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Role of merchandiser in export house

There are 2 types of merchandisers in export houses - buyer and production merchandisers. Buyer merchandisers act as a link between the buyer and the manufacturer. They have the responsibility of ensuring that the product is developed as per the requirements of the buyer so in between they have the resposibilty of sourcing, sampling and communication with the buyer. The production merchants on the other hand are a link between production and buyer merchants. They have the responsibility of ensuring that the production goes as per the schedule and as per the requirements.

Market Entry Selection of Markets is the first step in international marketing, it is important that the right product is marketed in right markets. After carefully selecting the market the exporter has to decide the method of entry in the market. There are eventually two ways to enter a foreign market, namely indirect and direct, in the indirect method the exports are almost equivalent to domestic sale and it is done in two ways namely (a) selling to a merchant exporter or export house in India and (b) selling to visiting/resident buyers. However, in direct exporting, the manufacturers takes upon himself the task of managing the export sale.

Participation in Trade Fair The exporter may also participate in the trade fairs organised in india and abroad in order to explore the possibilities/opportunities offered by them.

Market Research Another important tool before entering into export market is market research as it helps the exporters in decision making. The need for market research, arises to provide a sound database which help the management in taking decisions

regarding new product launching, product adaptation and in developing comprehensive and strategic marketing plans Export Pricing The pace of export expansion is an important determinant of economic growth in developing countries. And for achieving the desired rate of growth in export, effective pricing policing for exports constitutes an essential elements. Export pricing assumes strategic significance especially because of the relatively lower technological base of developing economics resulting in higher cost of production. Pricing is like a tripod, the three legs being costs, demand and competition.

Selection of Agent Many exporters who have a marketable, appropriately priced, good product and who are able to develop and finance a marketing support plan encounter export difficulty in spite of all these advantages, because they select an overseas agent haphazardly. An exporters need to take four basic steps to solve this problem. He may (a) determine his marketing requirements (b) established contacts with prospective agents (c) evaluate the list of agents and select a suitable one (d) appoint agent.

Promotion There are various modes through which an exporter can promote its merchandise namely advertisments in foriegn publications/trade journals in the identified markets and also in the reputed Indan publications. The exporters may also create a CD ROM catolog of it products along with a website providing an insight into its activities/products.

Terms of Payment The nature of credit terms offered by the suppliers is very decisive in obtaining order.

Export Contracts In the contract of sale, it is important that the principle parties to the contact viz. seller and buyer do know clearly, and without any ambiguities, their respective rights and obligations. What is it that each of them is supposed to do under the contract and what does one get in consideration for the fulfillment of the obligations set out in the contract? The International Chamber of Commerce (ICC) has spelled out clear cut rules of international trade in order to avoid ambiguities.

Export Finance Financing the exports is an important aspect which the exporters need to plan in advance. There are two different stages of finance for the exporters namely (a) pre-shipment and (b) post shipment. During pre-shipment the finance is needed for purchase/procure, for processing, for manufacturing, for assembling, for packaging and for shipping. During post shipment the finance is needed for providing facilities to overseas customers till such time as the proceeds are realized.

Other Documentations The other mandatory documentations required for exports also need to be taken care of by the exporters. For this he may take the assistance of Director General Foreign Trade (DGFT), Indian Institute of Foreign Trade (IIFT), India Trade Promotion Organization (ITPO),

respective Export Promotion Councils (EPCs), Foreign Embassies in India, Buying Agents, Freight Forwarding Agents etc.

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Export houses: An untapped opportunity


Sanjeev Pandey IN SHARP contrast to the consistently accelerating exports of Hong Kong, South Korea, China, and of late Thailand and Mexico, India's has been painfully slow, reflected in its declining share of world exports from more than 2 per cent in 1950 to less than 0.5 per cent in the early 1980s but, which a few years back improved a little to 0.6 per cent. Sustaining export growth at the rate of approximately 20 per cent per annum achieved in 1993-96 has become illusive. The continuously declining export performance from 1996-97 to 1998-99 was so depressing that the various government agencies almost gave up setting export growth targets. Export incentives and assistance arrangements were frequently modified and improved but the result has not been commensurate. And, though exports are looking up this year, recording a 11 per cent growth over the same per iod last year, it is doubtful if it can be sustained. In the last few years, India's exports have hovered around $32-34 billions per annum, while the official expectations for the latter half of the 1990s were to accelerate exports by $5-9 billions per annum, thus reaching $75 billions this year, and pushing India's share of world exports to more than 1 per cent. With China, Taipei and Mexico achieving high growth rates even in the midst of decelerating world exports, the export growt h envisaged was achievable, provided the right strategies were adopted. Where and why does India lag in strategic export marketing? To

develop professional export marketing techniques and accelerate exports, the export houses scheme was evolved, almost four decades ago. Over the years, these professional export firms, with p roven competence in marketing, have spearheaded India's market penetration. The contribution of these specialised bodies in the country's overall exports has been increasing steadily. Their share in 1968-69 was 21 per cent. It increased to 49.9 per cent in 1985-86 and to 75 per cent in 1997-98. Apart from their increasing contribution, their rate of growth of exports was also higher than the rate of growth of India's exports, particularly in the last 25 years. However, their performance so far in terms of expansion and diversification of exports compared to leading foreign trade operators has not been laudable. Export houses have to rise above the traditional rut of trying to sell whatever they produce or what ever they procure from their feeder units. Deficiencies in various important segments of strategic export marketing such as identification of markets, product development and adaptation, and market research and development are some important factors responsible for the poor performance, as reflec ted in a declining share of world exports, as also in the export of important product groups, including some traditional ones such as tea and spices considered to be India's forte. The export incentives and assistance arrangements so far available, cater to the international marketing needs in the traditional and limited sense of the term. All along, the approach was ad hoc, introducing new measures or modifying the existing ones. The main emphasis of the export-promotion measures has been to improve the price competitiveness of Indian products, facilitating their production, transportation and sale but mostly in an inadequate manner without much reference to foreign market situat ions and needs. Various fiscal, financial and some input incentives are mostly meant to reduce the cost disadvantages of the export products and augment the profitability of export marketing. They are scarcely attuned to the fast-changing export marketing needs. Moreove r their procedural formalities, despite the streamlining, continue to be complex and time consuming. Their working, to say the least, is regulation, rather than need, based. The infrastructural facilities to serve the needs and requirements of a dynamic export sector are totally inadequate. Bottlenecks in the form of acute power shortages, congestion at ports and airports, shortage of rail wagons, poor condition of the roads , inefficient telecom facilities, procedural delays at Customs clearance, have all affected the export performance. Since no major export growth drive will be successful without a modern cost-effective structure, it is necessary that immediate steps are taken by the government to bring it on a par with international standards at the earliest. International marketing information, which plays a vital role in effective international marketing operations, is not yet developed properly. Despite the latest telecommunications techniques, the

changes in the various markets because of the varying leve ls of industrial and technological growth, resource endowment transformation, and, more important, politico-socio-cultural changes, all which ought to be regularly compiled, analysed, interpreted and disseminated, have not been fully developed. This info rmation tends to affect directly the market access for Indian goods and services, their competitiveness and their entry and sale on an increasing scale in different markets. In the last few years, the international marketing environment has changed unprecedentedly, mainly due to various commercial policy changes in individual countries, as well as groups under different regional economic blocks, coupled with the implementati on of a large number of understandings, agreements and decisions relating to trade in merchandise, trade in services, investment measures and intellectual property rights under the World Trade Organisation (WTO). All these have a far-reaching impact on t he comparative competitiveness of different foreign trade operators at the firm, and also the country-level. To meet the challenges of the fast-changing global business environment, a regular flow of processed and interpreted information regarding enviro nmental changes is to be ensured through well constituted institutional arrangements. The National Centre for Trade Information needs to be geared up to provide such complete information in respect of various environmental changes taking place in differe nt countries which constitute target markets for our exports or target sources of supply for our imports. Discontinuous information in tid-bits which may be made available in response to queries from exporting firms about various environmental changes, w ill not meet the purpose of an effective information system in the context of strategic international marketing management. Another important development has been the continuously growing influence of the multinational corporations (MNCs) on the global business environment and their increasing participation in trade and investment flows through strategic alliances in various countries, particularly the developing ones. For various reasons, export houses, particularly their later variants, have not been able to enter into global strategic partnerships with the MNCs and their affiliates to leverage their international business operations. It is, therefore imperative that export houses keep track of the changes taking place in the international business environment by calibrating their operations, collaborating with the MNCs and their affiliates to tackle effectively the threa ts, and exploit fully the opportunities. An important factor determining the success of an international business concern is its ability to develop close and strong links with a large and dependable supplier base. Almost since the beginning of the system of export houses, their performance has depended on the cooperation and support of the feeder units. All the merchandising export houses, including their later variants, rely on other producers and manufacturers from the small-scale and other sectors. Such links not only ensure regular and timely supply of exportables, but also enable the exporters to monitor closely the production

process to ensure conformity to the internationally acceptable range of specifications and quality. This helps the feeder units to upgrade technology, get imported inputs and produce quality goods to suit foreign markets. Keeping this in view, export incentives and assistance arrangements have to be oriented suitably to strengthen the feeder units as also to build good rel ationships between the two. These measures can be expected to go a long way in improving the performance of the export houses in keeping with the accelerated export growth objective. This would also enable the country to attain the long-cherished goal of $75 billion exports which i s supposed to constitute about 20 per cent of India's gross domestic product.