The document discusses various aspects of promotion and financing in international marketing. It covers topics like the functions and challenges of promotion abroad, personal selling, and different payment terms and financing options available to exporters. These include cash in advance, open account, consignment sale, documents against payment/acceptance, letters of credit, pre-shipment credit, post-shipment finance like buyer's credit, supplier's credit and line of credit. Cultural differences, regulations and infrastructure issues are some of the problems faced in international marketing communications. Proper promotion and adequate financing methods are important for the success of products overseas.

1. Unit-7

2.  If promotion is not appropriate and adequate,
product may not achieve full success.
 Advertising answers what to buy, where as
promotion answers why to different receivers.
 Promotion should be consistent with other three
ingredients of Marketing Mix.
INTERNATIONAL PROMOTION

3.  Making the potential consumers aware of product.
 Persuading the consumers to buy the product.
 Motivating the consumers to buy the product by
special incentives.
 Motivating the channels to handle the product.
Functions of Promotion

4.  Promotion is often very complex problem in
international marketing, because of marketing
difference.
 Foreign countries have their own customs,
traditions and practices regarding trade promotion,
gift-giving etc. Ignoring them could be disastrous.
 e.g. A foreign affiliated company & Japanese firm
 Japanese rebate, entertainment and gift giving
practices differ significantly from Western
practices.
 US, retailers ask for ‘slotting allowance’ - payment
by manufacturers to get their lines into cabinet
MARKETING ENVIRONMENT AND PROMOTION
STRATEGIES

5.  Standardization of promotional strategy are made
difficult or impossible by government regulations
 Non-availability/under development of certain
promotional media
 e.g. of Matsushita Electronics with the brand name
National Panasonic–Rice Cooker with recipe book
 Promotion strategy will have to be tailor-made to
suit the particular marketing environments.

6.  Identifying the Target Audience
 Determining Communication Objectives
 Budget Decisions
 Common methods to budget
 Affordable Method
 Percentage of Sales Method
 Competitive Parity method
 Determining the Message
 What
 How
 Who
DECISIONS IN INTERNATIONAL MARKETING COMMUNICATION

7. PERSONAL SELLING IN INTERNATIONAL
MARKETING
 Personal Selling is the personal communication of
information to persuade prospective customer to
buy something
 The success of new products.
 Keeping existing products in strong market
positions
 Opening new business
 Helps in getting better feed back about product
 Make customer grievance handling easy
 Firms which cannot compete in advertising with mega
budget advertisers.
 Effective supplement or follow-up to lead provided
by advertising.

8.  Personal Selling is personal touch
 Most effective method in explaining product features
and clarifying customer doubts
Limitations:
 Major limitation of personal selling is high cost
 Success depends to large extent on ability and
sincerity of the sales personnel.
 If a sales person quits suddenly, it may cause
dislocations problems.

9.  Differences in Regulations
 Cultural Differences
 Media Factors
 Infrastructure
 Cost Factors
 Language Factors
 Home Country Regulations
PROBLEMS IN INTERNATIONAL MARKETING COMMUNICATION

10.  Extent to which credit must be extended to the
importer depends on the sale terms.
 If the exporter gets cash in advance, there will not be
any problem in respect of finance
 If the exporter gets the payment at the time of the
shipment of the goods, one has to make his own
arrangements to meet his financial needs at the pre-
shipment stage
 If the sale is on credit, as it usually is, the exporter will
be more constrained financially
 It is therefore, necessary to make institutional credit
available to the export sector to meet it’s pre-
shipment and post-shipment financial requirements
EXPORT FINANCE

11. Payment Terms
 Cash in Advance
 may be insisted upon when goods ordered are
those manufactured to order in accordance with the
specifications of the buyer
 when the buyer is unknown to the seller or his
creditworthiness is doubtful, the seller would like to
get the payment in advance
 Remittance with the order, or sometimes, before the
shipment of goods
 Remittance made by draft, cheque, mail or telegraphic
transfer

12.  Exporter ships goods with no financial documents
to his advantage except the commercial invoice.
 The seller carries the entire financial burden wit h
little or no documentary evidence.
 It is generally restricted to cases of transactions
between inter-connected companies
 Exporter and overseas buyers have had long and
well-established commercial relationship
Open Account

13. Consignment Sale
 The exporter consigns goods to their agent or
representative in the foreign markets
 The exporter retains the title to the goods until the
sale of the goods is effected in the foreign market
 Goods consigned abroad include tea, coffee, wool,
etc., which cannot be easily standardized
 The seller is not protected against default. He is
also exposed to such risks as exchange
fluctuations

14.  Also known as cash against documents (c.a.d.),
the exporter ships goods to the foreign buyer, but
the documents giving title to the goods will be
handed over to the buyer through the bank only
on payment
 Exporter may obtain bank finance against D/P
bills. If bank is satisfied, it may finance exporter
by purchasing the D/P bills.
Documents Against
Payment

15.  Under the D/A terms, the exporter relies on the
honesty and creditworthiness of the buyer.
 This facility is extended only to parties who have
proven business integrity and financial standing
Documents on Acceptance

16.  A letter of credit is document contains guarantee
of bank to honor drafts on it by an exporter, under
certain conditions & up to certain amounts
 Instead of being drawn on the importer, the draft
is drawn on the importer’s bank
 A letter of credit eliminates risk for an exporter,
 He will be definitely paid for his shipment provided
 Immediately after shipment of the goods, he can
present the bill of exchange and other relevant
documents and obtain payment
Documentary Letter of
Credit

17.  If exporter gets payment at time of shipment of
goods
 Arrange for finance to meet expenses such as;
purchase of materials & components, processing,
packaging, packing, marking, warehousing
 Exporter has to wait for period of time — short,
medium or long - even after the shipment of
goods to obtain payment from overseas buyer
INSTITUTIOINAL FINANCE FOR
EXPORT

18.  Pre -shipment Credit, also known as packing
credit, refers to the credit extended to the exporter
prior to the shipment of goods
 All the packing credit advances must be repaid
from the proceeds of the relative export bills
negotiated or from the remittances received from
abroad for the relative goods
 The loan is advanced only on receipt of export order:
 To obtain the loan, the exporter should deliver to the
bank either letter of credit established in his favor or
confirmed export order
Pre-Shipment Credit

19.  International market is very competitive, extension
of credit facilities to buyers is one of the important
determinants of the expansion in export business
 To promote the export business, the burden of
credit should be shifted from the exporters by
either the financial institutions providing credit,
directly or indirectly, to the buyers.
 Financial institutions provide buyer’s credit, line of
credit, and supplier’s credit
Post-Shipment Finance

20.  Credit is extended to overseas buyer by either a
financial institution or a consortium of financial
institutions
 Buyer’s credit is advanced for capital goods
 If financial institution that, provides the buyer’s
credit is located in export ’s country. The loan does
not involve transfer of funds from the supplier’s
country to the buyer’s country; the exporter may
obtain the payment directly from financial
institution on presentation of relevant documents
Supplier’s Credit

21.  When number of buyers are involved, instead of
negotiating credits with each one, the financial
institutions in the supplier’s country may extend
line of credit to financial institutions in the buyers’
country which, in turn, will disburse the credit to
the buyers in respect of approved transactions
 Great advantage of the line of credit is that the
responsibility for judging the creditworthiness of
the buyers is shifted to financial institution in the
buyer’s country.
Line of Credit

22. Thank You