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GUIDELINES FOR STARTING AN EXPORT 1EXPORTS KITCHEN.

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Presentation on theme: "GUIDELINES FOR STARTING AN EXPORT 1EXPORTS KITCHEN."— Presentation transcript:

1 GUIDELINES FOR STARTING AN EXPORT 1EXPORTS KITCHEN

2 ECONOMY Exports play a crucial role in the economy of the country. In order to maintain a healthy balance to trade and foreign exchange reserve it is necessary to have a sustained and high rate of growth of exports. Although trade policy is the jurisdiction of the Government of India, the role of the State Governments in its effective implantation is less significant because export production is a local activity, which is influenced by policies of the State Government. 2EXPORTS KITCHEN

3 DEFINITION OF EXPORTS “Exports can be defined as sale of goods and services from one country to another country.” 3EXPORTS KITCHEN

4 WHY TO EXPORT ? WHAT TO EXPORT ? WHERE TO EXPORT ? & HOW TO EXPORT ? 4EXPORTS KITCHEN

5 WHY,WHAT,WHERE & HOW TO EXPORT ? 1. Product in declining stage of Life Cycle in domestic Market (Pre- Liberalization)*. 2. International Market is vast and Internal market is limited hence, “EXPORT VOLUMES”. 3. Building – Up of image & reputation in International Market as an expansion strategy. 4. Foreign markets invite innovative and cost-oriented companies to buy quality products at a cheap price. 5. High – Tech oriented companies enter into less developed countries to skim the market. 6. Restrictions in domestic market force companies to view export as an alternative. 7. Government pressurizes companies to export to earn valuable foreign exchange to pay for Import Bill. 8. Government is keen on reducing the adverse Balance of Payment position. 9. Government extends incentives and facilities to dynamic exporters to export their surplus capacity. 10. Many firms go for overseas market for availing of import facilities to modernize their plant. * Now, you can start “EXPORTING” from day 1 5EXPORTS KITCHEN

6 MARKET SELECTION Before the company pursues market expansion opportunities by entering new geographic markets, executives and managers must first analyze the global environment. The company exists in a world of more than 200 countries and territories, each of which differs from all the others in some respects. At the same time, there will be ways in which various countries and the people who live in them, resemble each other as well. The process of target – market selection involves narrowing down potential country markets to a feasible number of countries and market segments within them. Rather than try to appeal to everyone, firms best utilize their resources by…… 1. Identifying potential markets for entry and 2. Expanding selectively over time to those deemed attractive. 6EXPORTS KITCHEN

7 FIVE STEPS OF MARKET SELECTION IDENTIFICATION SCREENING ESTIMATING MARKET POTENTIAL ESTIMATING SALES POTENTIAL IDENTIFYING SEGMENTS 7EXPORTS KITCHEN

8 IDENTIFICATION If markets are similar in their characteristics, the international marketer could enter any one of the potential markets. However, differences between markets exist in three dimensions………..1. Physical. 2. Psychic. 3. Economic. * Physical distance is the geographic distance between home and target countries, its impact has decreased as a result of recent technological developments. Psychic or cultural distance refers to difference in language, tradition and customs between two countries. Economic distance is created by differences in the economic environments of the host country and the target market. Generally the greater overall distances or difference between the two countries, the less knowledge the marketer has about the target market. The amount of information that is available varies dramatically. For eg, although the marketer can easily learn about the economic environment from secondary sources, invaluable interpretive information may not be available until the firm actually operates in the market. 8EXPORTS KITCHEN

9 SCREENING The four stages of Screening Process are…… 1. Preliminary Screening. - Export Ban. - Import Ban. - Market Accessibility. - Preferential Treatment. - Location. - Product Specifications. 2. Estimation of Market Potential. 3. Estimation of Sales Potential and 4. Identification of Segments. 9EXPORTS KITCHEN

10 PRELIMINARY SCREENING * The preliminary screening process must rely chiefly on secondary data for country specific factors as well as product and industry specific factors. 1). Country specific factors typically include those that would indicate the markets overall buying power. 2). Product specific factors narrow the analysis to the firm’s specific areas of operation. 10EXPORTS KITCHEN

11 1. EXPORT BAN There are a few countries / areas to which exports are not currently made by India. Eg : Iraq & few items to Libya. Hence, such countries should straight away be excluded from the list of potential market. 2. IMPORT BAN There are various countries in the world, which do not allow import of the items in which one should also be avoided from the list of potential markets. For this purpose, import policy of other countries has to be referred, which is difficult to get. 11EXPORTS KITCHEN

12 3. MARKET ACCESSIBILITY There are countries, which are comparatively less accessible in terms of export regulations in comparison to the countries where imports are freely permissible. Similarly, imports from particular countries might be preferred under bilateral trade or barter agreements in comparison to imports from India. Hence, such countries should also be avoided from the export marketing effort. 4. PREFERENTIAL TREATMENT Whereas some countries do not prefer imports from India, there are few countries which accord preferential treatment to our products. The countries which have adopted the scheme of Generalized System of Preferences (GSP) are giving a preferential treatment to products from developing countries like India, Belgium, The Netherlands, Luxembourg, UK, Ireland, Denmark, Japan, Australia, USA etc are therefore comparatively easy markets for us. 12EXPORTS KITCHEN

13 5. LOCATION The countries that are located near to us are comparatively better markets that the countries located at a long distance. Selling to distantly located markets becomes difficult on account of non- availability / irregular shipping services besides higher freight rate, thereby making the goods uncompetitive. 6. PRODUCT SPECIFICATIONS One should prefer the countries where products of the specifications similar to ours are sold. Hence, countries requiring goods with different specifications should be avoided as production of items according to the changed specifications involves money and time. 13EXPORTS KITCHEN

14 ESTIMATING MARKET POTENTIAL Total market potential is the sales, in physical or monetary units, that might be available to all firms in an industry during a given period under a given level in industry, marketing effort and given environment conditions. The international marketer needs to assess the size of existing markets and forecast the size of future markets. Because of the lack of resources, and frequently the lack of data, market potentials are often estimated using secondary database analytical techniques. 14EXPORTS KITCHEN

15 ESTIMATING SALES POTENTIAL Even when international marketer has gained an understanding of markets with the greatest overall promise, the firm’s own possibilities in those markets are still not known. Sales potential is the share of the market potential that the firm can reasonably expect to get over the longer term. To arrive at an estimate, the marketer needs to collect the product and market specific data. These will have to do with……. COMPETITION : Strength, likely reaction to entry. MARKET: Strength of barriers. CONSUMERS: Ability and willingness to buy. PRODUCT: Degree of relative advantage, compatibility,complexity,trialability. CHANNEL STRUCTURE : Access to retail level. The marketer’s questions can never be fully answered until the firm has made a commitment to enter the market and is operational. The mode of entry has special significance in determining the firm’s sales potential. 15EXPORTS KITCHEN

16 IDENTIFYING SEGMENTS Within the markets selected, individuals and organizations will vary in their wants, resources, geographical locations, buying attitudes and buying practices. Initially, the firm may cater to one or only a few segments and later expand to other especially to the product in innovative segmentation is indicated when segments are indeed different enough to warrant individualized attention are large enough for profit potential and can be reached through the methods that the international marketer wants to use. Once the process is complete for a market of group of markets, the international marketer may begin again for another one. When growth potential is no longer in market development the firm may opt for market penetration. 16EXPORTS KITCHEN

17 Thanks & Regards………. Ms. MEDHA KULKARNI Director MCCIA – Women’s Entrepreneur’s Wing ID : Mr. BHASKAR DASTIDAR Consultant : Financial Services Export Import Bank of India. ID : 17EXPORTS KITCHEN


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