UNIT 1

EXPORT MARKETING

EXPORT MARKETING

R. L. Kramer – “Export marketing involves

export business with individuals, firms,

organisations and/or government entities in

other countries”

“Export marketing involves marketing of

goods and services beyond national

boundaries”

FEATURES OF EXPORT MARKETING

Systematic Process

Customer Focus

Large Scale Operations

Dominance of MNCs

Trade Barriers

Trading Blocs

Subject to Regulations

Marketing-Mix

International Marketing Research

Three-faced Competition

Spreading of Risks

Reputation

NEED & IMPORTANCE OFEXPORT MARKETING

FROM THE POINT OF VIEW OF NATION

Foreign Exchange

International Relations

Balance of Payments

Reputation in the world

Employment Opportunities

Financing of Development Plans

Research and Development

Optimum Utilisation of Resources

Spread Effect

Higher Standard of Living

NEED & IMPORTANCE OFEXPORT MARKETING

FROM THE POINT OF VIEW OF BUSINESS ORGANISATION

Reputation

Optimum Production

Spreading of Risk

Export Obligation

Keeping Alive Old Brands

Improvement in Organisational Efficiency

Improvement in Product Standards

Liberal Imports

Higher Prices

Financial and Non-financial Benefits

FUNCTIONS OFEXPORT MARKETING

International Marketing Research

Product Research and Development

Export Financing

Export Production

Product Packaging

Pricing

Branding

Advertising

Sales Promotion

Export Risks Management

Other Functions

PROBLEMS INEXPORT MARKETING

Problems of Trading Blocs

Three-faced Competition

Trade Barriers

Different Currencies, Weights and Measures

Custom Formalities

Documentation Formalities

Difficulties of Distance

Diverse Languages, Customs and Traditions

High Risks and Uncertainties

Foreign Exchange Regulations

STRATEGY FOREXPORT MARKETING

Selection of local products suitable for overseas buyers

Development of product strategy in packaging

Intensive marketing strategy as heterogeneous overseas markets

Convenience of buyers while designing a product

Finding out established channels of distribution

STRATEGY FOREXPORT MARKETING

Selection of right sales promotional schemes

Emphasis on product quality

Availability of regular information flows

Developing suitable brand name

Developing personal relations with foreign

buyers

PREPARATION FOR EXPORT MARKETING

1. Selection of Product

2. Designing the Product

3. Product Positioning

4. Selection of Markets

5. Selection of Buyers

6. Negotiations with Overseas Buyers

7. Appointment of Overseas Agents

8. Methods of Exporting

SELECTION OF PRODUCT

Factors need to be considered

Demand for the Product

Nature of Consumers

Degree of Competition

Government Incentives

Attitude of Buyers

Production Capacity/Product Availability

SELECTION OF PRODUCT

Factors need to be considered

Import Restrictions

Export Restrictions

Future Potential

Product Adaptation Costs

Expected Returns

Servicing Facilities

DESIGNING THE PRODUCT

Options

Product Standardization

Product Adaptation

Product Innovation

DESIGNING THE PRODUCT

Product Standardization

Selling an identical product in all counties

“One Product, One Message – Worldwide”

Coca Cola, Rayban Sunglasses, Rolex watches

Least expensive

Economies of scale –both in production and marketing

Enables to earn good name

Possible if more or less same likes, dislikes, preferences, habits and tastes of buyers in

different countries

DESIGNING THE PRODUCT

Product Adaptation

Modification in product as per the needs of local conditions, tastes, likes, dislikes

May change brand name from market to market

Nestle – 100 varieties of Nescafe

Greater costs both in production and marketing

May also result in greater profit

Suitable when product performs the same function but use conditions are different

DESIGNING THE PRODUCT

Product Innovation

New item introduced for foreign markets

Low cost item for developing countries; high cost item for developed nations

Backward invention or Forward invention

Backward invention – reintroduction of earlier product forms

Forward invention – developing a new product

PRODUCT POSITIONING

Perception of consumer for brand vis-à-vis competing brands

Consists two things

How we want the consumer to perceive the brand

How the brand will be perceived in relation to other brands

Importance

Develops brand image

Creates Demand

Helps to face competition

Facilitates Customer’s choice

Higher Sales

Goodwill

PRODUCT POSITIONING

Steps in product positioning

Identify competitive differences – product, service, personnel, image

Analysis of differences – benefits and costs

Short listing the differences – more impact on consumers

Detailed Investigation – customer survey

Selecting Important Differences

Developing Positioning Strategy

Communicating the Company’s Positioning

Follow up of positioning

SELECTION OF MARKETS

Determine Export Marketing Objectives

Collection of Information

Analysis of Information

Short Listing of Markets

Detailed Investigation of Short Listed Mrkets

Selection of Markets

Entry in Overseas Markets

Follow-up

SELECTION OF BUYERS

Obtaining Buyers’ Addresses

Collection of Buyers’ Information

Analysis of Information

Short Listing the Buyers

Preliminary Contacts

Trade Discussions with Overseas Buyers

Obtaining Orders

Supply of Goods

Follow up

NEGOTIATIONS WITHOVERSEAS BUYERS

Price of Goods

Credit Period

Delivery Schedule

Product Features

Product Warranties

After Sale Service

Contract Period

Additional Facilities

APPOINTMENT OF OVERSEAS AGENTS

Obtaining Agents’ Addresses

Collection of Agents’ Information

Analysis of Information

Short Listing the Agents

Preliminary Contact with Agents

Negotiations with Agents

Agency Contract

Follow up