers purchase
elsewhere and the ways that you can entice them to purchase your new
product instead.
Step 3
Determine your marketing strategy and test it with focus groups to
determine their response to your promotions. Most successful product
launches involve marketing of many types. Online promotions,
radio/television spots, and email solicitations can all lead a visitor to your
website to learn more about the new product and other product offerings.
Step 4
Create a public relations program. Ideas include allowing the press to
review your product, writing articles to send to public media, giving
interviews, and holding a launch event. The more opportunities you have to
present your product to the target market, the more people will know the
product and become interested in purchasing it.
Step 5
Evaluate the readiness of the launch to make sure the overall timing is
coordinated and the product is absolutely ready when it is announced.
Step 6
Create a timeline in the marketing plan and follow up regularly to ensure
that everyone involved is on schedule.
Step 7
Train your customer service department fully so that employees can
effectively sell the product. The minute the product is available for
purchase, your sales staff should be fully knowledgeable about the product
and ready to sell it.
Define Business Ethics. How does business ethics affect on
international business?

28. Business ethics (also corporate ethics) is a form of applied
ethics or professional ethics that examines ethical principles and moral or
ethical problems that arise in a business environment. It applies to all
aspects of business conduct and is relevant to the conduct of individuals
and entire organizations.
Business ethics has both normative and descriptive dimensions. As a
corporate practice and a career specialization, the field is primarily
normative. Academics attempting to understand business behavior employ
descriptive methods.
The range and quantity of business ethical issues reflects the interaction of
profit-maximizing behavior with non-economic concerns. Interest in
business ethics accelerated dramatically during the 1980s and 1990s, both
within major corporations and within academia.
For example, today most major corporations promote their commitment to
non-economic values under headings such as ethics codes and social
responsibility charters. Adam Smith said, "People of the same trade seldom
meet together, even for merriment and diversion, but the conversation ends
in a conspiracy against the public, or in some contrivance to raise prices."
Governments use laws and regulations to point business behavior in what
they perceive to be beneficial directions. Ethics implicitly regulates areas
and details of behavior that lie beyond governmental control.
The emergence of large corporations with limited relationships and
sensitivity to the communities in which they operate accelerated the
development of formal ethics regimes.
 The search for universal values as a basis for international commercial
behavior.
 Comparison of business ethical traditions in different countries. Also on
the basis of their respective GDP and [Corruption rankings].
 Comparison of business ethical traditions from various religious
perspectives.

29.  Ethical issues arising out of international business transactions; e.g., bio
prospecting and bio piracy in the pharmaceutical industry; the fair trade
movement; transfer pricing.
 Issues such as globalization and cultural imperialism.
 Varying global standards—e.g., the use of child labor.
 The way in which multinationals take advantage of international
differences, such as outsourcing production (e.g. clothes) and services
(e.g. call centers) to low-wage countries.
 The permissibility of international commerce with pariah states.