Developing Pricing Strategies and Programs Marketing Management Price Changing in the Internet Internet reverse the fixed pricing trend‚ since: Buyers can: Get instant price comparisons from thousands of vendors. Name their price and have it met. Get products free. Both Buyers and Sellers can: Negotiate prices in online auctions and exchanges Sellers can: Monitor customer behavior and tailors offers to individuals. Give certain customers access to special prices. Consumer Psychology
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Global Financing and Exchange Rate Mechanisms: Hard and Soft CurrenciesCurrency is an item that is exchanged for goods and services. Currency is in the form of paper bills and coins. These paper bills and coins have monetary value and are considered either hard or soft currency depending on the originating country ’s government. It ’s estimated by the Bank for International Settlements that $6.4 trillion is internationally financed by banks around the world and that the total world banking assets
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Review Questions for Final Exam November 2013 1. Discuss why much of the recent increase in FDI is being driven by the dramatic political and economic changes that have been occurring in many of the world’s developing nations. a. These countries are now open to FDI and companies in places that are developed want to go to places people don’t have all the products or as many of the product they sell. 2. Exporting is an attractive option for products that have a low value-to-weight ratio
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CHAPTER 18 Financing Foreign Trade EASY (definitional) 18.1 Which of the following payment methods provides the exporter with the strongest protection against risk? a) Cash in advance b) Letter of credit c) Draft d) Consignment Ans: a Section: Cash in advance Level: Easy 18.2 Which of the following payment methods provides both parties with a strong measure of protection against commercial and political risks? a) Cash in advance b) Letter of credit c) Draft d) Consignment
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Global Financing and Exchange Rate Mechanisms Global Business Strategies – MGT 448 University of Phoenix Introduction Business continuously expands into global organizations finding it necessary to pay close attention to the foreign exchange market. These companies must follow the foreign exchange market closely and should develop appropriate hedging strategies to protect them. Exchange rate risk is the unexpected exchange rate that may cause an organization to lose or gain income. Currency
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Market Selection Market selection is very important to all companies that make international trade with other countries. The market selection process should result in a prioritized market portfolio‚ a prioritized list of markets worthy of investment and pursuit. Actually‚ the market selected must hold the growth potential needed to achieve the desired revenue objectives. Unfortunately‚ the market selection process is fraught with problems. Most of which can be tied directly to the way markets
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risks. Allowing internationally reputable banks to operate in the country and offer documentary credit is one way to effectively solve this problem. b) Countertrade As mentioned above‚ most emerging economies face the problem of limited foreign exchange holdings. One way to overcome this constraint is to promote and encourage countertrade. Today’s modern counter trade appears in so many forms that it is difficult to devise a definition. It generally encompasses the idea of subjecting the
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different entry modes. ADMINISTRACIÓN INTERNACIONAL Expor%ng‚ Impor%ng & Countertrade Contractual Entry Investment Entry ADMINISTRACIÓN INTERNACIONAL " Expor%ng: - - Direct Expor%ng Indirect Expor%ng " Countertrade: Expor%ng‚ Impor%ng & Countertrade Prac%ce of selling goods or services that are paid
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International trade Payment methods Payment Methods for International Trade * Prepayments: The goods will not be shipped until the buyer has paid the seller. * Time of payment: Before shipment * Goods available to buyers: After payment * Risk to exporter: None * Risk to importer: Relies completely on exporter to ship goods as ordered * Letter of Credit (L/C): These are issued by a bank on behalf of the importer promising to pay the exporter upon presentation of the shipping
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Prepare a 1‚050- to 1‚750-word paper in which you analyze one of the following global financing and exchange rate topics: · Purchasing power parity and the Big Mac index · Currency hedging · Hard and soft currencies · Countertrade · Financing via letters of credit and EXIM Bank and commercial banks · Tariff and nontariff barriers · Roles of international financial institutions (e.g. IMF‚ World Bank‚ ADB‚ etc.) · Euro currency markets
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