Preliminaries for Exports

7/31/2019 Preliminaries for Exports

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PRELIMINARIES FOR EXPORTS

1. Meanings of Exports.

2. Classification of Goods for Exports.3. Strategy and Preparation forExports.


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Meaning of Exports

According to Sec2(e) of ForeignTrade(Development & Regulation) Act, 1992the term Export is defined as:-

Taking out of India any goods by land sea orair

The goods must leave India, or cross thecustoms frontiers of India to a foreigndestination.


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Deemed Exports

Certain transactions in which the goods supplied

do not leave the country and the payment forsuch supplies is received either in INR or in freeforeign exchange are reckoned

at par with exports.


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Classification of Goods for Exports

Permissibility of import & export of goods isgoverned by the nomenclature{goods arearranged as they are in the HarmonisedSystem (HS) but are codified with 10 digitnumerical code to identify goods} ITC (HS)classification of import & export goods,

published by the Directorate General ofForeign Trade(DGFT).


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Classification of goods for

exports:Prohibited Goods

Prohibited items are not permitted to be

exported.For Example:- wild animals, exotic birds, beef,sea shells, human skeleton, peacock feathersetc.

Restricted Goods

These type of items can be permitted forexport under license.


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The condition wherever specified against therestricted items may be required to compliedwith.

State Trading Enterprises

Export through State Trading Enterprises STE(s)is permitted without an Export License through

designated STEs only as mentioned against anitem.

Restrictions on Countries of Export

Export to Iraq is subject to conditions asspecified in Para 2.2 of the handbook ofprocedures 2002-2007.


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STRATEGY & PREPARATION FOR

EXPORTSStrategy lays down the clear objectives &means of achieving those objectives. Exportmarketing strategy defines the selection of atarget market & determination of an idealblend of product, price, promotion &distribution mix.

An export marketing strategy of a firm mayinclude the following aspects:


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Ps of Exporting Marketing

The 4 ps of marketing are commonly known as:-

Product Price

Place

PromotionInternational trade being more complicated,there are additional 9 ps resulting into 13 ps of

international marketing. They are:


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Payment

Personnel

Planning Paperwork

Practices

Partnerships

Policies

Positioning

Protection


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Export Marketing Plan

An export marketing plan is a step-by-step guide

for strategy implementation.A typical export marketing plan focuses on:-

Marketing objectives

Market Segmentation

Market Research

Characteristics of Product

Export Pricing

Distribution Channels

Promotional Strategies


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Assessing a Products Export

Potential It means to assess the products success in

domestic markets.

It means if a company succeeds at selling in adomestic market, there is a good chance thatit will also be successful in markets abroad.

If a product is unique which is hard toduplicate abroad, chances are good forfinding an export market.


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Making Exports Decisions

What does the company want to gain fromexporting?

Is exporting consistent with the other goals ofthe company?

Does the company possess adequate keyresources, like management, personnel &

finance?

Are the expected benefits are worth thecosts?


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Approaches to Exporting

There must be 4 approaches, which may beused alone or in combination:

Passively supplying to domestic buyerswho then export

Seeking out domestic buyers whorepresent foreign end users or customers

Exporting indirectly through intermediaries

Exporting directly


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Export Pricing

Following factors need to be considered while setting exportprice:-

Currency exchange rates

Market research & credit checks

Receivables/risk insurance

Business travel

International postage, cable & telephone rates

Commissions, training charges & other expenses on

foreign staff Consultants and freight forwarders; &

Product or services modification & special packaging.


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There are several pricing strategies available toan exporter depending upon the nature of the

economy. Static Pricing

Flexible Pricing

Full Cost Pricing Marginal Cost

Penetration Pricing

Market Skimming


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Export Promotion

Advertising

Promotional materials

Direct mail Media

Personal visits

Trade shows

Internet

Documents

Preliminaries for Exports