Anda di halaman 1dari 14

Export Marketing

Chapter

5
Export Marketing

Copyright 2007, Aseem Kumar

5-1

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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.
3. 4. 5. 6. 7.
5-2

Partially Interested firm


Exploring firm Experimental firm Small Exporter Large Exporter International firm:
Copyright 2007, Aseem Kumar

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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.

Copyright 2007, Aseem Kumar

5-3

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

Export Marketing

Scanning the general business environment:


Demographic/Physical Environment i. ii. iii. iv. v. vi. Population size, growth, density Urban and rural distribution Climate and weather variations Shipping distance Product-significant demographics Physical distribution and communication network

vii. Natural resources.

Cont.
Copyright 2007, Aseem Kumar

5-4

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

Export Marketing
Political Environment i. ii. iii. iv. v. System of government Political stability and continuity Ideological orientation Government involvement in business Attitudes toward foreign business (trade restrictions, tariffs, non-tariff barriers, and bilateral trade agreements) vi. National economic and developmental priorities.

Cont.
Copyright 2007, Aseem Kumar

5-5

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

Export Marketing
Economic Environment i. ii. iii. iv. v. vi. Overall level of development GNP, industrial sector Role of foreign trade in the economy Currency: Inflation rate, availability, controls, and stability of exchange rate Balance of payments Per capita income and distribution

vii. Disposable income and expenditure patterns. Social/Cultural Environment viii. Literacy rate, educational level

ix.
x. xi.
5-6

Existence of middle class


Similarities and differences in relation to home market Language and other cultural considerations.
Export and Import Management (First Edition) Aseem Kumar
Cont.
Copyright 2007, Aseem Kumar

Excel Books

Export Marketing
Market Access, Limitations on Trade i. ii. High tariff levels, quotas Documentation and import regulations

iii.
iv. v. vi. i.

Local standards, practices, and other non-tariff barriers


Patents and trademark protection Preferential treaties Legal considerations for investment. Customer needs and desires

Product Potential
ii. Local production, imports, consumption iii. Exposure to and acceptance of product

iv. Availability of linking products


v. Industry-specific key indicators of demand vi. Attitudes toward products of foreign origin vii. Competitive offerings.
5-7 Export and Import Management (First Edition) Aseem Kumar
Copyright 2007, Aseem Kumar

Excel Books

Export Marketing

In-depth Market Research


One of the fundamental decisions and possibly the most critical one that faces a company intent on making forays into the export markets is the selection of the target market(s). It requires a careful study of the potential markets and matching their needs either with the existing products or modified/new products. An exporter needs to undertake a great deal of primary as well as secondary research 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 potential competitors. 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 Cont. What other sources could be tapped to source export business. Copyright 2007, Aseem Kumar
5-8 Export and Import Management (First Edition) Aseem Kumar Excel Books

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.

Copyright 2007, Aseem Kumar

5-9

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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 offices in 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.
Copyright 2007, Aseem Kumar

5-10

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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.
Copyright 2007, Aseem Kumar

5-11

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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
Copyright 2007, Aseem Kumar

5-12

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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 maximum
information about the prospects. Assess the inclination of the buyer. Do not insist on visiting him on your own initiative.

Copyright 2007, Aseem Kumar

5-13

Export and Import Management (First Edition)

Aseem Kumar

Excel Books

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 senses control your emotions and do not run amuck.



5-14

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 demandable maintain 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: Go to 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.
Copyright 2007, Aseem Kumar

Export and Import Management (First Edition)

Aseem Kumar

Excel Books