International Marketing, Case Study Example

Payment strategies

• Full advance payment
• Letter of credit
• Credit (delayed payment)

Description and choice of the best payment strategy

A full advance payment occurs when the customer makes payments for a product before delivery. It is the best payment method choice for exporters to ensure payment and reduce financial risk. This is because the customer pays the required amount of money before obtaining the product. By the time the customer parts with the cash appertaining the product, there is full satisfaction from both parties. The remaining two options present payment method that come in later after the customer has obtained the products, and even have somehow put them into use. They are very risky approaches that can even lead to payment failure.  If, for example, the product in discussion is a machine, the buyer uses it, and by bad luck, the machine breaks down or spoils. This would bring in controversies where the customer may refuse paying for the machinery with the claim that it is non-original.

Trust and contracts

A contract is a duly signed documentary made between two parties; the buyer and the seller. Breaching rules of the contract is against the law, thus a criminal offence. On the other hand, trust is a very strong believes in someone. When a dealer releases products for shipment, more especially without a pay, he /she believes and trusts in the customer, as it happened in the Yusuf and Garima’s case. If I were in the same position, I could have fallen into the trap of trust to release the goods. The major influence being, it was not the first time they did business together, and in any case, he had been trustworthy all along.

The heads of export need be very careful. It just happens that some customers play safe to win the trust of the buyer. Business trust is a game of the witty, where the winner smiles as the looser mourns a loss.