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 Team Introduction – Group 13

01 02 03

TAZRIAN TAMANNA ABDULLAH AL

TAMIMA NISHAT RINI HASSNAIN
ID: 2223032092 ID: 2223032093 ID: 2223032094
 Introduction, Getting Started,
01 Agents & Distributors

DA 02 Pricing , Marketing

EN
AG 03 Transport, Getting Paid

Miscellany
04
Conclusion
05
3
 Introduction
 International Trade
 The exchange of goods and services across foreign countries.
 Purchase, sale, or exchange of goods and services across national borders.
 Good and services -
 Sell to buyers of abroad – Exports
 Buy from buyers of abroad - Imports

4
 Export Facts & Figure

 British firm trade in every market in the world

 The UK leads the world in several fields;
 pharmaceuticals,
 aerospace,
 the creative and entertainment world,
 finance and business services
 Current exporters need to research further new markets

Properly undertaken, exporting can be both fun and profitable!

5
Export Facts & Figure(Cont.)

Top 5 Countries In Exports - Goods and Services

2020

UK
Japan 10%
China
10%
34%

Germany
21%

USA
26%

Source:
World Bank Report - 2020
6
 Why Export?

 Under used capacity

 Increase production
 Reduced unit cost
 Increase profits
 Diversity
 More prosperous market, more disposable income
 Peaks & Troughs
 Home market prone to seasonal activities
 Opportunities may exits in abroad or can be
developed

7
 Risk Factors

 Buyers are further away (usually)

 Contractual terms will have to be strictly honored
 Longer credit periods are likely to arise
 Financing and cash flow problems could occur
 Political risks, customs regulations, documentation, customer
credit-worthiness have to be addressed
 Foreign currency and exchange risks need to be understood
 Language and legal processes are different
 Transport systems/shipping arrangements need to be understood

8
 Exporting Commitment

THREE KEY REQUIREMENTS

 Management commitment to exporting
 Products or services with genuine potential
 Sufficient capacity - both production and management - to meet demands

9
 Getting Started – Desk Research

WHAT TO LOOK FOR?

Main concerns should be:
 Background to the target market, eg: economics, politics, currency
 Market size and the likely product demand
 Competitive products - quality, prices and origin - already in the market
 Tariff or import restrictions, ie: duties, quotas, taxes on imported goods
 Distribution channels and methods, eg: agents, distributors, wholesalers, retailers
 Technical standards to be met

10
 Getting Started – Desk Research
(Cont.)

WHAT TO LOOK FOR?

Other considerations will be:
 Location and number of customers/outlets
 Credit worthiness, credit terms and payment methods
 Packing and packaging for export (especially labeling regulations)
 Literature and support material (consider language problems/needs)
 Currency to be invoiced in, ie: sterling, local currency, or other, eg: Euro, US dollars
 Much of this information can be gathered from the internet or from your local Business Link

11
 Getting Started – Field Research
(Cont.)

INTERNATIONAL MARKET RESEARCH

 Involves gathering information by means of interviews and questionnaires
 More expensive than desk research
 Complements and enhances desk research
 If it is qualitative, undertaken to gauge potential customers’ attitudes

12
 Checking Competition

‘Know thine enemy’

 Competitors should be known almost as well as your own business
 There are very few products that have a uniqueness which precludes competition

13
 Getting Started – Key Issues

ACCESSIBILITY
 Which markets offer the best potential;
 what is their position on tariffs, import duty or quotas?

PROFITABILITY
 What is the pricing level for your type of product - will it produce sufficient profit on sales?

MARKET SIZE
 Is the market currently big enough or will it grow to a size to be worthwhile

14
 Getting Started – Which Product?

FIRST QUESTIONS TO ASK

 Can my firm’s product be exported as it is?
 Benefits
 No development or amendment costs
 No special components or technological contents required
 What mandatory changes could affect the product?
 Examples:
 Legal requirements, eg: minimum standards
 Tariffs
 Technical - voltage, measuring system
 Taxation policy in intended market

15
 Getting Started – Checklist

PACKING CHECKLIST
 Climatic conditions to the destination country
 Time factors: how long the product will be in the distribution
chain
 Package size

LABELLING CHECKLIST
 Manufacturer’s name
 Country of origin
 Weight
 Description of contents
 Nature of ingredients

LABELLING
 Should be written in the most appropriate language
 Usually better to have local language labels

16
 Servicing Products Overseas

You must have a proper servicing policy

Options
 Set up your own servicing operation
 Customers satisfaction your committed to their
country
 But, more expensive
 Appoint distributors to carry out the servicing
 Speed, local knowledge, lower costs
 Drawbacks:
 Need to watch their performance closely

17
 Agents & Distributors

4 TYPES OF AGENT
 Commission Agent
 Most common form of agent
 Passing orders direct to the principal who delivers to the customer
 Agency with spares and service facilities
 Carry stocks of spares
 Provide servicing and repair facilities
 Del Credere Agent
 Contractual agreement with any agency
 Stocking Agent
 Providing storage and handling facilities
 But, does not take title to the goods

18
 Agents & Distributors (Cont.)

4 TYPES OF DISTRIBUTORS
 Sole
 Only one distributor is appointed in a specific territory.
 Exclusive
 Authorized seller of the manufacturer's specific products in a
territory.
 Non-Exclusive
 Manufacturer directly sells to the territory and also have other
distributors.
 Selective
 Sold via approved dealers who have staff with specialist
skills or training.
 eg: computers, cameras, scientific equipment

19
 Pricing for Export

THREE OPTIONS
There are basically only three approaches exporters can adopt
 Competition-oriented pricing
 Mainly found in commodity markets (tea, wheat, sugar)
 Cost-oriented pricing
 A company quotes a price based on its total costs plus a percentage for
profit
 Demand-oriented pricing
 Requires an assessment of the intensity of demand

20
 Pricing for Export (Cont.)

Points to consider
 Profit maximization in the long run
 Market penetration - low prices to gain/capture market share
 Market skimming, ie: high prices at launch
 Early cash-recovery to generate cash flow

Pricing correctly is vital, and is an area which causes most

initial problems.

21
 Marketing for Export

OVERSEAS PROMOTION
Personal selling - always the best method
 Know your products, terms, prices, delivery, etc, absolutely
 Appreciate local buying systems and cultures
 Plan and cost your visits carefully
 Set yourself clear objectives

22
 Marketing for Export (Cont.)

There are many ways to get coverage in the media

 Increase public relations
 Participation in trade fairs/exhibitions
 Store promotion
 Advertising
 Provides gifts & samples

23
 Transport

FACTORS TO CONSIDER
Always check carefully which method of transport is most suitable, considering:
 Speed
 Cost
 Security
 Safety
 Efficiency

Several ways of transports are:

 By sea
 By air
 By rail
 By road

24
 Transport - Packing & Marking

PACKING
 Consult an export packing company or freight forwarder
 ‘Dangerous Goods’ will need special packing and labeling
 Carrying of fragile goods will require special packing/labeling
 Compliance with local customs regulations

MARKING
 Mark the consignment with the consignee’s name and address
 Do not indicate the contents, to prevent theft

25
 Transport
Basic Documents Required

Some basic documents are:

 By Sea
 Booking form
 Standard Shipping Note
 Bill of Landing
 By Air
 Air waybill
 By Rail, Road
 Receipt for the goods
 Contract of carriage
 Customs & excise documentation

Remember: Wrong or false data could lead to legal proceedings

26
 Getting Paid

 Invoices
 A record of goods shipped
 A means of getting payment from the importer/buyer
 Cash in advance
 This is the best system
 With new customers it is also the safest!
 Letters of credit (L/C)
 Simply an undertaking in writing by a bank to pay the exporter
 Only about 20% of world trade is conducted this way
 Bill of exchange
 A written order by the exporter to their buyer
 Payable on demand
 Open account
 Agree to accept payment on an agreed basis
 eg: 30 days from the date of invoice

27
 Getting Paid - Insurance

GUARDING AGAINST FAILURE

An exporter has three options regarding risks:
 Insure against it in full
 Insure against it in part and bear the remaining risks personally
 Bear the whole risk, acting as self-insure

Note: If you have to make a claim,

make it as quickly as possible

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 Miscellany

PRE-SHIPMENT INSPECTION (PSI)

Advice:
 Always comply
 Make sure all documents are available
 Check who will pay to restore the packing,
post-inspection

EXPORT CONTROL
Certain goods are subject to export control and need approval before
their export
Advice:
 Always have a written procedure
 Always maintain records

29
 Miscellany

INTELLECTUAL PROPERTY
 Trade mark/brand names
 Identifies the origin of a product
 Registered trade mark protects misuse of brand name
 Patents, Design and Copyright
 Understand the policy

LANGUAGE ABILITY
VERY IMPORTANT
 Handling incoming phone calls from abroad is easier
 Quick translations of correspondence will give a good idea of
its contents
 Buyers appreciate your effort and politeness in speaking their
language

30
 Conclusion

 International trade is an exchange of a good or service involving at least two different countries.

 Comparative advantage allows for gains from international trade, ultimately leading to increased
consumption of goods

 Economic theory indicates that international trade raises the standard of living

“Trade is central to ending global poverty”

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Any Questions?

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 O U
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