Questions:
1. What is meant by the ‘business and market environment’ of a target market? What kind of information would an exporter need to collect to understand this?
2. What is meant by the concepts ‘market segmentation’ and distribution channels’? What kind of information would an exporter need to collect to understand these?
3. What are the financial issues, export practicalities and technicalities that an exporter would need to know about to in the context of developing an export strategy?
Answers:
Introduction
New business is coming up in the market every day. Competition is increasing day by day and businesses need to come up with new ideas in order to stay ahead of their competitors. Marketers take in several methods in order to do so. They have to watch every segment of the market carefully and make careful decisions. The market environment is being analyzed by the marketers and steps are taken accordingly. Marketers get to know what is in trend and what not. They have to select the best possible distribution channel so that their products don’t get waste. The financial issues, the technical issues, all are taken care of for proper working of the business and in achieving the goals of the company. Exporting of goods is usually the shipping of goods and service outside the port of the country to delivers it to some other country. The seller of the goods or service is termed as exported whereas the buyer is termed as importer. This project is going to reflect several questions regarding export and marketing of the company.
1. The business and the market environment of a target market can be understood and judged by many different analytical processes though the main analysis needed to judge and penetrate the target market is known as the PESTLE analysis. The business environment of a target market considers the way and how of the business has been operating and how the market has been reacting to it (Schrier, 2010). The PESTLE analysis included all of the important categories needed to judge the target market except for the ethical considerations and happenings. The PESTLE analysis when de-categorized expands into many quarters with the P denoting for the political aspects, the E denoting the economical aspects, the S denoting the social aspects, the T denoting the technological aspects, L denoting the legal and law aspects and finally the E denoting all the environmental aspects of the targeted market i.e. when every aspect is taken into consideration a plan or idea can be created to penetrate the market easily and have a stable future tackling the foreseeable and the unforeseeable problems of the economy and the general market. The PESTLE analysis can play a crucial part for any company entering any sort of industry just like the SWOT or any such marketing tool.
The kind of information an exporter would need to collect in understanding and judging the targeted market would be all the aspects of the PESTLE analysis. First, the exporter would need to collect information relating to the political aspect of the targeted market which would be how much the government interferes in the targeted industry with new laws, trade tariffs and other such factors (Pride, Hughes & Kapoor, 2000). The exported would be needed to collect information on the latest taxes and other costs on exports of goods and what are the labor protection laws in order to follow them. Second, the exported would need to collect information on the economic factors such as the new Exchange rates and if it’s likely to appreciate or depreciate and if the exporting business has been showing growth in the last few years. These factors are crucial to any industry as it has direct impact on the companies and have huge effects on them. Third, the exported needs to find information on the social aspects as these factors determine the market environment. The exporter can collect information on the new trends or the age of the people of the targeted market in this case the people whom the goods will be exported and their latest demands and ideas on the goods. Fourth, the exporter needs to explore the technological aspect as the innovations adds growth and simplicity to the company. These can be new machines fastening the export system or basic automation improvements. Fifth, the legal aspects of the environment of the company which has both internal and external impact on the company. The exporter needs to take in plan the laws and the legislations which may harm the company if not followed such as the safety standards of the goods being exported. Lastly the Sixth factor which needs to be considered by the exporter would be the environmental aspect of the targeted market such as the global changes or the environmental offsets which may harm the demand of the goods being exported (Hawkins, Coney & Best, 2008).
2. Market Segmentation is basically used as a marketing strategy to divide the whole market into many sub-groups of different categories of the economy who are known to have the same priorities, needs or interests. Market segmentation is important as the exporter needs to understand the demands of the customers which will help him penetrate the targeted market better. Distributing channels can be defined as the chain of the company in which the good or the finished product is being processed right from the beginning till the end where it reached the customer. In this case, the distributing channel may be the methods of the goods being exported from the warehouse and therefore being delivered to the customer (Griffin & Ebert, 2011). There can be many distributing channels which the exporter may use such as the exporter can display ads and list the company at many social websites and other places where it can gain publicity and the people may gain interests in it and demand more of the exported good. The ads which would be listed on these sites when being clicked upon by the customers would redirect them to the home page of the exporter’s company where the consumer can look at the variety of goods available at ease saving their time and increasing the sales of the company. The exporter can invests in these social sites and other forms of e-news to increase its publicity and can also recover these costs by exporting the goods on a lower cost at a higher quantity (Ferrell & Hartline, 2005). The exporter can also make use of the branded famous retail stores to sell those goods as increase their exports as the famous retail store would expand and distribute the goods throughout the country and sell them with a good profit. Many private companies are always on the lookout for new small exporting company and so a deal/contract could be signed between the private company and the exporter for a period of time which would state that the company would receive commission or other sources of profit when it reaches out to more customers in the importing countries increasing sales and exports. Many unemployed labors can be employed in the importing countries to sell their goods and advertise about it to the locals on a commission on each product sold in the country by them. The exporter can use the power of the social media and the internet to sell, advertise with the minimum risk and effective cost (Deardorff, 2006). The transactions and many other deals can be done easily with the process of online payment as it has no risk and provides secure payments. Other forms of high investment ideas can be used such as setting up their own shops or warehouses in the highest importing countries which would expand their business by a large amount and leading to more distributing channels.
3. The exporting business may suffer if the financial issues, export practicalities and technicalities are not considered properly. There can be many financial issues such as lack of knowledge in handling of the funds generated like the exporter is earning a lot of money but isn’t able to handle all the money and the excitement that comes with it and invests or takes a wrong step which creates a big hole in the financial situation of the exporting company. The exporter may get deviated from its plan and idea by being manipulated by the rival’s investments in unnecessary equipment and labor leading to a major loss for the company. Other financial issues that the exporter needs to take into consideration are the pricing of the goods, planning on the available funds and the payment methods that will be available to the consumers while purchasing (Cotton, Falvey & Kent, 2000). There are also many export practicalities that an exported needs to take into consideration such as the timings of the goods being delivered, the holidays on which the labor force might not come to work, the general problems faced in exporting of the goods to other countries such as loss of goods at the airport or any other part in the processing. The exporter needs to focus on other factors such as labelling on the goods as required, the packaging and the handling of the products by class and fragile level, proper instructions and the space of the warehouse (Bradley, 2001). The exporter may need to keep an eye on the customs of the country for goods that are being returned due to lack of customer satisfaction. The transportation and the shipment of the goods from the warehouse to the consumer’s front door needs to be thoroughly checked and tested. The exporter needs to be in position of the proper license and the codes of conduct of the commodity and must abide by the terms of trade. There must be proper documentation of the goods that are entering their respective countries such as the airway bill, certificate of carrier and the exporter must distinguish the goods into two categories which would be the fast delivery and the normal delivery. The exporter must also be aware of other common issues such as the risk of the goods being damaged due to various reasons and so proper insurance policies must also be noted and kept. The exporter must have a different account of settlements which would include the payment done to register the goods (VAT), and duty at the arrival of the origin in other country. Most importantly the exporter should declare his goods in the terms of EORI and the CHIEF.
References
- Bradley, F. (2001).International marketing strategy. New York: Prentice Hall.
- Cotton, D., Falvey, D., & Kent, S. (2000).Market leader. Harlow: Longman.
- Deardorff, A. (2006).Terms of trade. Hackensack, NJ: World Scientific.
- Ferrell, O., & Hartline, M. (2005).Marketing strategy. Mason, Ohio: Thomson/South-Western.
- Griffin, R., & Ebert, R. (2011).Business. Englewood Cliffs, N.J.: Prentice Hall.
- Hawkins, D., Coney, K., & Best, R. (2008).Consumer behavior. Dallas, Tex.: Business Publications.
- Pride, W., Hughes, R., & Kapoor, J. (2000).Business. Boston: Houghton Mifflin Co.
- Schrier, D. (2010).Exports. [Victoria]: BC Stats.
