Export-Import Management (520135)

Chapter – 02
(Finding Export Market & Foreign Suppliers for Import)
Lecture- 06

Conducted By :
Lata Akter
Lecturer
Department Of Business Administration
Dhaka City College
 Topics to be discussed……..

 Selecting The Right Export Commodity

 Considering Factors for Product Selection

 Sources of Specific Product Information

 Consideration of Cultural Issues

 Mode of Entry to Export Market

 Selecting The Right Export Commodity

An entrepreneur should select the right product for export because

selection of the right export product is crucial for success in export
business. A key factor in any export business is clear understanding
and detail knowledge of products to be exported. The selected product
must be in demand in the countries where it is to be exported.The
selection can be made on the basis of consideration of various factors.
Considering Factors for Commodity/Product Selection

1) Trends in Exports
2) Production Capacity & Product Availability
3) Product Adaptability
4) Demand in the Potential Export Markets
5) Trade Restrictions
6) Incentives/Facilities Offered for Export
7) Shifting Spending Patterns
8) Quality & Niche Marketing
 Sources of Specific Product Information
1) Personal experience
2) Libraries and seminars
3) Trade journals and trade planning strategy
4) Senior of fellow salesmen
5) Manufacturers’ literature and assistance
a) Motion Pictures and visual aids etc.;
b) Education and training programs ;
c) Questionnaire for event management;
d) Travelling instructor;
e) Salesman’s portfolio ; f) Meetings g) Conferences
 Market Factor Assessment

Market factor assessment is a detailed and objective evaluation of

the potential of a new product, new business idea or new investment.
It is a comprehensive analysis of environment forces, market trends,
entry barriers, competition, risks, opportunities and the company's
resources and constraints.
 Market Factor Assessment

1. Demographic and physical environment

2. Political environment
3. Economic environment
4. Social and cultural environment
5. Market access
6. Product potential
 Consideration of Cultural Issues
It is essential that companies take into account the lifestyles and culture of countries to which they are
considering exporting.
1. Material culture :
This includes the technological goods used by the majority of the population, personal transport
(including car ownership) and the availability of resources such as electricity, natural gas,
telephone, Internet and wireless communication.
2. Cultural preferences:
Each international market will have varying preferences for products, foods, product/food quality
levels, and even brands. The meaning of shapes, colors and iconic features can also have
different cultural significance. These cultural differences must be taken into account.
3. Languages :
The languages spoken and used in a country have an impact on marketing, brand names, the
collection of information through surveys and interviews, advertising and the conduct of business
relationships. Languages might vary between regions of a country, and some countries have more
than one official language.
 Consideration of Cultural Issues
[Cont…………]
4. Education :
The typical level of completed education in a region can indicate the quality of a potential work
force and the status of consumers.
5. Religion:
Religion is a major cultural influencer that can affect many aspects of life, including the role of
women in society, rules about food and beverage consumption, clothing habits and holiday activities.
6. Ethics and values:
These can have an impact on international business, especially when conducted from within another
country. However, it is important for researchers to remember that the same ethics and values are not
held by everyone in a target market.
7. Social organization:
The composition of family groups, the prevalence of special-interest groups and attitudes toward
them, racial diversity and recreational lifestyles are all important to consider when a country is being
investigated as a potential export market.
 Mode of Entry to Export Market
1. Joint venture:
A joint venture consists of two companies establishing a jointly-owned business. One of
the owners will be a local business (local to the foreign market). The two companies
would then provide the new business with a management team and share control of the
joint venture.
2. Licensing:
Licensing allows another company in your target country to use your property. The
property in question is normally intangible – for example, trademarks, production
techniques or patents. The licensee will pay a fee in order to be allowed the right to use
the property.
3.Franchising:
Franchising is somewhat similar to licensing in that intellectual property rights are sold
to a franchisee. However, the rules for how the franchisee carries out business are usually
very strict – for example, any processes must be followed, or specific components must
be used in manufacturing.
 Mode of Entry to Export Market
[Cont……]
4. Foreign direct investment:
Foreign direct investment (FDI) is when you directly invest in facilities in a foreign market. It
requires a lot of capital to cover costs such as premises, technology and staff. FDI can be done either
by establishing a new venture or acquiring an existing company.

5. Wholly owned subsidiary:

A wholly owned subsidiary (WOS) is somewhat similar to foreign direct investment in that money
goes into a foreign company but instead of money being invested into another company, with a
WOS the foreign business is bought outright. It is then up to the owners whether it continues to run
as before or they take more control of the WOS.
6. Exporting
Exporting is the direct sale of goods and / or services in another country. It is possibly the best-
known method of entering a foreign market, as well as the lowest risk. It may also be cost-effective
as you will not need to invest in production facilities in your chosen country – all goods are still
produced in your home country then sent to foreign countries for sale. However, rising
transportation costs are likely to increase the cost of exporting in the near future.
Thank You