Export Marketing

Need and Importance of Export Marketing

Valuable source to earn foreign exchange.Helps promote and accelerate the pace of economic development.Helps development of tertiary sector as well.Eg- transport , communications , banking , finance , insurance , etc.Leads to generation of employment opportunities.Foreign market entry strategy where other strategies may not be feasible.

Importance for Small scale industries

Enhances the competitive abilities of the small scale entrepreneur.Diversification of risk ; risk of recession and low demand in domestic market.Revival of old brands in foreign markets which are on the decline phase in domestic market.Emphasis on high quality products with higher prices which bring in greater revenues.Incentives and concessions from the government

Significant role of small scale industriesSmall enterprises in the Indian Economy accounts for 35% of the gross value of output in the manufacturing sector, about 80% in industrial employment and about 40% of the total exports of the country.Areas where the small scale sector can emerge as strong global player are : Food Processing IndustriesLeather GoodsElectronic GoodsPlastic GoodsIT and software exports

Methods of Export Marketing

Direct Exporting Manufacturer himself undertakes the responsibility of exporting the product which includes developing network , appointing sales staff , agents and offices in foreign countries , booking of orders, selling , after-sales service , etc.

Indirect Exporting - The entrepreneur exports the products through the export houses , merchant exports , trading houses and export consortia

Type of information required To explore the extent to which a producer / exporter can be competitive in selling its products , following information is required:(1) Market growth potential, consumer profiles, segments, intermediaries, distribution networks etc. (2) Existing competition and market share(3) Prevailing pricing structure and market rates.(4) Government policies; entry barriers(5) production and selling costs(6) Scope for revenues and profit margins.

Various costs that are associated with export marketing (1) Production Costs: Fixed cost and variable cost or factory costs.(2) Selling and distribution costs, transporting, shipment costs etc.(3) Cost of marketing support and development-for advertising, sales promotion etc.(4) Administrative costs salaries, office expenses, audit, legal fees etc.

Export Documents and Procedures for Small Scale Industries

Types of Documents Classified into four types according to the functions performed by them:Commercial DocumentsRegulatory DocumentsExport Assistance DocumentsDocuments required by importing countries

Steps in processing of an export order

Having an export orderExamination and confirmation of orderManufacturing or procuring goodsClearance from central excisePre-shipment InspectionAppointment of Clearing and Forwarding AgentsGoods to Port of ShipmentPort Formalities and Custom ClearanceDespatch of documents by Forwarding Agent to the exporterCertificate of OriginDespatch of Shipment Advice to the ImporterSubmission of Documents to BankClaiming Export Incentives

Export Marketing Organisations in India

Merchant exportersExport housesTrading housesStar trading housesSuper star trading housesExport ConsortiaExport corporationsService export house

Export Import Policy of India

The EXIM Policy of India provides the guidelines , rules and regulations framed by the government towards exports and imports.

It consists of :Open general license itemsItems restricted for exports and importsSpecial import license itemsAdvance License ItemsDuty Entitlement Pass Book SchemeExport Promotion Capital Goods SchemeEligibility criteria for Export Houses and all forms of Trading HousesBenefits to Export- Oriented Units(EOUs), units in Export Promotion Zones(EPZs) and other exportersSchemes for exporters and importers and other details

Finance for exports The government has established special financial institutions and has introduced various financial schemes to assist the exporters. They are : Export Import Bank of India ( EXIM Bank) Export Credit Guarantee Corporation of India Ltd. (ECGC) Small Industries Development Bank of India (SIDBI) Reserve Bank of India (RBI) Commercial Banks

Export Promotion Organizations

State Trading Corporation of India (STC)Export Promotion Council (EPC)India Trade Promotion Organization (ITPO)Indian Institute of Foreign Trade (IIFT)Indian Council of Arbitration( ICA)Federation of Indian Export Organizations ( FIEO)Export Inspection CouncilDepartment of Commercial Intelligence and StatisticsWorld Trade Organisation (WTO)

Problems related to exports

Unawareness about foreign marketInadequate Knowledge of procedure, formalities and legal requirementsInformation Technology a barrierInconsistent QualityInconsistent production levelsCost ineffectivenessFrequent strikesComposition of ExportsGovernment Machinery

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