Incoterm

Incoterms or international commerce terms are a series of international sales terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions. These are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. This reduces or remove altogether uncertainties arising from different interpretation of such terms in different countries. Scope of this is limited to matters relating to right and obligations of the parties to the contract of sale with respect to the delivery of goods sold. They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices. They closely correspond to the U.N. Convention on Contracts for the International Sale of Goods. The first version was introduced in 1936 and the present dates from 2000.

ObjectivesIncoterms are internationally accepted commercial terms, developed in 1936 by the International Chamber of Commerce (ICC) in Paris. Incoterms 2000 define the respective roles of the buyer and seller in the agreement of transportation and other responsibilities and clarify when the ownership of the merchandise takes place. These terms are incorporated into export-import sales agreements and contracts worldwide and are a necessary part of foreign trade.

Incoterms are used in union with a sales agreement or other methods of sales transactions and define the responsibilities and obligations of both, the exporter and importer in Foreign Trade Transactions.

The main objectives of Incoterms 2000 revolve around the contract of Foreign Trade concerned with the loading, transport, insurance and delivery transactions. Its main function is the distribution of goods and regulation of transport charges.

Another significant role played by Incoterms is to identify and define the place of transfer and the transport risks involved in order to justify the ownership for support and damage of goods by shipments sent by the seller or the buyer in an event of execution of transport.

Incoterms make international trade easier and help traders in different countries to understand one another. These International Commercial Terms are the most widely used international contracts protected by the ICC copyright.

Incoterms safeguard the following issues in the Foreign Trade contract or International Trade Contract:

1. To determine the critical point of the transfer of the risks of the seller to the buyer in the process forwarding of the goods (risks of loss, deterioration, robbery of the goods) allow the person who supports these risks to make arrangements in particular in term of insurance.

2. To specify who is going to subscribe the contract of carriage that is to say the seller (exporter) or the buyer (importer).

3. To distribute between the seller and the buyer the logistic and administrative expenses at the various stages of the process.

4. It is important to define who is responsible for packaging, marking, operations of handling, loading and unloading, inspection of the goods.

5. Need To confirm and fix respective obligations for the achievement of the formalities of exportation and importation, the payment of the rights and taxes of importation as well as the sending of the documents. In dealing Foreign Trade there are 13 Incoterms globally adopted by the International Chamber of Commerce.

INTERNATIONAL INCOTERMSIncoterms or International commercial terms make trade between different countries easier. International Commercial Terms are a series of international trade terms that are used are used worldwide to divide he transaction costs and responsibilities between the seller and the buyer and reflect state-of-the-art transportation practices.

Incoterms directly deal with the questions related to the delivery of the products from the seller to the buyer. This includes the carriage of products, export and import responsibilities, who pays for what and who has the risk for the condition of the products at different locations within the transport process.

Incoterms and world customs Incoterms deal with the various trade transactions all over the world and clearly distinguish between the respective responsibilities of the seller and the buyers.

The 13 International Incoterms are:

Departure of goods by international transport with the risks and dangers to the Seller (Exporter) and Buyers (Importers)

1. "EXW"- Ex WorksTitle and risk pass to buyer including payment of all transportation and insurance cost from the seller's door. Used for any mode of transportation.

Seller : In EXW shipment terms the Seller (Exporter) provides the goods for collection by the Buyer (Importer) on the seller or exporter's promise. Responsibility for the seller is to put the goods, in a good package which is adaptable and disposable by the transport.

Buyer : The buyer or Importer arranges insurance for damage transit goods. The Buyer or importer has to bear all costs and risks involved in shipment transactions.

(However, if the parties wish the seller to be responsible for the loading of the goods on departure and to bear the risks and all the costs of such loading, this should be made clear by adding explicit wording to this effect in the contract of sale. )

2. "FCA"- Free Carrier named point"FCA"- Free Carrier named point: Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer's collecting vehicle; it is the Buyer's obligation to receive the Seller's arriving vehicle unloaded.

Seller : The Sellers responsibility is to deliver the goods into the custody of the transporters at defined points. It is important for the chosen place of delivery to have an impact on the obligations of loading and unloading the goods.

Buyer : The Buyer nominates the means of transport or shipping mode and pays the shipment charges.

The seller and the buyer agree upon the place for delivery of goods. If the buyer nominates a person other than a carrier or transporter to receive the goods, the seller is deemed to fulfill his obligation to deliver the goods when they are delivered to that person.

3. "FAS"- Free Alongside ShipFAS- Free Alongside ship: Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

In FAS has price includes all the costs incurred in delivering the goods alongside the vessel at the port or nominated place of the buyer but there is not applicable charges to the seller for loading the goods on board of vessel and no ocean freight charges and marine insurance.

Seller: The responsibility of the seller are fulfilled when the goods are placed cleared along the ship.

Buyer: Buyer or Importer bear all the expenses and risks of loss or damage of transit goods which are delivered along the ship.

4. "FOB" - Free On BoardThe FOB (Free on Board) price is inclusive of Ex-Works price, packing charges, transportation charges upto the place of shipment., Seller also responsible for o clear customs dues, quality inspection charges, weight measurement charges and other export related dues. It is important that the shipment term in the Bill of Lading must carry the wording "Shipped on Board' it must bear with signature of transporter or carrier or his authorized representative with the date on which goods were "Boarded".

Seller :Seller responsible for clear customs dues, quality inspection charges, weight measurement charges and other export related dues. It is important that the shipment term in the Bill of Lading must carry the wording "Shipped on Board' it must bear with signature of transporter or carrier or his authorized representative with the date on which goods were "Boarded".

Buyer : The buyer indicates the ship and pays freight, transfer expenses and risks is done when the goods passes or forwarding to the buyers warehouse by rail or ship.

5. "CFR"- Cost And FreightIn this term the exporter bears the cost of carriage or transport to the selected destination port, in this term the risk transferable to the buyers at the port of shipment.

Seller: The chooses the carrier, concludes and bears the expenses by paying freight to the agreed port of destination, unloading not included. The loading of the duty-paid goods on the ship falls on him as well as the formalities of forwarding. On the other hand, the transfer of risks is the same one as in FOB.

Buyer: The buyers supports all the risk of transport, when the goods are delivered aboard by ship at the loading port, buyer receives it from the carrier and takes delivery of the goods from nominated destination port.

6. "CIF"- Cost, Insurance And FreightCIF- Cost, Insurance and Freight: Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation.

This Term involves insurance with FOB price and ocean freight. The marine insurance is obtained by the exporter at his cost against the risk of loss or damage to the goods during the carriage.

Seller: The CFR extends additional obligation to the seller for providing a maritime So insurance against the risk of loss or damage to the goods. The seller pays the insurance premium.

Buyer: He supports the risk of transportation, when the goods have been delivered aboard the ship at the loading port. He takes delivery of the goods from the carrier to the appointed port or destination.

7. "CPT"- Carriage Paid ToCPT- Carriage Paid To: Title, risk and insurance cost pass to buyer when delivered to carrier by seller who pays transportation cost to destination. Used for any mode of transportation.This term uses land transport by rail, road and inland waterways. The seller and exporter are responsible for the carriage of goods to the nominated destination and have to pay freight up the first carrier.

Seller: The seller or exporter controls the supply chain after paying customs clearance for export. Seller or Exporter select the carrier and pay the expenses up to the destination.

Buyer: The risks of goods damages or loss are supported by the buyer as goods are given by the first carrier. The buyer or importer has to pay importation customs clearance and the unloading costs.

8. "CIP"- Carriage And Insurance Paid ToCIP- Carriage and Insurance Paid To: Title and risk pass to buyer when delivered to carrier by seller who pays transportation and insurance cost to destination. Used for any mode of transportation.This term is similar to Carriage Paid To but the seller has to arrange and pay for the insurance against the risk or loss or damage of the goods during the shipment.

Seller: The seller or buyer has to provide insurance and seller pays the freight and insurance premium.

Buyer: The buyer or importer supports the risks of damages or loss, as goods are given to the first carrier. The buyer has to pay customs clearance and unloading charges.

9. "DAF"- Delivered At FrontierDAF- Delivered At Frontier: Title, risk and responsibility for import clearance pass to buyer when delivered to named border point by seller. Used for any mode of transportation.

This term is used when the goods are to be carried by rail or road.

Seller : The seller is responsible to make the goods available to the buyer by the carrier till the customs border as defined in sales contract.

Buyer : The buyer takes delivery of the goods at the contract agreed point border and he is responsible for bearing all customs formalities.

10. DES"- Delivered Ex-ShipDES- Delivered Ex-Ship: Title, risk, responsibility for vessel discharge and import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation.

Seller: The seller is responsible to make the goods available to the buyer up to the named quay or after crossing the customs border.

Buyer: The buyer takes delivery of the goods from ship at destination port and pays the expenses of unloading.

11. DEQ"- Delivered Ex-QuayDEQ- Delivered Ex-Quay: Title and risk pass to buyer when delivered on board the ship at the destination point by the seller who delivers goods on dock at destination point cleared for import. Used for sea or inland waterway transportation.

12. "DDU"- Delivered Duty UnpaidDDU- Delivered Duty Unpaid: Seller fulfills his obligation when goods have been made available at the named place in the country of importation.

Seller: The seller is responsible for all transportation cost and accept the customs duty and taxes as per defined in customs procedures.

Buyer: The buyer is responsible of the importation customs formalities.

13. "DDP"- Delivered Duty PaidDDP- Delivered Duty Paid: Title and risk pass to buyer when seller delivers goods to the named destination point cleared for import. Used for any mode of transportation.

Seller: The seller is responsible to make the goods available to the buyer at his risk and cost as promised by the buyer. All the Taxes and duty on importation is promised by the buyer to the seller.

Buyer: The buyer is responsible to take delivery at a nominated place and pays the expenses for unloading of goods.

INCOTERMS 2012

INCOTERMS are a set of three-letter standard trade terms most commonly used in international contracts for the sale of goods. It is essential that you are aware of your terms of trade prior to shipment.

EXW EX WORKS ( named place of delivery)

The Sellers only responsibility is to make the goods available at the Sellers premises. The Buyer bears full costs and risks of moving the goods from there to destination.

FCA FREE CARRIER ( named place of delivery)

The Seller delivers the goods, cleared for export, to the carrier selected by the Buyer. The Seller loads the goods if the carrier pickup is at the Sellers premises. From that point, the Buyer bears the costs and risks of moving the goods to destination.

CPT CARRIAGE PAID TO ( named place of destination)

The Seller pays for moving the goods to destination. From the time the goods are transferred to the first carrier, the Buyer bears the risks of loss or damage.

CIP CARRIAGE AND INSURANCE PAID TO ( named place of destination)

The Seller pays for moving the goods to destination. From the time the goods are transferred to the first carrier, the Buyer bears the risks of loss or damage. The Seller, however, purchases the cargo insurance.

DAT DELIVERED AT TERMINAL ( named terminal at port or place of destination)

The Seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the Buyers disposal at a named terminal at the named port or place of destination. Terminal includes any place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The Seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination.

DAP DELIVERED AT PLACE ( named place of destination)

The Seller delivers when the goods are placed at the Buyers disposal on the arriving means of transport ready for unloading at the names place of destination. The Seller bears all risks involved in bringing the goods to the named place.

DDP DELIVERED DUTY PAID ( named place)

The Seller delivers the goods -cleared for import to the Buyer at destination. The Seller bears all costs and risks of moving the goods to destination, including the payment of Customs duties and taxes.

2. MARITIME-ONLY TERMS

FAS FREE ALONGSIDE SHIP ( named port of shipment)

The Seller delivers the goods to the origin port. From that point, the Buyer bears all costs and risks of loss or damage.

FOB FREE ON BOARD ( named port of shipment)

The Seller delivers the goods on board the ship and clears the goods for export. From that point, the Buyer bears all costs and risks of loss or damage.

CFR COST AND FREIGHT ( named port of destination)

The Seller clears the goods for export and pays the costs of moving the goods to destination.

The Buyer bears all risks of loss or damage.

CIF COST INSURANCE AND FREIGHT ( named port of destination)

The Seller clears the goods for export and pays the costs of moving the goods to the port of destination.

The Buyer bears all risks of loss or damage. The Seller, however, purchases the cargo insurance.

Market Intelligence

Market Intelligence is about providing a company with a view of a market using existing sources of information to understand what is happening in a market place, what the issues are and what the likely market potential is. See someexamplesof our work.

Market Intelligence can be divided into two spheres

Market Intelligence based on external data Market Intelligence based on internal dataOften Market Intelligence relies purely on external data such as analysts reports, but there is often a great deal of untapped information internally that would give you an insight into your market, from sources such as databases and prospect lists, and an holistic view can prove very insightful.

Market Intelligence from external data

Market intelligence from external data is normally gathered through what is known asdesk research. This means sourcing and analysing published information to build a picture of a market and to try and answer some specific commercial questions such as what is the market potential, what are competitors future plans likely to be, what prices might customers be willing to pay, what's the best means of entering a market.

Central to successful desk research is the ability to track downsources of informationand to provide the right level of analysis. For example identifying who your competitors are and analysing their market position against yours to find strengths and weaknesses and indications of new developments, or identifying potential channel partners or locations to set up new offices.

Consequently, related to desk research in the form of collecting background information, is the process of list building. This involves seeking out lists of likely prospects or partners for relationship or network building and finding out key information about the companies for marketing purposes. A variety of places provide off-the-shelf lists, but often these lists need to be enhanced with other forms of information to make them useful - for instance background information about what the business offers, it's market positioning and details of who to contact.

A specific form of Market Intelligence iscompetitive intelligence. This is typically undertaken on an on-going basis and involves the collection of news, materials and other information about competitors from a wide variety of sources. This may involve collecting information about market positioning and market messages, core clients or contracts, size and structure of the business and issues like pricing or typical deal structures. Examples might include collecting price-check information, or details of promotional and advertising campaigns, or monitoring news channels for information about new products or new technologies (eg patents). Although competitor intelligence can be carried out as a one off project, in reality, because of its on-going nature, competitive intelligence is often more about putting structures in place to enable information about competitor behaviour to be fed-back and monitored, than specifically finding one-off pieces of data. One key point is that for legal and ethical reasons, competitor research should not be carried out in any underhand way (eg misrepresentation) and so should rely only on openly available information sources.

Increasingly, Market Intelligence can involve collecting data from posts, tweets and other social media. This type of 'market intelligence' overlaps with some forms of market research and with PR monitoring. For some companies, the volume of comment together with the need to manage and monitor across multiple languages and multiple domains mean that large scale software is used to capture and then text-analyse the data. This can provide companies with good insights into the mood of a market about, for instance, a new product that has been launched. But it can also be part of a communication or PR campaign to allow companies to be alert to negative comment or problems that are publicised via the social networks

Market Intelligence from internal data

While much marketing intelligence is associated with collecting information externally, much marketing intelligence information can come from making better use of existing information such as customer databases, web-analytics and test-marketing. For instance by carrying outdatabase analysis

HYPERLINK "http://www.dobney.com/Intelligence/database.htm"on orders taken it may be possible to understand where you have cross-sale and up-sale opportunities, or to understand what type of customers are your most profitable. Common database analysis include tracking recency, frequency and value of purchases. Looking for pareto segments. Augmenting database lists with external data to identify purchasing patterns.

Database information is not the only source of market data. Your website may also include a high degree of valuable information about who is looking for your products and services.Web site traffic analysiscan help you understand what customers are looking for and why, and can be used in conjunction with test advertising and variations in site and page delivery (eg varying landing pages) to provide direct measurement and enhancement of marketing effectiveness.

Finally, don't overlook knowledge about customers, markets and competitors that comes from your staff. Often this is a poorly tapped source of information. Collecting and disseminating such information falls into the realms ofcustomer knowledgemanagement and making better use of this customer knowledge can help businesses focus far more on what the customer wants and says.

Problems of foreign trade.Foreign trade has a number ofcomplications. These are:

i. Payment between nations involved in foreign trade takes place through national currency of their own. This sorts of payment create a number ofcomplicationson exchange of currency.

ii. Highimport dutiesare levied to give protection to certain home industries. Similarly highexportduties are levied to restrictexportof certain commodities. The levying of high duties onexport and importcreate obstacles in the way of foreign trade.

iii. The goods are exposed to greater risks because these are to be transported over a long distance.

iv. The payment of goods are delayed because there is a wide gap between the time of dispatch of goods and its receipts.

v. This type of trade takes place without any personal contact between the seller and the buyer. So the creditworthiness of the buyer can not be judged by the seller.

Developing countries believe they get a raw deal when it comes to international trade. These problems include Relying on only one or two primary goods as their main exports

They cannot control the price they get for these goods

The price they pay for manufactured goods increases all the time

As the value of their exports changes so much long term planning is impossible

Increasing the amount of the primary good they produce would cause the world price to fall

Developing countries that try to export manufactured goods find that trade barriers are put in their way. There are two types of trade barrier -quotasandtariffs.

1. A quota is a limit on the amount of goods a country can export to another country

2. A tariff is a tax on imports

Other problems that developing countries face are they are short of the money that is needed to set up new businesses and industries. Also, developing countries have fewer people who have the wealth to buy the goods made in local industries.

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International trade is characterised by the following special problems or difficulties.

1. Distance:Due to long distance between different countries, it is difficult to establish quick and close trade contacts between traders. Buyers and sellers rarely meet one another and personal contact is rarely possible.

There is a great time lag between placement of order and receipt of goods from foreign countries. Distance creates higher costs of transportation and greater risks.

2. Different languages:Different languages are spoken and written in different countries. Price lists and catalogues are prepared in foreign languages. Advertisements and correspondence also are to be done in foreign languages.

A trader wishing to buy or sell goods abroad must know the foreign language or employ somebody who knows that language.

3. Difficulty in transportation and communication:Dispatch and receipt of goods takes a longer time and involves considerable expenses. During the war and natural calamities, transportation of goods becomes even more difficult. Similarly, the costs of sending or receiving information are very high.

4. Risk in transit:Foreign trade involves much greater risk than home trade. Goods have to be transported over long distances and they are exposed to perils of the sea. Many of these risks can be covered through marine insurance but increases the cost of goods.

5. Lack of information about foreign businessmen:In the absence of direct and close relationship between buyers and sellers, special steps are necessary to verify the creditworthiness of foreign buyers. It is difficult to obtain reliable information concerning the financial position and business standing of the foreign traders. Therefore, credit risk is high.

6. Import and export restrictions:Every country charges customs duties on imports to protect its home industries. Similarly, tariff rates are put on exports of raw materials. Importers and exporters have to face tariff restrictions.

They are required to fulfil several customs formalities and rules. Foreign trade policy, procedures, rules and regulations differ from country to country and keep on changing from time to time.

7. Documentation:Both exporters and importers have to prepare several documents which involve expenditure of time and money.

8. Study of foreign markets:Every foreign market has its own characteristics. It has requirements, customs, weights and measures, marketing methods, etc., of its own. An extensive study of foreign markets is essential for success in foreign trade. It is very difficult to collect accurate and up to date information about foreign markets.

9. Problems in payments:Every country has its own currency and the rate at which one currency can be exchanged for another (called exchange rate) keeps on fluctuating change in exchange rate create additional risk.

Remittance of money for payments in foreign trade involves much time and expense. Due to wide time gap between dispatch of goods and receipt of payment, there is greater risk of bad debts.

10. Frequent market changes:It is difficult to anticipate changes in demand and supply conditions abroad. Prices in international markets may change frequently. Such changes are due to entry of new competitors, changes in buyers' preferences, changes in import duties and freight rates, fluctuations in exchange rates, etc.

11. Investment for longer period:There is longer time gap between supply of goods and receipt of payment. Therefore, the exporter's capital remains locked up over a longer period.

12. Intense competition:Traders who want to sell goods abroad have to face severe competition from different countries. Considerable market research is necessary to ensure suitability of product in foreign markets. Heavy expenditure on advertising and sales promotion may be necessary.More Problems In International Business

Deficient InfrastructureInadequacy in infrastructure can be another factor that deters business expansion. According to a survey by MIGA 2002, the reliability and quality of infrastructure and utilities was the fourth most important factor in choosing a country location to invest. In general, poor infrastructure will increase overall capital and operating costs for firms for the reason that poor infrastructure increases the uncertainty risk and requires firms to hold higher levels of inventory in order to reduce the risks of production being interrupted.

In some cases, a company has to incorporate its own electricity generators, water filtration units and communication facilities to reimburse the deficiencies of local infrastructure. The access to roads and utility also further increases the company investment cost. McDonald is one of the examples. McDonald as the global fast food giant was having expansion problems in India. Based on an article from India, McDonald as the global fast food giant has 600 stores in China but in contrast it has just 50 outlets in India. The major issue here is the shortage of infrastructure, especially highway roads that link to smaller towns in India.

According to the survey by global consulting major KPMG and Economist Intelligence Unit, 66 percent of the total executives stated that existing transportation infrastructure in India highly increases the operating cost for their company, 62 percent of Indian executives said the existing energy and power supply infrastructure has substantially increased the company operating cost. However, companies can consider joint venture as market entry strategy to reduce the risk. Through joint venture, companies can share the financial risk, secure access to resources, gain local management knowledge and obtain access to market or distribution.

Policy barriers

Macroeconomicpolicies are another problem that deter foreign firm from entering amarket, increase cost and increase thebusiness risksthat foreign firm have to deal. The majormacroeconomicpolicies that could deter a business expansion are: (a) Fiscal policies: the stability of fiscal policy can influence the level and growth of tax revenues which directly influence the trade taxes and corporate revenue tax. (b)Monetary policies: the control ofmoneysupply by centralbankcan influence domestic interest and inflation rates, and indirectly on the stability of domestic currency values. (c) Debt management policies: the government internal and external debt and comfort levels for repaying loans. High debt country tends to repay public debt by printing domestic currency and caused inflation and deprecation of currency.

In short, badmacroeconomicpolicies management will cause economic instability and increase the risk of future taxation, currency risk and currency convertibility risk which affects company profits. Euro Disney is one of the examples to illustrate the problem. The financial plans for Euro Disneyland first year operation anticipated total revenues of FF 5,482 million and a net profit after taxation of FF 204 million. However, in reality they didn't meet the plans. European recession caused Euro Disney to fall into serious financial problem. In November 1992 the management announced a loss of FF 188 million. The second year was even worse; they faced a loss of FF 5,337 million whereas total turnover was FF 5,725 million due to the failure of unforeseen European recession.

Managing global business is equal to managing the complexity; decision that made on today may be not appropriate tomorrow. Thus, it is important to gather all information to create a basis for plan decision making. All plans include uncertainty and risk because the nature of future planning requires estimation.

Technology

Technology is the key to provide businesses with the competitive edge that can lead to greater profitability and growth. Indeed, technological factors can lower the barrier to entry and reduce the minimum efficient production levels, reduce capital costs and labor costs, and influence outsourcing decisions.

For instance, although outsourcing can help companies to influence the latest and the most sophisticated workflow technologies, International Business Machines Corporation (IBM), the world's largest supplier of technology services had failed due to increase labor. IBM set up global centers for tasks like software development and maintenance and employing 53,000 workers in India, and employing 200,000 people worldwide in its services business with spending on $11.8 billion on 54 acquisitions (36 software and 18 services companies). This growth means that they had to add more people, the IBM's business is in trouble for its labor represents 70 to 80 percent of the cost in traditional technology service contracts, and the traditional work of maintaining and updating software and data centers for corporate customers is still a large part of IBM.'s services business.

In order to avoid such pitfalls in outsourcing, a company like IBM can integrate the business strategy that focus on the technological advances to substitute software automation for its labor force. This case of IBM illustrates that the key strategy for multinational companies in expanding business overseas is to use global teams to take advantage of greater performance to create competitive edge as well as continually investing in R&D activities in growth opportunities to ensure to compete on the basis of innovation and technology.

Entry Strategies

When entering a foreignmarket, a company must decide on the appropriate entry strategy and ownership forms; while at the same time considering the legal structure, the amount of capital, resources invested, and managerial involvement required in the host country. The management of joint ventures, for instance, is one of the key entry strategies a company can consider when expanding business overseas.

International Business Machines Corporation (IBM), developers and manufacturers of information technology products and services worldwide, though underestimated the costs associated with the joint ventures that recently formed with PC maker Lenovo resulting reduction in its profit margins. Having manufactured an IBM's product in its entirety, Lenovo was privy to an IBM's intellectual property, and thus enabling to build its own brand expanded also designing and engineering custom electronic components and forge its own relationships with retailers and distributors including those of the IBM.

From this case, selecting the appropriate entry strategies are the key factor in the success under different circumstances. IBM found itself facing not only more dangerous vendors, Lenovo, but also a new competitor that once underestimated. Multinational corporations and their manufacturing partners in foreignmarketneed to rethink how they manage their relationships with each other. For companies like IBM and the other multinational companies, partnership problems are one of the leading causes of joint ventures failure. To avoid such pitfall, a company should focus on investing in the personal relationships that must be built to create a successful joint venture and commit the necessary time and effort, even thought the tangible inputs of the decision such as legal function of the structure, the financial considerations of ownership,the marketanalysis, and end result and desired outcome are all critical concerns.

THE INTERNATIONAL MARKETING MIXWhen launching a product into foreign markets firms can use a standard marketing mix or adapt the marketing mix, to suit the country they are carrying out their business activities in. This article talks you through each element of the marketing mix and the arguments for and against adapting it suit each foreign market.International Marketing Mix: ProductBasic marketing concepts tell us that we will sell more of a product if we aim to meet the needs of our target market. In international markets this will involve taking into consideration a number of different factors including consumer's cultural backgrounds, religion, buying habits and levels of personal disposable income. In many circumstances a company will have to adapt their product and marketing mix strategy to meet local "needs and wants" that cannot be changed. Mcdonald is a global player however, their burgers are adapted to local needs. In India where a cow is a sacred animal their burgers contain chicken or fish instead of beef. In Mexico McDonalds burgers come with chilli sauce. Coca-cola is some parts of the world taste sweeter than in other places.

The arguments for standardisation state that the process of adapting the product to local markets does little more than add to the overall cost of producing the product and weakens the brand on the global scale. In todays global world, where consumers travel more, watch satellite television, communicate and shop internationally over the internet, the world is a smaller than it used to be. Because of this there is no need to adapt products to local markets. Brands such as MTV, Nike, Levis are all successful global brands where they have a standardised approach to their marketing mix, all these products are targeted at similar groups globally.

As you can see both strategies; using a standard product and an customised product can work just as well. The right approach for each organisation will depend on their product, strength of the brand and the foreign market that the marketing is aimed at.

International Marketing Mix: PromotionAs with international product decisions an organisation can either adapt or standardise their promotional strategy and message. Advertising messages in countries may have to be adapted because of language, political climate, cultural attitudes and religious practices. For example a promotional strategy in one country could cause offence in another. Every aspect of promotional detail will require research and planning one example is the use of colour; red is lucky in China and worm by brides in India, whilst white is worn by mourners in india and China and brides in the United Kingdom. Many organisation adapt promotion strategies to suit local markets as cultural backgrounds and practices affect what appeals to consumers.

The level of media development and availability will also need to be taken into account. Is commercial television well established in your host country? What is the level of television penetration? How much control does the government have over advertising on TV, radio and Internet? Is print media more popular than TV?

Before designing promotional activity for a foreign market it would be expedient to complete aPESTanalysis so that you have a complete understanding of the factors operating in the foreign market you would like to enter.International Marketing Mix: PricingPricing on an international scale is a complex task. As well as taking into account traditional price considerations such as fixed and variable costs, competition and target groups(click here for further information about marketing mix pricing)an organisation needs to consider additional factor such as

the cost of transporttariffs or import dutiesexchange rate fluctuationspersonal disposal incomes of the target marketthe currency they want to be paid in andthe general economic situation of the country and how this will influence pricing.

The internet has created further challenges as customers can view global prices and purchase items from around the world. This has increased the level of competition and with it pricing pressures, as global competitors may have lower operating costs.

International Marketing Mix: Place

ThePlaceelement of the marketing mix is about distributing a product or service to the customer, at the right place and at the right time. Distribution in national markets such as the United Kingdom will probably involve goods being moved in a chain from the manufacturer to wholesalers and onto retailers for consumers to buy from. In an overseas market there will be more parties involved because the goods need to be moved around a foreign market where business practices will be different to national markets. For example in Japan there are approximately five different types of wholesaler involved in the distribution chain. Businesses will need to investigate distribution chains for each country they would like to operate in. They will also need to investigate who they would like to sell their products and services to businesses, retailers, wholesaler or directly to consumers. The distribution strategy for each country a business operates in could be different due to profit margins and transportation costs.

Conclusion

Prior to designing an international marketing mix a business should carry out aPESTanalysis for every country they would like to operate in. This will help them determine what elements of the marketing mix can be standardised and which elements will need adjustments to suit local needs. It may well be that a business is able to use a standard marketing mix in the majority of cases and only need to adjust it on the rare occasion. Or every country may need its own marketing mix.

List of Shipping Companies in India

S.No.NameBusinessCountryPort (city)

1Hede NavigationOwner, ManagerIndiaMumbai

2Poompuhar ShippingOwner, ManagerIndiaChennai

3GarwareOffshore ServicesLtdOwner, ManagerIndiaMumbai

4VarunShipping CoLtdOwner, ManagerIndiaMumbai

5TolaniShipping CoLtdOwner, ManagerIndiaMumbai

6Apeejay Shipping LtdOwner, ManagerIndiaKolkata

7Essar Shipping PortsOwner, ManagerIndiaMumbai

8Oil & Natural Gas Corp LtdOwner, ManagerIndiaMumbai

9Visakhapatnam PortOwner, ManagerIndiaVisakhapatnam

10Chowgule Steamships LtdOwner, ManagerIndiaGoa

11Dempo Steamships LtdOwner, ManagerIndiaMumbai

12India SteamshipOwner, ManagerIndiaKolkata

13Great EasternShipping CoLtdOwner, ManagerIndiaMumbai

14Five StarMarine ServicesMarine EquipmentIndiaMumbai

15LBS CAMSAROtherIndiaMumbai

16Indian Register Shpg (Ho)Maritime OrganisationIndiaMumbai

17Nageswaran, NarichaniaP&I, Insurance, LowIndiaChennai

18Hiralal & CoP&I, Insurance, LowIndiaGoa

19Hiralal & Co (Shipping)P&I, Insurance, LowIndiaMangalore

20Loss Prevention AssociationP&I, Insurance, LowIndiaMumbai

21ICICI Bank - Infotech Svcs LtdOtherIndiaMumbai

22Dhiraj OffshoreSurveyorsConsultants, SurveyorsIndiaMumbai

23Richards Hogg Lindley - IndiaP&I, Insurance, LowIndiaMumbai

24Sharma, K & AssociatesConsultants,SurveyorsIndiaMumbai

25Garden Reach Shipbuilder & EngShipbuilder,RepairerIndiaKolkata

26Mumbai Port TrustPort AuthorityIndiaMumbai

27Chennai Port TrustOwner, ManagerIndiaChennai

28Beeline Shipping LtdShip BrokerIndiaMumbai

29V Ships MumbaiOwner, ManagerIndiaMumbai

30Cochin Shipyard LtdShipbuilder,RepairerIndiaCochin

31Hooghly Dock & Port EngShipbuilder,RepairerIndiaKolkata

32Narichania & NarichaniaP&I, Insurance, LowIndiaMumbai

33Hindustan Shipyard LtdPort ServiceIndiaVisakhapatnam

34United India Insurance CoP&I, Insurance, LowIndiaChennai

35Shalimar WorksShipbuilder,RepairerIndia

36Maritime Training InstituteOtherIndiaMumbai

37Anandisher Seafreight CoConsultants,SurveyorsIndiaNew Delhi

38Berry Interoceanic CoConsultants,SurveyorsIndiaNew Delhi

39Zaiwalla Solicitors - MumbaiP&I, Insurance, LowIndiaMumbai

40Indian Register - KolkataMaritime OrganisationIndiaKolkata

41Indian Register - CochinMaritime OrganisationIndiaCochin

42Indian Register - GoaMaritime OrganisationIndiaGoa

43Indian Register - GandhidhamMaritime OrganisationIndiaGandhidham

44Indian Register - ChennaiMaritime OrganisationIndiaChennai

45Adsteam Agency (India) LtdOwner, ManagerIndiaMumbai

46WestfaliaSeparator IndiaMarine EquipmentIndiaNew Delhi

47Univan Ship Mgnt - MumbaiShipbuilder,RepairerIndiaMumbai

48Chowgule & Co Pvt LtdShipbuilder,RepairerIndiaGoa

49SEAMEC LtdOwner, ManagerIndiaMumbai

50Seaworld Shipping & LogisticsOwner, ManagerIndiaMumbai

51Bharati Shipyard LtdShipbuilder,RepairerIndiaMumbai

52Kolkata Port TrustPort AuthorityIndiaKolkata

53Central Inland Water TranShipbuilder,RepairerIndiaKolkata

54Scindia Steam NavShipbuilder,RepairerIndia

55Varun Shipping - N DelhiOwner, ManagerIndiaNew Delhi

56TridentMarine ServicesShipbuilder,RepairerIndiaMumbai

57Nippon Kaiji Kyokai - MumbaiMaritime OrganisationIndiaMumbai

58International Maritime Inst-InOtherIndiaNew Delhi

59Vanson Industrial CorpnMarine EquipmentIndiaMumbai

60Baxi & Co, J M - PorbandarPort AgentIndiaPorbandar

61Trisul Shipping & TradingOwner, ManagerIndiaKolkata

62JaisuShipping CoPvt LtdOwner, ManagerIndiaKandla

63Marine Mgmt Services Pvt LtdOwner, ManagerIndiaMumbai

64Shaan Marine Svcs Pvt LtdShip BrokerIndiaMumbai

65New Mangalore Port TrustPort AuthorityIndiaMangalore

66Arico MarineMarine EquipmentIndiaMumbai

67Dredging Corp India LtdOwner, ManagerIndiaVisakhapatnam

68SGS India Pvt LtdConsultants,SurveyorsIndiaMumbai

69Mazagon DockOwner, ManagerIndiaMumbai

70Indian Register - BangaloreMaritime OrganisationIndiaBangalore

71Indian Register - PuneMaritime OrganisationIndiaPune

72Indian Register - DelhiMaritime OrganisationIndiaNew Delhi

73Lloyd's Register - MumbaiMaritime OrganisationIndiaMumbai

74Lloyd's Register - KolkataMaritime OrganisationIndiaKolkata

75Lloyd's Register - HyderabadMaritime OrganisationIndiaHyderabad

76Lloyd's Register - New DelhiMaritime OrganisationIndiaNew Delhi

77Lloyd's Register-VisakhapatnamMaritime OrganisationIndiaVisakhapatnam

78Pondicherry Port AuthorityPort AuthorityIndiaPondicherry

79Gujarat Maritime - PorbandarPort AuthorityIndiaPorbandar

80Sahi Oretrans Pvt LtdOwner, ManagerIndiaMumbai

81Likhari & AssociatesConsultants,SurveyorsIndiaMumbai

82Chowgule Brothers - KakinadaPort AgentIndiaKakinada

83ABS Pacific - VisakhapatnamMaritime OrganisationIndiaVisakhapatnam

84ABS Pacific - Mormugao GoaMaritime OrganisationIndiaGoa

85ABS Pacific - ChennaiMaritime OrganisationIndiaChennai

86ABS Pacific - CochinMaritime OrganisationIndiaCochin

87ABS Pacific - KolkataMaritime OrganisationIndiaKolkata

88ABS Pacific - MumbaiMaritime OrganisationIndiaFort Mumbai

89Baxi & Co, J M - TuticorinPort AgentIndiaTuticorin

90Sical Logistics LtdOwner, ManagerIndiaChennai

91ABG Shipyard LtdShipbuilder,RepairerIndiaMumbai

92Accord Ship Management Pvt LtdOwner, ManagerIndiaMumbai

93Paradip Port TrustPort AuthorityIndiaParadip

94Indian National ShipownersMaritime OrganisationIndiaMumbai

95Garden Reach Shipbuilders LtdMarine EquipmentIndiaRanchi

96Hindustan Brown BoveriMarine EquipmentIndiaNew Delhi

97CILT IndiaMaritime OrganisationIndiaNew Delhi

98Arcadia Shipping LtdOwner, ManagerIndiaMumbai

99IHC Holland - IndiaMarine EquipmentIndiaNew Delhi

100Rochem (India) Pvt LtdMarine EquipmentIndiaMumbai

101Ocean SpanShipping CoShipbuilder,RepairerIndiaMumbai

102Vacman SanitationMarine EquipmentIndiaNavi Mumbai

103Indian Register - MumbaiMaritime OrganisationIndiaMumbai

104Mormugao Port TrustOwner, ManagerIndiaGoa

105Allepey Port AuthorityPort AuthorityIndiaAllepey

106Gujarat Maritime BoardPort AuthorityIndiaBhavnagar

107Baxi & Co, J M - VeravalPort AgentIndiaVeraval

108Velji P & Sons - JamnagarPort ServiceIndiaJamnagar

109Roy & Chatterjee Pvt LtdPort AgentIndiaVisakhapatnam

110Nagapattinam Port AuthorityPort AuthorityIndiaNagapattinam

111Cochin Port TrustPort AuthorityIndiaCochin

112Kundapur Port AuthorityPort AuthorityIndiaGangolli

113Chennai Port TrustPort AuthorityIndiaChennai

114Malpe Port AuthorityPort AuthorityIndiaMalpe

115Redi Port AuthorityPort AuthorityIndiaMumbai

116Hiralal & CoPort AgentIndiaGoa

117Visakhapatnam Port TrustPort AuthorityIndiaVisakhapatnam

118Chowgule Brothers - MumbaiPort AgentIndiaMumbai

119SCIOwner, ManagerIndiaMumbai

120Machilipatnam Port AuthorityPort AuthorityIndiaMachilipatnam

121Trivandrum Port AuthorityPort AuthorityIndiaTrivandrum

122Haldia Port AuthorityPort AuthorityIndiaHaldia

123International Clearing/ShippinPort AgentIndiaParadip

124Aspinwall & CoPort AgentIndiaTuticorin

125Tuticorin Port TrustPort AuthorityIndiaTuticorin

126Belekeri Port AuthorityPort AuthorityIndiaKarwar

127Bheemunipatnam Port AuthorityPort AuthorityIndiaBheemunipatnam

128Calicut Port AuthorityPort AuthorityIndiaCalicut

129Calingapatnam Port AuthorityPort AuthorityIndiaCalingapatnam

130Chowgule Brothers - JamnagarPort AgentIndiaJamnagar

131Chowgule Brothers - CochinPort AgentIndiaCochin

132Chowgule Brothers - GandhidhamPort AgentIndiaGandhidham

133Chowgule Brothers - RatnagiriPort AgentIndiaRatnagiri

134Chowgule Brothers - ChennaiPort AgentIndiaChennai

135Cuddalore Port AuthorityPort AuthorityIndiaCuddalore

136Tadri Port AuthorityPort AuthorityIndiaTadri

137Neendakara Port AuthorityPort AuthorityIndiaTrivandrum

138Honavar Port AuthorityPort AuthorityIndiaHonavar

139Indian Oil Corp LtdBunkererIndiaMangalore

140Baxi & Co, J M - PondicherryPort AgentIndiaPondicherry

141Baxi & Co, J M - VisakhapatnamPort AgentIndiaVisakhapatnam

142Baxi & Co, J M - NavlakhiPort AgentIndiaMorvi

143Jafarabad Port AuthorityPort AuthorityIndiaAmreli

144Jakhau Port AuthorityPort AuthorityIndiaMandvi

145Kakinada Seaports Pvt LtdPort AuthorityIndiaKakinada

146Kandla Port TrustPort AuthorityIndiaKandla

147Kandla Port (Jamnagar)Port AuthorityIndiaJamnagar

148Karwar Port OfficePort AuthorityIndiaKarwar

149Gujarat Maritime BoardPort AuthorityIndiaMandvi

150Mundra PortPort AuthorityIndiaMundra

151Gujarat Maritime BoardPort AuthorityIndiaMorbi

152Panaji Port AuthorityPort AuthorityIndiaGoa

153Gujarat Maritime BoardPort AuthorityIndiaGandhinagar

154Gujarat Pipavav Port LtdPort AuthorityIndiaAmreli

155Bedi Bunder Port AuthorityPort AuthorityIndiaBedi Bunder

156Vengurla Port AuthorityPort AuthorityIndiaVengurla

157Gujarat Maritime BoardPort AuthorityIndiaVeraval

158Tata Tea LtdPort AuthorityIndiaKolkata

159Gujarat Maritime BoardPort AuthorityIndiaOkha

160Maharashtra Maritime BoardPort AuthorityIndiaRatnagiri

161Bedi Groups of PortsPort AuthorityIndiaJamnagar

162Gujarat Maritime BoardPort AuthorityIndiaJamnagar

163SAI Shipping Co Pvt LtdOwner, ManagerIndiaMumbai

164Confidence Shipping LtdOwner, ManagerIndiaMumbai

165Sesa Goa LtdOwner, ManagerIndiaGoa

166Mercator Ship ManagementOwner, ManagerIndiaMumbai

167Dolphin Offshore EnterpriseOwner, ManagerIndiaMumbai

168MAN B&W Diesel AS - MumbaiPort ServiceIndiaMumbai

169Goa Shipyard LtdShipbuilder, RepairerIndiaGoa

170India Govt NavyOwner, ManagerIndiaDelhi

171Jawaharlal Nehru Port TstPort AuthorityIndiaMumbai

172Sanmar Shipping LtdOwner, ManagerIndiaChennai

173Krishna Rao, EMarine EquipmentIndiaVisakhapatnam

174Geonics (Asia) Pty LtdMarine EquipmentIndiaNavi Mumbai

175Electronics MarineMarine EquipmentIndiaChennai

176Marine & Electrical SvcsMarine EquipmentIndiaVisakhapatnam

177ICS - Kolkata BranchPort AgentIndiaKolkata

178Entek Ird - IndiaMarine EquipmentIndiaMumbai

179Reliance Industries LtdOwner, ManagerIndiaMumbai

180PS Lulla & CoMarine EquipmentIndiaMumbai

181Asia Maritime ServicesOwner, ManagerIndiaMumbai

182Det Norske - MumbaiMaritime OrganisationIndiaMumbai

183Crowe Boda & Co Pvt LtdP&I, Insurance, LowIndiaMumbai

184Echkay Consultancy SvcsShipbuilder, RepairerIndiaKartar Bhavan

185J B Boda & Co Pvt LtdP&I, Insurance, LowIndiaMumbai

186TCI Seaways LtdOwner, ManagerIndiaGurgaon

187Gal OffshoreOwner, ManagerIndiaMumbai

188Ambuja Cements LtdOwner, ManagerIndiaMumbai

189India GovtOwner, ManagerIndiaDelhi

190Triveni Shipping ServicesPort AgentIndiaPorbandar

191Triveni Shipping ServicesPort ServiceIndiaBhavnagar

192Gulf Agency - CochinPort AgentIndiaCochin

193Gulf Agency - ChennaiPort AgentIndiaChennai

194Gulf Agency - MumbaiPort AgentIndiaMumbai

195Dolphin Offshore EnterprisesShipbuilder, RepairerIndiaMumbai

196Shipping Corp India (Off)Towage, SalvageIndiaMumbai

197Ispat Industries LtdOwner, ManagerIndiaMumbai

198Harrisons Malayalam LtdPort AgentIndiaCochin

199Everett (India) Pvt LtdPort AgentIndiaKolkata

200Sri Ganesh Shpg AgencyPort AgentIndiaMangalore

Example of International marketing using the 7 PsMc DonaldPRODUCT:Mc Donalds product portfolio primarily comprises of vegetarian and non-vegetarian burgers. Thevegetarian burgers like Veg surprise, salad sandwich, Mc Aloo Tikki Burger, Mc veggie burgerare offered to the customers. Non-vegetatarian burgers include Chicken Mc grill, Mc chickenburger, Fliet of fish and chicken maharaja burger. Along with these french-fries, veg pizza mcpuff, wrap chicken Mexican, wrap paneer salsa, potato wedges, soft serve pineapple and choclateice creams, Mc swirl soft drinks, coffee and Mc shakes are also offered to increase the variety inthe product portfolio.Mc Donalds alsoprovides meancombos with medium fries andmediumsoft drink, happy mean with small soft drink, econo meals with small soft drink and value mealswith potato wedges and small soft drink.PRICE:Mc Donalds vegetarian burgers are priced between Rs 20 and Rs 48. Wrap paneer salsa is pricedat Rs 45-50. The non vegetarian burgers are priced between Rs 30 and Rs 60. Wrap chickenMexican is priced at Rs 55. Medium French fries are priced at Rs 28, potato wedges at Rs 20,soft serves at Rs 35, mc swirl at Rs 12,medium soft drinks at Rs 20 andmedium shakes at Rs 45.PROMOTION:At Mc Donalds the prime focus is on targeting children. In happy meals too which are targeted atchildren small toys are given along with the meal. Apart from this, various schemes for winningprices by way of lucky draws and also scratch cards are given when an order is placed on thevarious mean combos. In fact, the various econo meals and value meals also signal to thecustomer that buying separate items results in greater value for money for thecustomer.

PLACE:Mc Donals outlets are very evenly spread throughout the NCR region. Mc Donalds does notoffer home delivery but its outlets are very readily accessible. Mc Donalds also offers take awaydrive through facilities.PEOPLE:The employees in Mc Donalds have a standard uniform and Mc Donalds specially focuses onfriendly and prompt service to its customers from their employees.PROCESS:The food manufacturing process at Mc Donalds is completely transparent i.e. the whole processis visible to the customers. In fact, the fast food joint allows its customers to view and judge thehygienic standards at Mc Donalds by allowing them to enter the area where the process takesplace. The customers are invited to check the ingredients used in food.PHYSICAL EVIDENCE:Mc Donalds focuses on clean and hygienic interiors of is outlets and at the same time theinteriors are attractive and the fast food joint maintains a proper decorum at its jointCoca Cola

Coca-Cola is one of the most widely used soft drink in the world. The company has very efficient and extensive distribution system in the world. There is a great variety of brands offered by Coca-cola throughout the world like Diet coke, sprite, Fanta, Rc cola, Minute made etc. you can find the Coca-cola soft drinks anywhere in every country of the world.

The 'Coca-Cola' brand has been adopted the strategy of global marketing. They are considering the whole world as single market place and uniform marketing strategy was being used Coca-cola for many years, but now the trend is changing and different marketing campaigns are being designed for different regions of the world. . Business decisions are made on a domestic basis to fit in with the culture and needs of the domestic community. In 1919 Coca-Cola decided it was time to go global. The Coca-Cola Company decided to take its operations beyond national boundaries and marketing research was started in central America, china and many other countries of the world. Because of successful and efficient marketing research Coca-cola was able to produce globally in different regions of the world.

Coca-cola has got such an intensive distribution and bottlers system that its products are available everywhere in the world, starting from Middle East to Australia. You can find coca cola product on every retail outlet

There are many reasons why company decided to sell its product in international market. The prospect exists to sell 'Coca-Cola' worldwide, because 'Coca-Cola' is a product which can be used by everyone irrespective of age and gender, all over the world. Marketing globally demand the company to have a marketing team in line with a country's consumers so effective sales can be made and good relations with the abroad key employees can be maintained.

If we look on advertising perspective of Coca-cola, advertising has created a demand for 'Coca-Cola' worldwide. However, advertising has to be in line with the domestic culture. An adapted marketing mix means adjusting the mix with the prevailing culture, geographic, economic and other differences in different countries. Different languages and cultures caused problems.

In addition, according to Bettman, et. al, Coca-Colas bottling system is one of their greatest strengths. It permits them to do their business on a global scale while at the same time maintain a national approach. The bottling companies are domestically owned and operated by independent business people who are authorized to sell products of the Coca-Cola Company. Because Coke does not have complete ownership of its bottling network, its main source of revenue is the sale of concentrate to its bottlers (Bettman, et. al, 1998).

.Brand image is the significant factor affecting Cokes sale. Coca-Colas brand name is very well known all over the world. Packaging changes have also affected sales and industry positioning, but in general, the public has tended not to be affected by new products. Coca-Colas bottling system also allows the company to take advantage of infinite growth opportunities around the world. This strategy gives Coke the opportunity to service a large geographic, diverse, area. (Arthur A. Thompson Jr., A. J, 2005)

Now there is the threat of new vital competitors in the carbonated soft drink industry is not very extensive. The threat of substitutes, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juices, milk, and hot chocolate.

Even though Coca-Cola and Pepsi control nearly 40% of the entire beverage market, the changing health-awareness of the market could have a serious affect. Of course, both Coke and Pepsi have already diversified into these markets, allowing them to have further significant market shares.

The increasing health consciousness and emphasis of healthy lifestyle not only in developed nations, but also in developing nations, have slowed down the sales of Coca-Colas carbonated soft drinks. In response to this health consciousness issue, the company introduced Diet Coke in 1982. Such change of consumer life style had also led to the introduction of its bottled purified water. (Murden, Terry, 2005)

Coca-Colas brand personality reflects the positioning of its brand. The process of positioning a brand or product is a complex managerial task and must be done over time using all the elements of the marketing mix. Positioning is in the mind of the consumer and can be described as how the product is considered by that consumer. When researching the positioning of a product, consumers are often asked how they would describe that product if it were a person. The purpose of this is to develop a character statement. This can ensure that consumers have a clear view of the brand values that make up the brand personality, just like the values and beliefs that make up a person. Many people see Coca-Cola as a part of their daily life. This similarity between the brand and the consumer leads to a high degree of loyalty and makes the purchasing decision easier.

It is of a lot importance to create the right brand image that closely in lines with the consumers life experiences and feelings. Sponsorship is one way of building these associations (Arthur A. Thompson Jr., A. J, 2005). Through events such as Coca-Colas Form and Fusion Design Awards and sporting events a brand manager can ensure that its product image is made relevant to the target audience. An element of the marketing mix that involves making aware the customers. The promotional mix will often include sales promotion, advertising, direct selling and public relations elements

The progress and advancement in the field of technology in the fields of soft drink raw material, production, manufacturing, information and communication technology and logistics have great positive impacts on the operations and sales of Coca-Cola. The availability of new soft drink ingredients enables Coca-Cola to introduce new variety of its products to its existing consumers, not forgetting to attract the new consumer groups. The use of the latest information technology has made able the company to attract the new generation of soft drink consumers with the latest features of song downloading. Also the existence of company website has enabled the world to be in touch with the latest progress, promotions and offers of Coca-Cola.

There are many Problems in International Business. The restraining forces slow down the progress of companies that take up International Business. The restraining forces are :

1. First Main Problem in International Business is Culture : The culture of the nation and the companies should have international vision. The long term perspective of companies should be to move wherever market opportunities are good. The inward looking culture makes companies to remain local.

2. Another main problem in International Business isMarket Competition in Host Country : If best global companies enter the markets, the competition goes intense and accordingly inefficient companies have to close their shops.

3. Another main problem in International Business isCosts : The competition calls for marketing quality products at competitive prices. If prices are high the market rejects the products.

4. One of the main problem in International Business isNational Controls : The nation build barriers for outside country manufacturers by increasing trade barriers. Trade barriers will be direct by way of high customs duties. Indirect barriers will be licensing procedures, quota system , inspection, certification and tedious paper work.

5. Another main problem in International Business isNationalization:Due to Ideological differences some nations do not trade with nations of their dislike.

6. Another main problem in International Business isWar and Terrorism : The political uncertainties and war like situation are blockages to growth of trade.

7. One of the main problem in International Business isShortsightedness of Management : Some management ignores vast business opportunities across national borders. The companies do not wish to go beyond national borders. If a company does not adapt to local conditions it does not survive.

8. One of the main problem in International Business isOrganization History : The companies who are contended and like to remain within a nation.

9. Another main problem in International Business isDomestic Forces : The government or social restrictions imposed on commerce and industry become hurdle in a company going global.

10. One of the main problem in International Business is Conflict within companies and within international organization : Difference of opinion in strategies to be adopted between different management levels in international business. If support is inadequate the international business proposal fails.