EXIM MANAGEMENT-Export Import Management- Anna University 2021 Regulation

1. Unit 2

2. Marketing
Export
▪ Regardless of whether companies have previous exporting
experience or are entering markets for the first time, there
are risks involved in exporting. It is crucial for companies to
set clear goals and study the desired market before initiating
new export sales growth activities. To help moderate the risks
of various types of export marketing, it’s important to align
exporting goals and activities, as well as ensure your company
moves in a successful direction. Developing an export
marketing plan is a critical step in any business’ market
expansion efforts.

3. Tips for
Creating an
Export
Marketing
Plan
• Where do we want to export?
• Why are we choosing these markets?
• What do we want to export?
• What activities do we intend to perform?
• Is there government funding available for export
marketing?
• How much in sales do we expect to generate and in what
period?

4. Study
Cultural
Differences
▪ Companies need to be aware of local customs and business
etiquette when choosing a market to tap into, as almost every
country will be different. Modesty, cultural awareness,
international negotiating abilities, and open-mindedness are
all important factors to consider. It can be worthwhile to visit
the country you’re targeting to learn more about culture and
practices.

5. Include an
Entry Strategy
and Marketing
Mix
▪ This section of the export marketing plan will outline the four
P’s in detail:
• Promotion;
• Price;
• Product; and
• Place.
▪ Companies ready for export expansion need to know what
they are bringing to the market, how the product/service will be
distributed, how much money it will sell for, and how these
goods and services will be promoted.

6. Develop a
Situational
Analysis
▪ This will most likely be the lengthiest section of the export
marketing plan, but it is important that you perform a thorough
overview of your company, how it will fit in the foreign market,
and how the market will receive your brand. A situational
analysis will focus on factors like your company’s strengths and
value proposition, social and cultural factors, legal factors in
the foreign country, international market analysis, competitive
industry analysis, and demographic and technological trends.

7. Create a
SWOT
Analysis
▪ A SWOT analysis is a standard management exercise that
assesses your company in the context of its internal and
external environments and should be undertaken by all firms
when planning export business activities. The analysis will
identify your strengths, weaknesses, opportunities, and threats
in the country you are planning to export to, providing an
illuminating view of what your intentions should be as you
move forward with the plan.

8. Outline
Budgets
▪ A budget needs to be realistic for your company in the current
moment. This section of the export marketing plan should
describe what the initial budget for your first export marketing
steps will be and how many sales you are forecasting to
generate in three to five years given your best realistic
projections for future outcomes. Expenses to consider include
marketing and promotion, communications, human
resources, travel, office, and contingency costs.

9. Know Your
Target
Country
▪ As with any marketing initiatives, understanding your target
country is crucial while developing an export marketing
strategy. Factors that should be noted are the market size,
exchange rate, population demographics, types of
infrastructure, legal and tax systems, and the overall economy.

10. Export contract
The export contract is used for the international
sale of certain products (industrial supplies, raw
materials, manufactured goods), which are
projected for resale, where the buyer is a trader,
importer, distributor or wholesaler that will sell
the products to another company or merchant.
Though it is common practice to export
products based a proforma invoice or quotation
received from exporters, it is a safe practice to
use written and legal export contracts.

11. Specs in
contract
Name and addresses of the parties. State clearly and fully the parties to the
contract.
• Product, standards and specifications. State the product name, as well as
technical names (if any); sizes in which the product is to be supplied (if
relevant); applicable national or international standards and specifications;
specific buyer requirements; and sample specifications.
• Quantity. Specify units of measure in both figures and words.
• Inspection. State the nature, manner and focus of the envisaged inspection,
as well as the inspection agency. A number of goods are now subject to pre-
shipment inspection by designated agencies, and foreign buyers may
stipulate their own inspection agencies and conditions for inspection.
• Total value. State the total contract value in words and figures, and specify
the currency.
• Terms of delivery. State the delivery terms, based on one of the Incoterms
1990. Note: a new version of Incoterms will be applicable 1 January 2000.
• Taxes, duties and charges. Clarify responsibility for all taxes. The prices
quoted by the seller may be inclusive of taxes, duties, and charges. Levies in
the country of importation (if any) may be the buyer's responsibility.

12. Contd..
• Delivery. Specify the place of dispatch and delivery. Also state whether the period
of delivery will run from the date of the contract, from the date of notification of the
issue of an irrevocable letter of credit, or from the date of receipt of the notice of
issuance of the import licence by the seller.
• Part-shipment, trans-shipment and consolidation of cargo. State whether the
parties to the contract have agreed on part-shipment or trans-shipment. Indicate
the port of trans-shipment and the number, if any, of partial shipments agreed. If
the goods are likely to be shipped under a "consolidation of export cargos"
scheme, mention this in the contract.
• Packaging, labelling and marking. Note all packaging, labelling and marking
requirements in the contract.
• Terms of payment: amount, mode and currency. When quoting different payment
terms, the exporter should specify whether the prices are based on the current rate
of exchange of in-country currency, or on the basis of another currency (such as
US dollars). Address payment terms for exchange rate fluctuations as well.
• Discounts and commissions. Speci-fy the amount of discount or commission to be
paid and by whom (by the exporter or by the importer). Stipulate the basis of
calculation of commission and rate to be applied. Discount or commission rates
may or may not be included in the export price agreed upon by the exporter and
importer.
• Licences and permits. State whether the export transaction will require any export
or import licences, and whose responsibility and expense it will be to obtain them.
Import licences may be difficult to obtain in the buyer's country.

13. Contd..
Insurance. A contract should provide for the insurance of goods against loss,
damage, or destruction during transportation. Specify the type of risk covered
and the extent of coverage.
• Documentary requirements. Documents needed for international trade
transactions fall into four categories:
- Documents for export and subsequent import of goods.
- Documents for the buyer to take delivery of the goods.
- Documents relating to payment.
- Special documents required by the nature of the goods, and conditions of
sale (e.g., certain engineering goods may involve documents relating to
construction, repair and maintenance).
Common export documents include the bill of exchange; commercial invoice
and other invoices; bill of lading or airway bill; insurance policy; and letter of
credit.
• Product guarantee. Fix and specify the length of the period of guarantee.
• Delay in delivery. Define the damages due to the buyer from the seller in the
event of late delivery owing to reasons other than force majeure.

14. Cargo insurance protects you from financial loss
due to damaged or lost cargo. It pays you the
amount you’re insured for if a covered event
happens to your freight. And these covered events
are usually natural disasters, vehicle accidents,
cargo abandonment, customs rejection, acts of
war, and piracy.

15. Benefits of
Cargo
Insurance?
It also includes these advantages for your
business:
● Your cash flow is protected from unforeseen
stoppages
● Efficient procedure of claims because of
professional service
● Simplified reporting of losses

16. Types of Cargo
Insurance
Land cargo insurance
This type insures cargo that is moved by land transportation, which
includes trucks and small utility vehicles. It covers theft, collusion
damages, and other risks involved in land freight shipping. It is also
typically used for domestic cargo since its scope is only within a
country’s boundaries.
Marine cargo insurance
This type insures ocean and air freight and it’s mainly used for
international shipping. It covers damage due to loading/unloading,
weather conditions, piracies and other risks faced by ships and
aeroplanes.
Open coverage
This covers freight for a specific period (usually for a year) and multiple
shipments can be included under one policy. This is an efficient tool to
manage risk if you ship frequently. It also has two kinds:
● Renewable. The policy can be renewed after a shipment is
delivered, making it more suited for single trips and voyages.
● Permanent. The policy can be enforced for a certain period
and allows unlimited shipments within that time frame.

17. Contd..
Single coverage
Also known as a specific coverage policy, this covers freight on
a per shipment basis and is ideal for businesses who ship
infrequently.
Contingency
There are some instances where the customer is responsible
for the insurance instead of the seller. And if the customer
receives damaged goods, they tend to avoid the liability by
refusing to accept them. The seller can ask for help from the
legal system but it is a costly procedure and he can also lose
the case.
To avoid further losses, this is the type of policy that a seller
uses even if the customer failed to insure the shipment. It is
also cheaper for the seller, who doesn’t have to inform their
customer about its application.

18. Contd..
Warehouse to warehouse
This type covers the freight once it is unloaded from the ship and is on
its way to the customer’s warehouse. It only applies to your cargo even
if it is transported with other freight in the truck.
All Risk
This type covers most causes of damaged or lost shipments, provided
that the goods are new and not inherently prone to spoiling, damage, or
loss.
However, it doesn’t include the following causes:
● Damage or loss due to acts of God (i.e. natural disasters)
● Loss or damage due to war, strikes, riots, or civil unrest
(WSRCC)
● Negligence of the importer/exporter
● Customs delays and rejections
● Unpaid goods, whether the customer fails to pay or the seller
fails to collect payment

19. What is Export
Logistics?
Logistics for export, represents the entire supply chain
channel which includes streamlining of order handling,
transportation, inventory management and handling,
storage, packaging, and clearing of the export goods
Export Logistics Process
Once the product has been cleared for dispatch from the
factory or the warehouse facility, the logistics process
formally starts. One of the first things exporters need to do
is to decide the mode of shipping and zero-in on an ocean
freight forwarder , who is responsible for arranging and
managing the transport of goods from point A to point B.
A freight forwarder maintains working relationships with
several vessel operators and even -vessel operating
carriers to secure great deals for the shipper.

20. Contd..
The next step is to arrange for a customs clearance agent for
shipping, who is responsible for ensuring all laws and compliances
with respect to export processes and the custom clearance
requirements are adhered to till the goods reach the final point of
destination. In some transactions, there may be 2 customer
clearance agents to handle local laws more effectively.
Another aspect to consider is the container shipping method. For
example, if one is shipping by sea/ocean freight export, and the
quantum of goods being shipped is not enough to fill a full container
load (also called FCL), then the shipper or exporter may have to
arrange for less than container load shipments.
The goods to be shipped must be packed in an ‘export-ready’
manner, which includes the necessary marking and labeling of the
cases, packages, or cartons. An export packing list document is
required if more than one package is to be dispatched in the lot.
The goods are then cleared from the exporter’s premises,

21. Export Logistics
Documentation
Commercial Invoice-A commercial invoice or a CI, is a document required
by the customs department in international trade transactions as proof of sale
of the given products between the buyer and the seller. It is issued by the
seller after loading or after delivery and contains the exact quantities of the
goods being shipped.
Dock Receipt - A dock receipt is a receipt issued by a shipping company as
proof of receiving the goods for shipment. A dock receipt ensures the carrier
is accountable for the safe custody of the good until it is delivered to the
destination. The bill of lading is prepared based on the dock receipt.
A bill of lading is a document issued by a carrier to acknowledge receipt of
cargo for shipment. Although the term historically related only to carriage by
sea, a bill of lading may today be used for any type of carriage of goods.
A Certificate of Origin (COO) is a document commonly used in international
trade. It establishes the country of origin of the product, which is particularly
important for an exporter claiming import duty benefits against the product(s).
It is often in the form of a statement attached to the commercial invoice, or a
separate declaration, which gives a line item-wise list of the origin of all
products.
A warehouse receipt is a type of documentation used in the futures markets
to guarantee the quantity and quality of a particular commodity being stored
within an approved facility.

22. Contd..
An inspection certificate is a document used to signify that shipped goods
have been inspected in order to certify that they conform with the terms
stated on the sales contract. It is only required on specific goods, such as
industrial equipment, perishable items, and meat.
An export license is a document issued by the appropriate licensing agency
after which an exporter is allowed to transport his product in a foreign market.
The license is only issued after a careful review of the facts surrounding the
given export transaction.
A Export Health Certificate is a document used in export transactions,
issued by the governmental organizations at the countries of origin, to certify
that a food shipment is fit for human consumption, and meets safety
standards or other required legislation for exporting.
A free-trade agreement (FTA) or treaty is an agreement according to
international law to form a free-trade area between the cooperating states.
There are two types of trade agreements: bilateral and multilateral.

24. Export house
Export house is mostly home-based organization, located
in the manufacturer’s country, which is involved in the
export of products that the manufacturer has produced.
These export houses carry out most of the export-related
activities overseas, via their own agents and distributors
who are in place in the country where the product is being
exported.
In most cases,Export houses are used by manufacturers
when the manufacturers do not want their own export
team in place, or when having an in-house team is much
more costlier rather then hiring someone from outside –
such as an export house. Because of the very nature of
this business, export houses are specially focused on the
export market and know the ins and outs of this industry
very well. This is why, in many cases, export houses are
preferred over in-house export teams.

25. Trading House
A trading house is a global B2B trader that enables the home country to trade
with foreign countries. Trading houses act as intermediaries that distribute
domestic goods and services in the international market. They are also called
Trading Companies and Export Management Companies.
These overseas marketing organizations use their infrastructure and
elaborate networks to facilitate foreign trade. Their services include buying,
selling, receiving, and delivering goods. In addition, they aid small local
enterprises to make a presence in the vast international market.
Trading houses act as sales agents; they buy from local exporters and sell in
the international market. In most cases, once the purchase is made, the local
exporters have no say in the price of the goods.
Consider this example, a local spices dealer in Singapore does not have the
reach to sell in the US, but a trading company dealing in spices can make this
possible. The trading company will buy the product from the dealer and sell it
to American retailers. Similarly, the commodity trading companies like
Glencore and Cargill facilitate the trading of physical commodities.