MKT 505 WEEK 5 DISCUSSION - 85214

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Discussion board 5-1. Interactive Activity: Global Business Today. Please respond to the following: 1. Imagine this scenario: you are a marketing manager for a small tea company, Azure Sky Tea. Devise a process for the company to efficiently import raw tea from a large Indian port into the U.S. Provide a rationale for your recommendation. 2. Recommend a trade financing process for Azure Sky Tea. Provide a rationale for your recommendation. Discussion board 5-2. Licensing and Market Entries. Please respond to the following: 1. What is the major advantage of using licensing as a market entry tool? 2. What is the major disadvantage of using licensing as a marketing entry tool? 3. Analyze how keiretsu might affect a small company that is trying to compete with a Japanese competitor or that is trying to enter the Japanese market. 4. Which market entry option would you recommend for a small tea company, such as Azure Sky Tea? (ie. Licensing, foreign direct investment, or strategic alliance) NOTE: MORE THAN ONE ANSWER POSTED FOR EACH QUESTIONS AS A BONUS JUST CHOOSE ONE
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DISCUSSION 1

 

1. Imagine this scenario: you are a marketing manager for a small tea company, Azure Sky Tea. Devise a process for the company to efficiently import raw tea from a large Indian port into the U.S. Provide a rationale for your recommendation.

As a marketing manager for Azure Sky Tea, the following is my recommended process for the Azure Sky Tea to efficiently import raw tea from a large Indian Port (India Tea) into the US:

  • Contact India Tea and ask for a letter of credit
  • Once India Tea and Azure Tea agree to details such as price and terms of delivery, the next steps should be completed
  • We (Azure Tea) will go to our bank Nations Bank to apply for a letter of credit
  • Nations Bank agrees and sends a letter of credit to India Tea's bank (India Bank)
  • India Bank will inform India Tea that a letter of credit has been opened.
  • Tea is then shipped through a common carrier (ATP) which gives India Tea a Bill of Lading
  • India Tea presents the Bill of Lading to its bank (India Bank) with a 90 day time draft drawn on Nations Bank in accordance with the letter of credit and Bill of Lading.
  • India Tea endorses the Bill of Lading so the title of the goods is transfered to India Bank
  • India Bank sends a draft to Nations Bank and they alert Azure Tea
  • Nations Bank returns the draft to India Bank
  • India Bank alerts India Tea that it has the draft.
  • India Tea sells the draft to its bank at a discount value
  • India Bank now holds a draft of payment from Nations Bank
  • Azure Tea is informed and they agree to pay Nations Bank within the 90 days.
  • Nations Bank pays India Bank upon payment.

2. Recommend a trade financing process for Azure Sky Tea. Provide a rationale for your recommendation.

Request for a letter of credit on a time draft that would be paid in 90 days. A letter of credit can be used to guarantee payment for a product. The terms to the agreement are set down in a pro forma invoice which spells out how much and by what means the exporter seller wants to be paid.

A number of factors must be considered including but not limited to currency availability, credit worthiness of the buyer. many CFOs with international experience say that there is less collection problems on international sales.

Information retrieved from:

http://trade.gov/media/publications/pdf/trade_finance_guide2007.pdf

Lecture

International Marketing

OR

Discussion board 5-1. Interactive Activity: Global Business Today. Please respond to the following:

1. Imagine this scenario: you are a marketing manager for a small tea company, Azure Sky Tea. Devise a process for the company to efficiently import raw tea from a large Indian port into the U.S. Provide a rationale for your recommendation.

  • Azure Sky Tea orders Raw Tea from Indian exporter and asks for shipment under a Letter of Credit.
  • The exporter agrees to fulfil order under a letter of credit and after all details is worked out such as price, quantity, delivery methods etc.
  • Azure Sky Tea applies for Letter of Credit in the local Bank and after approved, it is made in favor of the exporting Ind
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