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Export
management

Export management

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.

NEED FOR EXPORT MANAGEMENT

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 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

Need Export management At Business Level

Export Obligation
Higher Profits
Reputation and Goodwill
Imports are liberalized
Government Incentives
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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

1. Identifying Export Products

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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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?

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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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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5. Export Pricing and Costing

Export Pricing can be determined by the following factors:

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.

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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6. Understanding of Foreign
Exchange Rates
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.

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Rate at which one countrys currency is exchanged for

another countrys

Has become a major concern for companies doing

business internationally

Changes in the exchange rate can have major

implications for profitability of international operations

7. Export Risk Management

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

8. Packing and Labeling Of Goods

Packing
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
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)

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

Letter of Credit Model

Exporter
seller
beneficiary

7. Remits payment

Exporters
bank

6. Presents documents

1. Purchase and
agreement

9. Remits
payment

Exhibit 5.6

8. Presents
documents for
negotiation

Importer
buyer
account
party

India
Overseas

3. Opens L/C

5. Shipment of goods

4. Advises of L/C

2. L/C application
10. Sends documents
11. Pays bank or gets loan

Importers
bank

Export Import (Exim) Policy

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.

Foreign Exchange Management

Act (FEMA)

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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).

EXPORT FINANCE
Commercial banks
EXPORT-IMPORT BANK OF INDIA
(EXIM BANK)
Export Credit and Guarantee
Corporation of India Ltd. (ECGC)

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