EXPORT MARKETING

MODULE 1
Dr. Kavita Kalkoti
Professor and Head,
Department of Commerce
 EXPORT MARKETING
Module I
Introduction To Export Marketing

Module II
Foreign Market Entry Strategies

Module III
Global Framework for Export Marketing

Module IV
Export Marketing and Promotional Organisations in India
Introduction To Export Marketing
A. Concept and features of Export Marketing, Importance of Export
Marketing, Difference between Domestic Marketing and Export
Marketing
B. Factors Influencing Export Marketing, Prospects and Challenges of
Export Marketing in India
C. Foreign Trade Policy (FTP 2014-19 as and when unveiled by the new
government) - Highlights, Negative List, Export incentives,
assistance and schemes extended to the Indian exporters - Duty
Drawback, EPCG Scheme, MDA, MAI, ASIDE, IRMAC, Freight
 INTRODUCTION TO EXPORT MARKETING
•Export Marketing is a process of all activities involved in
exchange of goods and services beyond national
boundaries

•We define “Export Marketing means marketing

(exchange) of goods & services beyond national
boundaries”

•R.L Kramer defines “Export marketing involves export

business with individuals, firms, organizations and/or
govt. entities in other countries”
 Features
1. Large Scale Operations
2. Identifying needs and wants
3. Marketing ideas, goods and services
4. It is a process
5. Three-Faced Competition
6. Exchange Regulations
7. Dominance of MNCs
8. Trade Barriers – Tariff & Non- Tariff Barriers
9. Rules, Regulations and Risk
10. International Forums
11. Presence of Trading Blocs
12. Spreads Risk
 Three Faced Competition
•Other Suppliers of Exporter’s country

•Local Producers of Importer’s country

•Exporter’s from Competing countries

 CAR COMPANYS
• Other Suppliers of Exporter’s country –

• Local Producers of Importer’s country –

• Exporter’s from Competing countries –

• LIMITED TRIPS
 Importance of Export Marketing
•From View point of Nation
1. Foreign Exchange
2. International Relations
3. Balance of payments
4. Reputation in the world
5. Employment opportunities
6. Research & development
7. Optimum utilisation of resources
8. Spread effect
9. High standard of living
• FIBRE ROSH
 Importance of Export Marketing
•From View point of Business firm
1. Reputation
2. Optimum production
3. Spreading of risk
4. Export obligation
5. Keeping alive old products
6. Improvement in technology / profit
7. Improvement in product standard and efficiency
8. Liberal imports
• ROSE KIIL
 Comparison of
Internal/Domestic/Home
and
International / Export / Global Marketing
1. Meaning
2. Exchange of Goods and Services
3. Language/ Culture
4. Trading Blocs
5. Currency
6. Risk in Trade
7. Influence or control of government
 Comparison of
Internal/Domestic/Home
and
International / Export / global Marketing
8. Scale of operations
9. Procedure
10. Competition
11. Realisation of sales proceeds
12. Incentives
13. Spread of risk
14. Payment methods
• MELT CRISP CRISP
How One Ship Caused a Global Traffic Jam
[Link]
Factors affecting or influencing Export Marketing/
Motivation for Exports
FIRM SPECIFIC MOTIVATORS/ FACTORS
•Profit
•Product Development cost
•Product Life cycle
•Power of monopoly
•Production and sales stability
•Product Strategic Vision
6P’s
Factors affecting or influencing Export Marketing/
Motivation for Exports
FIRM SPECIFIC MOTIVATORS/ FACTORS
•Profit
•Product Development cost – technology or skills required
may be costly in the home country
[Link]
o-product-development-in-fashion/
•Product Life cycle
•Power of monopoly
•Production and sales stability
•Product Strategic Vision
6P’s
Factors affecting or influencing Export Marketing/
Motivation for Exports
EXTERNAL ENVIRONMENT MOTIVATORS/ FACTORS
• Competition in domestic market
• Incentives of government
• Domestic Market Constraints
• WTO
• Information and media explosion
• Free trade agreements
• Economic growth
CID WIFE
 Prospects of Export Marketing in India

• Strong and stable government

• Positive economic policies
 Prospects of Export Marketing in India

How Bengaluru became India's rose capital | 10 interesting facts | Bengaluru Rose Export

[Link]
 Challenges in Export Marketing in India
1. Matching needs of global consumers
2. Achieving global competitiveness
3. Limited importance to exports of services
4. Limited attention to advertising and sales promotion
5. Poor contribution of agriculture and allied products
6. Impact of globalisation
7. Challenges related to infrastructure facilities
8. Social Responsibility and ethics of corporates (CSR)
9. Marketing through new technologies
10. Relationship marketing
11. Problems created by trading Blocs
MALL PICS MRP
Foreign Trade Policy
MAIN OBJECTIVES OF INDIA’S FOREIGN TRADE POLICY

The government of India introduces the Export-Import Policy, normally for a

period of five years.
The EXIM policy provides a list of initiatives and procedural guidelines for
exporters and importers.
In 2004, the Government of India renamed the EXIM policy as Foreign Trade
Policy.
OBJECTIVES OF EXIM POLICY OF INDIA
• Strengthen Export Production
• Streamline Procedures
• Technical Upgradation
• Import Substitution
• Employment Generation
• Export incentives
• Standards of Quality
• Frame work for Globalisation
SEZs set up by the Central Government
Highlights of FOREIGN TRADE POLICY OF INDIA [Link]
NEGATIVE LIST OF EXPORTS
• Negative list of exports contains those items which are either banned
or cannot be freely exported.
• The negative list of export consists of these Parts:
PART I – PROHIBITED ITEMS
PART II – RESTRICTED ITEMS
PART III – CANALISED ITEMS
 PART-1- PROHIBITED ITEMS
The prohibited items are banned from exporting.
The latest list of prohibited items as on 1.1.1996 contains 10 items.
The items are:
• All forms of wild animals.
• Exotic Birds.
• All items of plants.
• Human Skeletons.
• Tallow, fat, and/or oils of any animal’s origin.
• Chemicals as notified by DGFT.
• Sandalwood items as notified by DGFT.
• Red sanders wood in any form.
 PART-2- RESTRICTED ITEMS
Restricted items are allowed to be exported only with special licensing by the DGFT
At present, there are 31 items.
Some of restricted items exported are as follows:
• Cattle.
• Camel.
• Chemical fertilizers.
• Fabrics/Textiles items with imprints of excerpts or verses of the Holy Quran.
• Deoiled Groundnut cakes.
• Fresh and Frozen silver pomfrets of weight less than 300 grams.
• Fodder, including wheat and rice straw.
• Hides and Skins as mentioned in the policy.
 PART-3- CANALISED ITEMS
The list contains those items which are to be exported only through designated
canalized agencies.
At present there are 5 items which are canalised.
They are:

ITEMS CANALISING AGENCY

[Link] products Indian Oil corp. Ltd.
[Link] Karaya The Tribal Cooperative Marketing Federation f
India Ltd.(TRIFED)

[Link] waste and Scarp MMTC and MITCO

[Link] ores and Concentrates Indian Rare Earths ltd, Kerala minerals &
metals Ltd. MMTC and MOIL

[Link] Seeds. NAFED, TRIFED and 2 others.

 Export Incentives, Assistance And Schemes extended to Indian
Exporters
•DBK : All industries rates, Special Brands rates, by govt. but special app
•EPCG
•Market Development Assistance : 25% to 60% Eh/TH/STH/SSTH :
Market surveys adv. Showroom
•Market Access Initiative (MAI) : Market study, R & D etc.
•ASIDE
•IRMAC Scheme
•Other financial benefits : Freight , rebate, etc.
•Exemption from excise duty
•Exemption from Income tax duty : under Sec 80 HHC
•Exemption from Sales Tax
 Duty Drawback (DBK)
• DBK means refund of Custom duties paid on the import of raw materials components and packing material.
• DBK also involves refund of central excise duties paid on indigenous material used in the manufacture of
export products.
• Duty exemption schemes enable duty free import of inputs required for export production.
• Drawback is available on the following items:
• Raw materials and components used in the process of manufacture.
• Materials used in the manufacture of raw materials and components used in the manufacture of finished
products.
• Irrecoverable wastages which arises in the process of manufacturing.
• Material used for packing the finished export products.
• Finished products.
• DBK is not admissible if the:
• Amount of drawback entitlement is less than RS. 50/-.
• Goods have been taken into use after manufacture, except tea chest used as packing materials for export of
blended tea.
• Goods are produced using imported materials or excisable materials in respect of which duties have not
been paid.
• Products manufactured by 100% EOUs and units located in FTZs/EPZs.
• Amount of drawback is less than 2% of net FOB value of exports.
 Rates of Drawback:
• There are two rates of duty drawback:
1. All industry rates
• These rates are applicable to all units in the industry. For example, if the government declares 20% DBK
for textiles then all units in the textile industry can get 20% DBK
2. Special brand rates
• These rates are provided by the government on the special application made by a particular unit.
• Procedure to Claim DBK:
• Whom to Apply: The application need to be made to the nearest customs house.
• When to Apply: Application must be made within a period of 60 days from the date of obtaining “Let
Export Order” from the customs examiner.
• What documents required: The application must be supported by the following documents.
• Non – negotiable copy bill of lading
• A copy of duty drawback.
• A copy of commercial invoice.
• A copy of special brand rate letter, if required.
• Other required documents.
Export Promotion Capital Goods (EPCG) Scheme
• Capital goods (CG), both new and second hands, may be imported under the EPCG scheme. Capital
goods (including spares up to 20% of the CIF value of the capital goods), may be imported at a
concessional rate of 3% customs duty or zero duty subject to Export obligation (EO) to be fulfilled over a
period of time. The zero duty import of capital goods under EPCG scheme is continued under FTP
2015-20.
• Export obligation under EPCG scheme.
• The export obligation under the EPCG scheme has been modified as per FTP 2009-14. Capital goods
including goods spares as well as computer systems can be imported at 3% customs duty or zero duty
subject to an export obligation as follows.
• 8 times of duty saved on capital goods imported to be fulfilled over a period of 8 years starting from the
issue date of EPCG license in case of 3% duty and 6 times over a period of 6 years in case of zero duty.
• EPCG licenses with a CIF value of’ 100 crore or more, the same export obligation shall be required to be
fulfilled over a period of 12 years instead of 8 years.
• Units in agri – export zones and companies under the revival plan of BIFR board for industrial and
financial reconstruction, can fulfill the export obligation over a period of 12 years instead of 8 years.
Marketing Development Assistance (MDA)

The Marketing Development Assistance (MDA) Scheme is intended to provide financial

assistance for a range of export promotion activities implemented by export promotion
councils, industry and trade associations on a regular basis every year.
As per the revised MDA guidelines with effect from 1stApril,2004 assistance under MDA
is available for exporters with annual export turnover upto Rs 5 crores.
These include participation in Trade Fairs and Buyer Seller meets abroad or in India,
export promotion seminars, etc
Further, assistance for participation in Trade Fairs abroad and travel grant is available to
such exporters if they travel to countries in one of the five Focus Areas, such as , Latin
America, Africa, ASEAN countries, Australia and New Zealand.
For participation in trade fairs, etc, in other areas financial assistance without travel
grant is available.
Market Access Initiative
Activities eligible for financial assistance under the scheme.
• Marketing projects abroad
• Capacity building - training, and quality up gradation.
• Market studies
• Project development
• Developing foreign trade facilitation web portal
• Support for cottage and handicrafts units.
For instance, under the Marketing Project Abroad, the following Are the activities that are funded
• Opening of showrooms.
• Opening of warehouses.
• Display in international Dept. stores.
• Publicity campaign and Brand promotion.
• Participation in trade fair etc. abroad.
• Research & product development.
• Registration charges for product registration abroad
• Testing charges for engineering products abroad.
Assistance to States for Infrastructure Development of Exports (ASIDE)

The State Governments shall be encouraged to participate in promoting

exports from their respective States. For this purpose, Department of
Commerce has formulated a scheme called ASIDE.
Suitable provision has been made in the Annual Plan of the Department of
Commerce for allocation of funds to the states on the twin criteria of gross
exports and the rate of growth of exports.
The States shall utilise this amount for developing infrastructure such as
roads connecting production centres with the ports, setting up of Inland
Container Depots and Container Freight Stations, creation of new State level
export promotion industrial parks/zones, augmenting common facilities in
the existing zones, equity participation in infrastructure projects,
development of minor ports and jetties, assistance in setting up of common
effluent treatment facilities, stabilizing power supply and any other activity as
may be notified by Department of Commerce from time to time.
Industrial Raw Material Assistance Center
(IRMAC)
Benefits of raw materials assistance scheme.
• Lower prices
• Credit period
• Quality raw materials
• Focus on production
• Timely availability of materials