International Finance
International finance deals with more than individual markets by including managing exposure to exchange rate, and financing international capital marketing and budgeting. Additionally, foreign exchange focuses on aspects such as political risk, legal, cultural, and taxation. Corporate finance relates to the financial activities of a corporation. The goal of corporate finance is to increase the value of the firm to shareholders through implementing plans and strategies to achieve the goals. Strategies include making profitable decision on raising and managing capital, dividend distributions, and acquisitions.
Exchange Rate
The exchange rate is one of the most significant factors of international finance. which assist in creating financial balance. Exchange rates are used to provide information for corporations when undertaking capital budgeting and making financial decision regarding foreign markets. The exchange rate is the currency value as determined by domestic and foreign currency.
Domestic and International Markets
Corporations are called international corporations or multinational if they have significant foreign operations. The principles of corporate finance are applied to international corporations. International corporations seek investments that generate company value and shareholder wealth. To increase the value of a firm, companies take on projects that have a positive NPV. With both international and domestic markets, a positive NPV is paramount for organizational success. Both international and corporate finance focus on generating profitable capital investment decisions related to dividends, leverage, and financing.
Conclusion
The Foreign exchange market is the worlds largest financial market. The difference between international finance and corporate finance is that international finance not only considers domestic rules and regulations, but also considers foreign policies, politics, risk, culture, environmental changes, and government intervention. Consequently, international finance is not just simply “corporate finance with an exchange rate.”
In addition to an exchange rate being the value of one country’s currency transacted into another country’s currency; nearly all currency trading takes place in U.S. dollars, and the rate of exchange changes constantly. The abbreviation used for foreign exchange is FX; currency swaps are considered to be FX swaps. Currency swaps present hedging risk in international trade. For example, if a firm produces in products in one country and then exports to another, the firm is responsible for paying its workers along with its suppliers in its domestic currency. However, the firm may receive revenue in foreign currency. The risk involved with currency exchange rates is that currency changes over time. If the value of foreign currency decreases, the firm loses profits. To protect itself against rising and falling currency, the company can enter a currency swap. A currency swap protects companies by setting fixed terms of revenue exchange over a period of time. In addition to currency swap, there are also the interest rate swaps, and credit default swap.
In addition to the foreign exchange rates, there is the foreign exchange market, which give opportunities and provides information to international organizations when undertaking capital budgeting and making financial decisions. Within the foreign exchange market, countries trade their currency for another country’s currency. Within the market, most trading takes place between the U.S. dollar, the British pound sterling, the Japanese yen, and the euro.
The foreign exchange market is not an actual physical location where participants meet to trade and exchange currency, but instead its participants go to major commercial and investment banks around the world to convert their currency. Additionally, trading can take place over computers, telephones, and through other methods. A popular communication network for foreign transaction is the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which uses data transmission lines to help banks communicate with one another. Foreign exchange participants include importers, exporters, portfolio managers, brokers, traders, and speculators.
As humans, we are greatly influenced by our relationships. We each enjoy being members of loyalty programs and networking groups that align with our goals. We have selected and continue to go to the same supermarkets, gas stations, banks, and purchase from only select companies. This happens because of an unspoken relationship that exists with these businesses and brands. They make us happy, we trust them, and their consistency is calming in a chaotic world.
Relationships are natural, and our preference of who we develop relationships with are often based on past experiences and expectations. Similar to dating relationships, customer and businesses relationships involve courting, falling in love, marriage, honeymoon, and then the questioning of whether the relationship has a future. At that moment of questioning, the relationship either continues down a happy road or ends in divorce or breakup.
Are you successfully developing good relationships with your customers or are you just present? Are they only with you because they are content or do they actually feel that you are the best option for them? If you haven’t gotten a referral in a while, then you may not be pleasing your customer as well as you think. After reading this email, start a new one and write your customer a thank you message. You’ll be surprised how far it goes.
If you’re a professional — whether you’re an entrepreneur or an executive — you need proven, high-level strategies to really make your business grow and it starts with understanding the needs of your customers.
A happy customer is likely to tell their friends and family of the service they received. Creating brand evangelists doesn’t necessarily involve rewarding the customer with free products or services. The best method for building loyalty and creating brand evangelists is by letting the customer know that they are appreciated as a customer and that you enjoy referrals.
Satisfied customers are also likely to spread the word through social media about the service they received from your company without being asked. If they are happy, they will likely tell everyone why they are. Customer satisfaction goes a long way when creating brand evangelists. You can identify a brand evangelist by joining and staying current with social networks and watching for your business name to be mentioned on those networks. Another great opportunity for building evangelists is to get involved with customers online by incorporating widgets into your company website. These widgets can be used to allow for site visitors to communicate their thoughts and share them on their favorite social networking websites with the click of a button.
Definition of crisis management
A crisis management is the way that a person or business handles an emergency. In a family, this could be a member having to suddenly go to the hospital because of an accident. In a business, a crisis can be anything from a defective product recall or an economic change that causes a drop in sales.
How crisis management relates to business
Within the marketing industry, having the ability to understand and react promptly when crisis arises is crucial for maintaining the businesses market share, trust, and reputation. Not managing a crisis properly can have the potential to damage carefully developed equity, and spoil consumers’ quality perception (Chen, Ganesan, & Liu, 2009).
Personal experience with crisis management
As an online marketer, I run into crisis management issues oftentimes on a weekly basis. Each week I monitor my clients websites ranking through analyzing Yahoo, Bing, and Google search engines for algorithm changes. It’s normal for search engines to change their algorithm and I do advise my clients that their website rank may change drastically if such a change occurs that may affect their website. Once this happens, a site that previously ranked on the first page could drop out of the search engine completed. As this occurs, It usually causes a loss in site traffic and sales. The solution to this is for me to research and analyze the issue, check whether it’s a search engine issue or a website issue and then correct or explain to the client that recovery is impossible.
Summary of About the Crisis Marketing and The Crisis of Marketing
This article focuses on the global economic-financial marketing crisis. According to the article, marketing may be just the solution for many companies to get out of the crisis, but what is sadder is that a lot of them do not realize it (Cornelia & Mihaela, 2011). The article tackles the subject of why marketing is needed within a failing economy and how to successfully implement new strategies to help increase and sustain profit and productivity.
Avoiding negative impacts of a crisis
Research has indicated that a proactive strategy may have positive consequences on consumer perception if the crisis is responded to with a constant, active, and firm response (Chen, Ganesan, & Liu, 2009). The business being affected should respond quickly to the crisis and should focus their attention on building and strengthening consumer trust. During a crisis, marketing strategies should be analyzed and focus on resonating emotionally with the consumer through a human, friendly language (Cornelia & Mihaela, 2011). Without proactively managing the crisis, the risk of negative impact rises.
Credits
Cornelia, M., & Mihaela, B. (2011). ABOUT THE CRISIS MARKETING AND THE CRISIS OF MARKETING. Journal Of Academic Research In Economics, 3(3), 311-316.
Chen, Y, Ganesan, S., & Liu, Y. (2009). Does a firm’s product-recall strategy affect its financial value? An examination of strategic alternatives during product-harm crises. Journal of Marketing, 73(6), 214–226.
When done correctly, email marketing serves as a tried-and-true way to get readers to download content, convert prospects with special offers, and upsell existing customers. It’s important to focus your time and attention on email marketing in addition to social media, paid advertising, and search engine optimization. It’s one form of marketing that’s not going anywhere any time soon, and rightfully so.
With emails, you can foster a deeper, one-on-one relationship with your customers. Your emails have the opportunity to appear more personal and authentic than any other marketing effort. This builds trust with your customers considering the message creates (or appears to create) a one-on-one dialogue. Email subscribers are 3.9 times more likely to share content via the social web. Plus, your target audience wants to hear from you via email. It was discovered in a survey conducted by MarketingSherpa that 72% of people actually prefer to receive promotional content through email from businesses they like, as compared to the 17% who prefer social media.[1]
When sending email campaigns, make sure your strategy, and your business, answers questions such as:
Whether optimizing your email or just writing the content, you should always do so as if you were speaking directly to one person in your target audience. Use the same language in your email as you would if your ideal customer were standing in front of you. Speak (or in this case, write) to your one reader as if you already know them. This can be tricky at first, but it will get easier over time as you come to understand more about who your ideal customer is. One easy way to sound more conversational is to use second person pronouns — “you” and “your.” This is a simple adjustment that makes the email about the reader, not your company.
Personalize the Content. In the same way that you personalized your subject line, you should also personalize the content within your email. According to research conducted by Aberdeen Group, personalized emails showed an increase in click-through rates of 14% and an increase in conversions by 10%. To get started with personalization, the simplest thing to do is address your recipients by their first name in your email greeting. Your customers will also appreciate your efforts since 74% of online customers get frustrated with websites when content (e.g., offers, ads, and promotions) appear to have nothing to do with their interests. [2]
[1] http://content.marketingsherpa.com/data/public/reports/benchmark-reports/EXCERPT-BMR-2013-Email-Marketing.pdf
[2] http://www.aberdeen.com/research/4904/ra-email-marketing/content.aspx
Branding involves creating, maintaining, and enhancing the awareness of your product or service. In establishing the credibility and awareness of your brand, third-party endorsements have a tremendous effect. Individual branding is different from business branding in that it requires a continued positive attitude and even stronger relationship building. Unlike business branding, which recommends posting a social ad or banner on a webpage, billboard, or in print collateral, personal branding requires networking— and lots of it. Networking can be done via social networks, local group meetings, and events. In addition, during these networking sessions, the individual needs to be likable and must present good character, knowledge, and a pleasant appearance.
Attitudes toward the message of your brand have an impact on the customer’s purchase and behavioral intentions. To promote your brand, you could invest in advertising, which is a more general means of communication for promoting your brand. Marketing-oriented publicity elicits either positive or negative cognitive responses in customers. A positive cognitive response enhances the brand messaging which has an impact on the customer’s purchasing decision. A negative attitude and cognitive response toward brand messaging reduce the likelihood of a customer making a purchase.
A perfect example of marketing based on customer brand attitude and the use of endorsements is the Beats headphone brand. The brand was introduced without a large budget and focused on building credibility through celebrity endorsements and word-of- mouth. As customers accepted the credibility as positive, they spread the word about the product as being a commodity to those interested in owning the popular brand. With the help of social promotions, celebrity credibility, industry targeted publicity, and brand messaging the brand has developed into a multi-billion dollar company.
— For more lessons like this, purchase your copy of Act Like a Business: Think Like a Customer by Dr. Elijah Clark from all major bookstores. —
When it comes to lowering stress levels and accomplishing tasks within your business, there is the option to insource, selfsource, or outsource specific duties. Insourcing means to use capable individuals within your business to complete appropriate tasks. Selfsourcing is developing and utilizing internal IT systems that can be used by trained workers to complete a wider range of duties. Outsourcing is when you choose to use third-party companies or outside individuals to complete tasks.
Outsourcing is growing at an exceptional rate and businesses use outsourcing services provided by individuals throughout the globe. Outsourcing may be an effective solution that can save time and money by providing resources and capabilities outside of the business’s structure. In addition, outsourcing allows your business to potentially acquire leading-edge technology without purchasing needed software, updating your current systems, or training employees. Outsourcing allows you to focus your resources on the tasks that matter most and are indicative of your core competencies. Other benefits of outsourcing include lowering development costs, hiring the best talent for the job, and realizing a higher quality of work.
Short cycle time systems development involves utilizing methods including automation, outsourcing, and technology to complete tasks quickly. A benefit of this type of structure is that new products and innovation are brought to the marketplace sooner and benefits your business by having a competitive advantage. Concerns with outsourcing short cycle time systems include privacy, security, and potential loss of in-house resources.
The quick reaction of cycle time systems allow the development of new products and services to align with market and environment changes. A disadvantage of producing products or services quickly is that quality may suffer. Furthermore, using outsourced individuals could also present legal issues, financial setbacks, and provide limited control over outcomes. To try and mitigate the damages of outsourcing, you should use service level agreement (SLA) contracts with your vendors which ensure (with penalties) that you receive the desired performance and that expectations are met. Another disadvantage of outsourcing includes cultural differences. Outsourcing is often accomplished between organizations with different backgrounds, languages, and cultural differences. To outsource successfully, you should implement corporate policy that provides data security and protects the privacy of your customers. While cost reduction is a valuable benefit, you should be aware of outsource individuals who may have hidden costs associated with the work they provide.
Customers often use social media channels when purchasing products or services. Social media channels including Facebook, Amazon, and Yelp are greater influences than electronic word-of-mouth communication on business websites and testimonials. Electronic word-of-mouth (eWOM) has a significant influence on the success of your business, and has become a major factor in customer decision-making processes.
The main contrast between traditional word-of-mouth and eWOM is that eWOM has a greater reach and accelerated interaction. Considering the simplicity of accessing eWOM reviews, your business should progressively seek to analyze related factors and outcomes influencing eWOM. Electronic word-of-mouth goes far beyond traditional word-of-mouth to include online communication and networking through social forums, review sites, and news sites. Therefore, your sales are highly dependent on eWOM influences. Moreover, eWOM affects the trust and perception of your business, and the products you offer. When there is a large number of positive eWOM referrals, sales and business profits are likely to increase.
The marketing message is the heart of a marketing plan. It details the business’s plan for the market materials, how the company plans to achieve its marketing goals and the tactics that will be used to meet them. The marketing message determines how the business intends to communicate its message to the customer.
When creating your marketing message make certain that you focus on how you want your company to be perceived by customers. Do you want customers to view your business as having good prices, customer support, quality service, etc? Once you determine your marketing message, you will know the next steps for achieving business success.
It is difficult to be both a specialist in your profession and an expert in understanding your current and potential customers. If your expertise is in being a chef or hair stylist, you shouldn’t expect to launch a top-notch website or marketing campaign using analytics, data analysis, or customer insight without actually taking the time to understand marketing research in the same way that you learned your profession. In developing marketing strategies and enhancing your knowledge, it is essential to conduct market research to better comprehend your customer base and their needs. Like any profession, effective marketing requires time and dedication to gain the experience necessary to properly research and analyze your customers, considering they do not always think, act, believe, or have the same priorities or values as you. The keys to understanding how to grow your business are in researching your industry and target consumer group. Once you have researched your customers and analyzed the data, you need to develop a targeted strategy to grow sales. Only then will your marketing efforts and business flourish.
