8 I International trade

~ issuesin salesmistakes 8.1 About business

- _.... - _- .. -
~-..". -
a~d-payment
~E~-p_O~·:;al~s
~ credit agenciesand
insurance Discussion
D How can selling your product in other countries be more difficult than at home? With a
partner, list four aspects of export sales where there may not be a level playing field.
Internet h
researc Scan reading
FIuctuations in the
exchange rate between o Read the article opposite from a trade magazine. Which four export mistakes did
currencies can be an Eisenhart Games make?
important issue in
exporting. Search for
Reading for detail
the keywords Big Mac
Index to find out a fun D Read the article again. Which eight lessons does Vincenti say exporters have to learn?
way of measuring these.
Listening for detail
D ~ 2:50 Listen to an interview with James Sullivan, a sales manager with Nehling and
Hynes, an American credit agency, and answer the questions.
1 Which two kinds of service do credit agencies provide?
2 How large is Nehling and Hynes' database, and why is this important?
3 How are credit ratings useful?
4 What proportion of European and US firms purchase credit insurance?
5 Which advantage does credit insurance give Daryl Vincenti in Saudi Arabia?
6 On average, how much does international credit insurance cost?

Reading for detail

1:1 Read thisextract from a guide to methods of payment in international trade. Put the
methods in order from the safest (1) to the riskiest (4) from the exporter's point of view.

o Open account
Goodsareshippeddirectlyto the buyer,with a requestfor payment.
o Advance payment
Paymentis expectedby the exporter,in full, beforegoodsareshipped.
o Bills for collection
A bill of exchangeissentfrom the exporter'sbankto the buyer'sbank.Whenthe buyeragrees
to payon a certaindate,they signthe draft. Thedocumentsand goodsarereleasedto the
buyeragainstthis acceptance.
o Letters of credit (LlCs),also known as documentary credits (DCs)
Documentarycreditisa bank-to-bankcommitmentof payment:the buyer'sbankguarantees
that paymentwill be madewhen the shippingdocumentsarefound to be in compliancewith
termsset by the buyer.

Discussion
D As the exporter, decide what methods of payment in Exercise 5 you would require
from these customers.
1 The buyer is a well-known company in a large country in western Europe. This is a first
order but you hope the buyer will become a regular customer.
2 The buyer is in a country where currency exchange is controlled by the government.
Glossary PAGE 157 Requests for foreign currency payments must be justified by supporting documents.
3 The buyer is a new customer in a country with a fragile economy and a poor credit rating.
chase 4 The buyer is a large North American company with a reputation for slow payment.
creditworthiness 5 The buyer is one of your suppliers in a neighbouring country.
level playing field 6 The buyer represents a small company in a developing country and is a personal friend.
take on board
think outside the box o You and a friend design and sell your own line of T-shirts at rock concerts. You have
without a trace been very successful in your own country, and now several contacts in other countries
wizard have expressed interest in your product. What problems do you anticipate if you start to
export, and what solutions can you suggest?

100 j he Business 2.0

 learns from
mistakes
AT CHICAGO-BASED EISENHART GAMES, Daryl Vincenti is known
as the 'export wizard'. Over the last three years, the pinball machine
manufacturer has developed a profitable new market in tile Middle
East.'Times are hard for pinball in the US: saysVincenti. 'Competition
5 from video games and computers has hit small manufacturers like
us really hard, so we have to find new markets: Eisenhart now has
some 35%of a growing Middle East market, but it hasn't been easy.
'We made a lot of mistakes at the beginning: confessesVincenti, 'but
we learned fast. We're now starting to work in S EAsia, and things are
10 much easier becausewe've taken important lessons on board in the

Middle East:
Vincenti puts using a good credit agency at the top of his lessons
learned list. 'When you've invested time, effort and money in making
an export sale, you want to get paid! After wasting a lot of time
'5 chasing payments, a friend introduced me to Nehling and Hynes.We
learned that by using a credit agency to checkout your customer's
creditworthiness and to insure against non-payment, you can make
export virtually risk-free:
Other lessons learned centred on adaptability. 'Be flexible: you have
20 to learn to think outside the box: saysVincenti. 'And don't assume that

what works well in your domestic market will automatically go down

well in another.You should also be prepared to modify your product
specifications to meet local conditions, and to focus on different
aspects of the marketing mix. In the Middle East,for example, price is
25 not everything. We started out trying to sellon price: we soon learned

that over there, image, quality and service are all more important:
Vincenti also stressesthat would-be exporters should make a firm
commitment to export, but focus on one market, rather than trying to
sell allover the world. 'You don't succeedin export markets by giving
30 them a couple of hours a week when things are slow at home.You

have to put in a lot of time, get out there and meet your customers,
and manage your local distributors proactively - if you don't, it's
"game over': Eisenhart learned the hard way when they signed an
exclusive deal with an agent in the Gulf; at the end of the first year,
35 sales were zero, and the agent had disappeared without trace.

A final lesson is to remember that appearancescan be deceptive,

warns Vincenti: 'One day we received a 15-word fax in approximate
English from what seemed to be one man and a camel somewhere out
in the desert.We thought it was a joke, but a week later we decided we
.0 should answer it anyway.They're now our biggest customer.'

!7Jt Business 2.0 101

 8 International trade
... collocations for making 8.2 Vocabulary
and processing payments

... credit and insurance

... exports

Collocations
o Complete the collocations for talking about payment by choosing the correct noun in
the box for each group of verbs.

an application a deal an invoice a payment conditions goods

I
I issue provide submit

I settle

query
load

ship
2 vet

approve
3

state negotiate make

meet 4 reach 5 miss 6

comply with sign chase

Decide whether the buyer or the seller carries out the actions above.

Phrasal verbs
o Put the words in these guidelines for exporters in the correct order. Each sentence
contains a phrasal verb.
1 check / customer's / your / on I creditworthiness I up I new
2 doubts I insurance I if / you I take / about / getting I have lout I paid
3 behind I their I customers I do I not I get I payments I with Ilet
4 as I invoices I soon / become I they I chase I as / overdue I up
5 act I getting I your I difficulties I quickly I if I customer I is / into
o Match definitions a-e with the correct phrasal verb from Exercise 2.
a) get something officiallyfrom a specialist organization D
b) moving towards a particular condition or situation D
c) find out information about something or someone discreetly D
d) find out what is being done about something D
e) fail to do something at the right time D
~ .----------------------------------------------------------------------------------------------------------~ ~ ..
102 The Business 2.0
 Listening
Internet
research D 2 51-2'55 Listen to five conversations about export issues. Use verb-noun collocations
from Exercises 1 and 2 to say what is happening in each.
Vhat is a thesaurus
<fndwhen is it useful? 1 A Slovakian company has submitted an application for credit.
~.earchfor the keyword Bruno asks his colleague to on their _
·.,esaurus. Then, in an 2 The company is going to on a shipment.
nline thesaurus, search They need to do this to with the conditions in the contract.
'or the nouns credit,
3 Francesca's boss ask her to up an invoice.
;ash and trade. For each
She doesn't want Kawasaki to get with their payments.
'"'lOun,find synonyms,
ntonyms and common
4 Mr Takahashi the . He asks for more time to pay. The company seems to
ollocations.
be into difficulties.
5 The companies talk about how the goods will be . In the end, they a deal.

Collocations
o How many two-word collocations can you make by combining the words credit, insurance
and customer with the nouns in the box?

card claim credit insurance line loyalty

period policy portfolio sales terms

o Use collocations from Exercise 5 to complete these sentences.

Frequent-flyer schemes, free gifts and credit are all ways of developing _
2 To avoid cash-flow problems, sales teams need to be given a clear _
3 An provides cover in case of an accident.
4 Because old customers leave, a sales person must constantly be looking to add to their _
5 reduces the risk of default on export payments.
6 After the fire, the company filed a for compensation.

Defining words
o With a partner, practise defining words relating to business transactions.
Student A: use the information below.
Student B: turn to page 121.
Give Student B definitions for 1, 2, 4, 6, 7 and 9 across. Student B will give you definitions for 1, 3,
5 and 8 down and 10 and 11 across to help you complete the crossword.

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Glossary PAGE 157
,__
10 file a claim
I I I I I I I I I I - forwarder
frequent-flyer schemes

1" I get behind with

n)(, Business 2.0 103

 8 International trade
.... time expressions with in, 8.3 Grammar Prepositions
on and at
.... ago, last, next, yesterday Prepositions of time
and tomorrow
D With a partner, ask and answer the questions about your country using the
.... dependent prepositions appropriate preposition.
1 When do most people start and finish work?
2 When do students usually do most of their work?
Refresh your 3 When does the New Year begin?
memory 4 When are the school holidays?
in 5 What other times are popular for holidays?
periods 6 When is the best time for tourists to visit?
the morning, July, the 7 What time do people usually eat breakfast, lunch and dinner?
winter, 2007, the 80s 8 When is it impolite to telephone people?
on 9 When are you allowed to make a lot of noise?
days and dates 10 When are salaries usually paid?
Monday, the 17th New 11 How quickly do companies usually pay their bills?
Year's Day 12 When are the sales?
at
times and special times Dependent prepositions
3pm, breakfast, the
weekend, Christmas o Find the verb in each group that does not have the same dependent preposition as the
e other three. Write the preposition in the space provided.
expressions with last,
next, ago, yesterday, against for from to in of on W with for
tomorrow
... Grammar and practice page 136 1 listen @ consent refer (_to_)
2 comply sympathise resort associate (--)
3 pay wait vote object (--)
4 depend rely insist attend (--)
5 result invest borrow succeed (--)
6 suffer emerge hear account (--)
7 discuss apply look apologize (--)
8 consist react approve think (--)
9 listen belong leave relate (--)
10 fight insure protect ask (--)

Listening for gist

D ~ 2:56-2:65 listen to ten short dialogues and use a word from the box to describe
what the people are discussing. Be careful to use the right preposition.

access apologizing aptitude complying damage

dependence hearing insuring investing satisfaction

1 They are discussing property.

2 He is talking about
3 He is lucky that there isn't much
4 They are admiring her
5 They are worrying about their company's
what he said to her.

languages.
his car.

one big firm.

I
6 the American Food and Drug Administration is essential if they
want to sell the product in the States.
7 She is explaining the company policy of non-payment.
8 They are expressing their this year's results.
9 They are worried about not Taiwan.
10 There is as system failure, so they don't have data.

I- 104 TileBu siness 2.0