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far a more difficult and more complicated affair than it is in domestic trade, just as the knowledge upon which it is based is more intricate and less easy to acquire. In domestic trade, instinct is of itself a kind of knowledge. Most people acquire a sense for the right action almost automatically, through long association with men and affairs and through the influence of environment. One needs only to be born and bred in the United States and to have an ordinary education and common sense to be a fair judge of his countrymen and to understand their customs, their tastes, and their manner of doing business. Even the knowledge of the laws of the country is acquired without perceptible effort through environment-through the ordinary intercourse and reading of daily life.

Definite Study Essential

But instinct helps little in foreign trade. There one must learn the character of the people, their ways, their business methods, and other fixed conditions prevailing in a given country through patient study and observation on the ground. Without this knowledge the trader may encounter difficulties which will prove disastrous to his venture. The amount of knowledge requisite to a well-directed effort in a foreign field seems to bewilder and frighten many a manufacturer. This to some extent accounts for the fact that so many American producers, instead of handling their export business themselves, leave it entirely to the care of commission houses.

After all, when the intricacies are fully considered, the knowledge necessary to the successful conduct of foreign trade is no more impossible to gain than the knowledge of many other phases of business activity, only requiring systematic, intelligent endeavor. It is not the object here to teach business strategy in international trade, but merely to point out the essentials in the store of information which must be acquired before one can qualify as a strategist in that field.

The Collection of Information

In one sense strategy is a deduction. There must be definite data in hand from which the deductions may proceed. The first step toward the acquisition of strategic information is to find out what data are essential and through what channels such data may best be obtained.

There are, of course, in every country various sources of trade information, such as governmental bureaus, banks, and trade associations, which will be more fully discussed in the next chapter. Volumes upon volumes of material have been gathered by consuls and representatives of private concerns in all parts of the world. The reader must be able to discriminate, however, otherwise years of study and research would be only so much waste of time.

Investigation on the Spot

An international trader should take as his fundamental maxim, that the most valuable information is that which is acquired on the ground and personally by one who will participate in the planning of a selling campaign in a given country or market. The information acquired at home and all other second-hand information is of less value and most helpful to the extent that it facilitates personal research. The study of actual cases has fully demonstrated that the concerns which have made a success in foreign ventures have acted upon this principle, and that those which failed have relied wholly on second-hand information.

While the information collected on the ground concerning demand and supply and the structure and psychology of the market shows the immediate trade status, it should be supported by wider study both of the foreign country itself and of its relations with the United States. A physical examination of the human body shows the present state of a man's health, but it does not indicate whether it is likely to improve or grow

worse.

To determine that one should know the man's mode of living, his occupation and habits, and his history, personal and ancestral. So it is with a market. Knowledge of the present status gives no certain indication of the future. Some attention must be given to the study of the political, governmental, and legal status of the country under investigation, of its history and economic conditions, and possibly of the structure of its society.

The details to be mastered will vary with each case and the man who knows his own business must be his own final judge of what to learn and what to pass by. But it is always well for him to know the nature of the relationship between the foreign country and his own. Diplomacy nowadays is a part of international trade strategy, covering the action of parliaments, the policies of governments, and the fortunes of war.

The trade of the world in the future will be far more active than ever before, the attack upon new fields will be sharper, fiercer, more international, and more overwhelming. This fact, with the continually changing conditions, makes it impossible to place complete reliance on any but the most recent records which have been prepared for a given market, however useful other information may be as indicating approximate conditions.

What May Be Learned at Home

Nevertheless, a theoretical knowledge of foreign trade should be acquired first through home study. The main facts of demand and supply, and of all the necessary conditions and requirements of trade in a given market can thus be learned. If the interests involved are large the trader should visit the country with which trade is contemplated and make an actual survey of the market by personal observation, applying and confirming second-hand knowledge derived from books, journals, reports, papers, and correspondence. Then and not till

then is he ready to draw final plans for a commercial campaign. Strategic information of primary importance is the knowledge of demand and supply—their sources and extent with reference to a given product in a given country. A man does not look for bread in a desert, nor will he try to sell his wares either in a country which has no need for them, or in one in which the markets are overstocked with similar lines. But that is not all. Scientific direction of business in any territory requires familiarity with the nature and quality of the goods to be sold, their possible uses, the prevailing prices, extent of existing competition, and whether or not the demand is actual, real, and permanent. Such data as well as the knowledge of the people, their tastes, habits, and business methods can best be learned through personal observation.

Supply and price are by no means all that control trade in any country, for the state of mind of the people is quite as important an item.

Study of the Psychology and the Structure of the Market

The study of the psychology and the structure of the market is, therefore, important, for it should be remembered that every market has its peculiar structure and its distinct psychological aspects. Every nation, nay every city, has its collective soul, or atmosphere, and so every market has its distinctive characteristics.

A market, after all, is the manifestation of the feelings, desires, and the material aspirations of the people. Its condition reflects the conditions which prevail among them. Find the measure of the market and there will be found the measure of the people that make it what it is, and conversely. The structure of the market is more apparent after one has examined the methods of distribution, the mercantile systems existing in a particular territory, and the commercial laws and customs upon which they are founded. The observer learns by

comparison. Knowing the commercial methods and the structure of the domestic market in his own peculiar line, if he is a keen observer, he will quickly note the differences in the foreign market. In the same way, he grasps the financial situation. Once the conditions of demand and supply and the structure and psychology of the market are ascertained, other knowledge comes naturally and as a matter of course.

Charting the Results of Investigation

After the prospective trader has completed each detail of his survey on the ground, the results of his investigation should be reduced to writing. At the conclusion of the trip these data should be carefully classified, digested, and embodied in a chart. This chart becomes the war map of the foreign trade strategist, or of the strategic board that is to sit in judgment upon the accumulated data, and formulate conclusions as to the advisability of a campaign, and of its nature and extent in a given territory. (See "Investigator's Summary of Analysis Sheet" in Appendix D.)

One may feel that it is not an easy thing for a stranger to obtain information in a strange land and may be uncertain as to how to proceed. The difficulties of making such investigations are not, after all, so much greater than they are at home except that the process usually takes a little longer. The channels are the same, and abroad one may have in addition the assistance of the diplomatic, consular, and trade representatives of his own country. All these are at the service of the trader, or, if he cannot or does not care to go abroad himself, of his representative.

To get in touch with the market, to examine the lines of current merchandise, and to study the methods of competition. at close range are alone worth the cost of the trip. A better knowledge and grasp of actual conditions can be obtained by personal observation in a week than can ever be learned at

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