Export management involves conducting export activities efficiently and profitably. It requires identifying suitable export products, selecting target markets through SWOT analysis, obtaining necessary licenses, understanding pricing and costs, managing risks like currency fluctuations, and ensuring proper packaging and labeling. Key considerations at the national level include earning foreign exchange, employment, and economic growth. At the business level, export management aims to increase profits, reputation, and take advantage of government incentives through orderly management of the export marketing process. Tools like letters of credit, drafts, and bills of lading aid in international trade transactions by facilitating payment and transport documentation.
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Export management means conducting the
export activity in an orderly, efficient and
profitable manner.
Since the heart of each business is marketing,
export management can be termed as export
marketing management. Because it needs to be
managed efficiently so that the export should
increase and exporter should get more profit and
importer should get more satisfaction.
Export management means managing export
marketing activity efficiently, smoothly and in an
orderly manner.
Export management
3. We can discuss the need for export
management at two different levels.
(A) At the National level.
(B) At the Business level.
NEED FOR EXPORT MANAGEMENT
4. Need For Export Management At The National
Level
Earning foreign Exchange
International Relations
Balance of payments
Reputation in the World
Employment
Research and Development
Standard of Living
Economic Growth
6. Export management
1. Identifying Export Products
2. Market Selection
3. SWOT Analysis
4. Export License
5. Export Pricing and Costing
6. Understanding of Foreign Exchange Rates
7. Export Risk Management
8. Packing and Labeling of Goods
7. 1. Identifying Export Products
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The product should be manufactured or sourced with consistent
standard quality, comparable to your competitors
If possible, avoid products which are monopoly of one or few suppliers
The price of the exported product should not fluctuate very often -
threatening profitability to the export business.
Strictly check the government policies related to the export of a
particular product
Carefully study the various government incentive schemes and tax
exemption like duty drawback and DEPB.
Seasonal vagaries of selected products
Keep in mind special packaging and labeling requirements of
perishable products like processed food and dairy products.
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8. 2. Market Selection
Market selection process requires a broad range of information
depending upon the products or services to be exported, which
includes:
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The demand for product/service.
The size of the potential audience.
Whether the target audience can afford product.
What the regulatory issues are that impact on exports of product.
Are there appropriate distribution channels for product/service?
The environment for doing business – language, culture, politics
etc.
Is it financially viable to export to selected market?
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9. 3. SWOT Analysis
• SWOT analysis is a useful method of
summaries all the information generated
during the export planning. SWOT stands
for strengths, weakness, opportunities
and threats, which helps to isolate the
strong and week areas within an export
strategy. SWOT also indicates the future
opportunities or threats that may exist in
the chosen markets and is instrumental in
strategy formulation and selection.
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10. 4. Export License
• Export license are only issued for
the goods mentioned in the
Schedule 2 of ITC (HS)
Classifications of Export and Import
items.
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11. 5. Export Pricing and Costing
Export Pricing can be determined by the following factors:
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Range of products offered.
Prompt deliveries and continuity in supply.
After-sales service in products like machine tools, consumer
durables.
Product differentiation and brand image.
Frequency of purchase.
Presumed relationship between quality and price.
Specialty value goods and gift items.
Credit offered.
Aggressive marketing and sales promotion.
Unique value goods and gift items.
12. Export Costing
• Export Costing is basically Cost
Accountant's job. It consists of fixed cost
and variable cost comprising various
elements. It is advisable to prepare an
export costing sheet for every export
product.
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13. 6. Understanding of Foreign
Exchange Rates
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An exporter without any commercial contract is
completely exposed of foreign exchange risks that arises
due to the probability of an adverse change in exchange
rates.
Therefore, it becomes important for the exporter to gain
some knowledge about the foreign exchange rates,
quoting of exchange rates and various factors
determining the exchange rates.
Rate at which one country’s currency is exchanged for
another country’s
Has become a major concern for companies doing
business internationally
Changes in the exchange rate can have major
implications for profitability of international operations
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14. 7. Export Risk Management
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The various types of export risks involve
in an international trade are as follow
Credit Risk
Poor Quality Risk
Transportation Risks
Logistic Risk
Legal Risks
Political Risk
Unforeseen Risks
Exchange Rate Risks
15. 8. Packing and Labeling Of Goods
Packing
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The primary role of packaging
is to contain, protect and
preserve a product as well as
aid in its handling and final
presentation.
Packaging provides following
benefits
Physical Protection
Containment
Marketing
Security
Labeling
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Labeling on product provides
the following important
information:
Shipper's mark
Country of origin
Weight marking (in pounds
and in kilograms)
Number of packages and size
of cases (in inches and
centimeters)
Handling marks (international
pictorial symbols)
16. Tools used to aid transactions
Letters of Credit (LOC)
Bank guarantee on behalf of importer to
exporter assuring payment when exporter
presents specified documents
Drafts (Bill of Exchange)
Written order exporter, telling an importer to
pay a specified amount of money at a
specified time
Bill of Lading
Issued to exporter, by carrier. Serves as
receipt, contract and document of title
17. Letter of Credit Model
Exhibit 5.6
Exporter
seller
beneficiary
Importer’s
bank
Importer
buyer
account
party
Exporter’s
bank
7. Remits payment
6. Presents documents
10. Sends documents
11. Pays bank or gets loan
4. Advises of L/C
India
Overseas
2. L/C application
5.
Shipment
of
goods
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Purchase
and
agreement
9.
Remits
payment
8.
Presents
documents
for
negotiation
3.
Opens
L/C
18. • Export Import Policy or better known as Exim Policy is a
set of guidelines and instructions related to the import and
export of goods. The Government of India notifies the
Exim Policy for a period of five years . The Export Import
Policy is updated every year on the 31st of March and the
modifications, improvements and new schemes become
effective from 1st April of every year. All types of changes
or modifications related to the Exim Policy is normally
announced by the Union Minister of Commerce and
Industry who coordinates with the Ministry of Finance, the
Directorate General of Foreign Trade and its network of
regional offices.
Export Import (Exim) Policy
19. Foreign Exchange Management
Act (FEMA)
• Foreign Exchange Management
Act or in short (FEMA) is an act that
provides guidelines for the free flow
of foreign exchange in India. It has
brought a new management regime
of foreign exchange consistent with
the emerging frame work of the
World Trade Organization (WTO).
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20. EXPORT FINANCE
• Commercial banks
• EXPORT-IMPORT BANK OF INDIA
(EXIM BANK)
• Export Credit and Guarantee
Corporation of India Ltd. (ECGC)
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