Import Export
Importing and Exporting: Financial Plan and Risk Assessment
Promotion Mix
Advertising will consist of distributor-oriented materials and programs for the local market and the sale of the imported coffee, while in the foreign market for the exported cotton the focus will be on specific manufacturers. Quality and price will be important factors for both products and markets, with sales promotions achieved through ongoing competitive efforts and product samples rather than specific promotional periods or programs. This will help to establish long-term and trusted relationships without the potential pitfalls of more complex variations and changes in sales promotions strategies, which is ideal when the selling mode is wholesale rather than retail focused (Ireland et al., 2005).
Letter of Credit as Possible Payment Method
Using letters of credit as the method of payment for both import and export transactions is in keeping with standard practices in international trade, and will provide the greatest amount of security and assurance possible for all parties involved (Ireland et al., 2005). Given the amount of business conducted between the United States and Brazil and the solid relationships between large-scale financial institutions in both countries, obtaining trusted and valid letters of credit for the international trades should not be difficult. For transactions between local buyers/sellers and the local import/export companies in each country, other methods of payment that are more efficient and less complex might be ideal, and would be more in keeping with standard practice (Ireland et al., 2005).
Importer Checklist
The coffee that is being imported as a part of this proposed strategy has been selected as the import product largely for the convenience factor; it is easily available in varying quantities in Brazil, which has already been selected as the target for the exportation of the domestically purchased cotton, and is easily saleable in the United States due to high volumes of consumption (ICO, 2011). As the product is a consumable good, there will also be a constant demand for the imported coffee with...
This means there will be no need to provide support services after wholesaling the coffee to distributors fur further sale before retail sales and eventual consumption by end users.
Competition certainly exists in the coffee market, presenting perhaps the single greatest substantial risk to the proposed importing activities (ICO, 2011). The degree of consumption and the availability of the product in Brazil makes coffee still an ideal product for import as long as effective strategies for reaching distributors can be achieved, possibly through price competition (Ireland et al., 2005). Many large retail coffee brewers and sellers engage in their own import activities, but there are a variety of other retailers that rely on distributors as sales organizations, and competition here is less fierce and less crowded (ICO, 2011). There are no property right issues that the importer will need to contend with.
Exporter Checklist
Soft infrastructure in Brazil is unevenly developed depending on region and socioeconomic status, but this is not expected to interrupt company operations at all (CIA, 2011). Given the relatively low level of agriculture as a percentage of Brazil's GDP, much of which is taken up by coffee itself, it does not appear that any commercial production of cotton occurs in Brazil, but rather it must all be imported; sales will be likely to increase if it is made more available (CIA, 2011). While there are many other textiles that can be used as substitutes to cotton, there are a variety of fashion shows and other trade events that can be used to highlight the use of cotton cloths in addition to the demand that already exists. However as this business is primarily focused on sales to manufacturers, it will primarily be through coordination with other industry operators that such shows can be taken advantage of.
For the manufacturing customers that will be sought for the exporters products, warehousing is kept at a minimum and demand is kept at a…
