export marketing

5/28/2018 Export Marketing

1/145-1 Excel BooksExport and Import Management (First Edition) Aseem Kumar

Copyright 2007, Aseem Kumar

Export Marketing

Chapter

Export Marketing




Export Marketing

Export marketing can be defined as identifying willing foreign buyers whose

needs could best be met using our products and delivering satisfaction through

supply of goods in their countries complying with formalities of international

transactions of both countries.

The different stages of Export Marketing are:

1. Totally Uninterested firm

2. Partially Interested firm

3. Exploring firm

4. Experimental firm

5. Small Exporter

6. Large Exporter

7. International firm:




Export Marketing

Common Pitfalls

An exporter must safeguard himself against falling prey to any or many of these:

Failure to realistically analyze the proposed export operations

Inability to develop a suitable export-marketing plan

Half-hearted commitment/lack of full sponsorship by the Top Management

Careless/hasty decision-making

Chasing orders all over the world

Unwillingness to be flexible in terms of product offerings

Lack of initiative in gathering sufficient market/buyer information

Acute focus on short-term gains.




Export Marketing

Cont.

Scanning the general business environment:

Demographic/Physical Environment

i. Population size, growth, density

ii. Urban and rural distribution

iii. Climate and weather variations

iv. Shipping distance

v. Product-significant demographics

vi. Physical distribution and communication network

vii. Natural resources.




Export Marketing

Cont.

Political Environment

i. System of government

ii. Political stability and continuity

iii. Ideological orientation

iv. Government involvement in business

v. Attitudes toward foreign business (trade restrictions, tariffs, non-tariff

barriers, and bilateral trade agreements)

vi. National economic and developmental priorities.




Export Marketing

Cont.

Economic Environment

i. Overall level of development

ii. GNP, industrial sector

iii. Role of foreign trade in the economy

iv. Currency: Inflation rate, availability, controls, and stability of exchange rate

v. Balance of payments

vi. Per capita income and distribution

vii. Disposable income and expenditure patterns.

Social/Cultural Environment

viii. Literacy rate, educational level

ix. Existence of middle class

x. Similarities and differences in relation to home market

xi. Language and other cultural considerations.




Export Marketing

Market Access, Limitations on Trade

i. High tariff levels, quotasii. Documentation and import regulations

iii. Local standards, practices, and other non-tariff barriers

iv. Patents and trademark protection

v. Preferential treaties

vi. Legal considerations for investment.

Product Potential

i. Customer needs and desires

ii. Local production, imports, consumption

iii. Exposure to and acceptance of productiv. Availability of linking products

v. Industry-specific key indicators of demand

vi. Attitudes toward products of foreign origin

vii.Competitive offerings.




Export Marketing

In-depth Market Research

One of the fundamental decisions and possibly the most critical one that faces acompany intent on making forays into the export markets is the selection of thetarget market(s). It requires a careful study of the potential markets and matchingtheir needs either with the existing products or modified/new products. Anexporter needs to undertake a great deal of primary as well as secondaryresearch to define and understand the nature and dynamics of the target

market(s). A thorough analysis of the target market will include customers,suppliers, substitute products and services as well as present and potentialcompetitors.The research has to answer the following questions: What are the most exportable products to be offered to target market(s What makes your product(s) unique for markets abroad

What are the best countries to market your product Who will be your target customers within your chosen markets What is the best way to approach the target customers What buying companies, agents or distributors would most likely be useful to

get you the prospective customers for your export products What other sources could be tapped to source export business.

Cont.




Export Marketing

The buyer sourcing: Having completed the basic marketing research to

establish particular potential pockets of customers, the next step is to look for

orders.

There are a number of sources available these days that provide useful buyer

information in different product/country categories. These are:

Government Agencies:A number of government agencies in India are engaged

in export promotion activities in their respective fields. Exporters must seek their

help in their export marketing pursuits.




Export Marketing

Buying Houses

Buyer is a proper designation in most foreign companies, who source products

from other countries.

The buyer does the job of buying products for his company from various

sources including those located in other countries.

These buyers are specialists in their own fields and they travel around the

world to source suppliers.

Multinational/global companies set up their own buying officesin different

countries where they buy huge quantities and regularly.

An exporter, thus, needs to find out such persons/companies who represent

any foreign company as their buying agents in his line of work. The task to

follow is to source orders from such set-ups.




Export Marketing

The process of initial dealings with a buying house is depicted in the

flowchart below:

Exporter submits profile with an introductory letter

The buying company reviews it and if satisfied calls the exporter for a meeting

The exporter if found satisfactory during the meeting, is asked to arrange

for a factory visit

The buying house representatives inspect the exporters facilities

If satisfied, the exporter might be asked to create samples

Cont.




Export Marketing

The exporter creates and submits samples with his price quotation

The samples are sent to buyers abroad

The buyer asks for certain changes

The exporter submits revised samples

The foreign buyer approves the samples

The buying house places order after price negotiation

The exporter accepts the order and starts work




Export Marketing

Foreign Visits

An expensive but fruitful way is to visit foreign countries to explore export

business opportunities. Business travel abroad can locate and cultivate new

customers and improve relationships and communication with current foreign

buyers. Use all possible secondary data sources like buyer/importer directories

published by various government/private institutions both in India and abroad,

trade journals and other such publications that carry import enquiries, internet,

etc. to collect potential buyer information in the area of your business. Establish

contact with all leads possible to generate maximum response. Use e-mails as

far as possible as they are most cost-effective. Try to obtain the maximuminformation about the prospects. Assess the inclination of the buyer. Do not insist

on visiting him on your own initiative.




Export Marketing

Communicating with Buyers

Effective communication is an essential part of business.Given below are some pointers to effective export communication:

Do not use high-sounding words in your letter to your foreign buyer.

Avoid verbosity in your letters; avoid discussions on politics and religion.

Whenever you receive a letter from your foreign buyer that offends your

sensescontrol your emotions and do not run amuck.

Never send a letter to a foreign buyer when you are angry or in a bad mood.

Even when you are collecting from a foreign buyer unpaid accounts that are

already due and demandablemaintain your tact and diplomacy.

If a foreign buyer tells an exporter that he is going to file a case against the

latter for one reason or another, do not write back and say: Goto hell.

Do not be irritated or offended by a day-to-day follow-up fax message sent to

you by different persons working in the office of your foreign buyer.

Make it a habit to reply to letter/fax messages of your foreign buyers.

export marketing

Documents

edition aseem kumarcopyright

import management

excel booksexport

economic environmenti

political environmenti

role of foreign trade

political stability

bilateral trade agreementsvi