CoastTea exports packaged tea from Kenya to a retailer in Germany. Kenyan farmExporterGerman shop© EAGLE BEACON GLOBAL (a) Describe what is meant by an expo...

(a) An export is the sale of goods or services to another country. CoastTea sends tea out of Kenya to be sold in Germany. [2]

(b) An import is the purchase of goods or services from another country. The German retailer brings Kenyan tea into Germany for sale. [2]

(c) CoastTea may export because Germany offers a larger market of customers and demand for its tea. Selling where demand exists can increase sales. [2]

(d) Packaging may need German information so customers can understand ingredients and instructions. German labelling rules may also require this information. [2]

(e) Export documents can include a commercial invoice, bill of lading and certificate of origin. [3]

(f) If the Kenyan currency strengthens, the tea can become more expensive to German buyers. If it weakens, the tea can become cheaper abroad. Also, the amount CoastTea receives when foreign currency is converted into Kenyan currency can change. [3]

(g) A retailer may import tea because it may not be grown locally, may offer a distinctive quality or variety, or may be available from foreign suppliers at a suitable price. [3]

(h) Barriers include tariffs, which raise selling price; language and cultural differences, which can make marketing less effective; and long transport distances, which add cost and may cause delays. [3]