TYBCOM – SEM V – Export Marketing – Module 1
TYBCOM – SEM V – (AEC) – Export Marketing
Module – 1 Introduction to Export Marketing
1. Define Export Marketing. Explain its features.
2. Discuss the importance of exports for a nation.
3. Explain the importance of exports for a firm.
4. Distinguish between domestic marketing and export marketing.
5. What are the factors influencing export marketing.
6. What are the risks involved in export marketing? How to manage such risk?
7. Discuss the problems faced by India’s export sector.
------------------------------------------------------------------------------------------------------------------
Q.1 Define Export Marketing. Explain its features.
Ans. Definition : Export marketing is a systematic process of designing and delivering products to
satisfy overseas customers and to achieve objectives of an organistion.
Features :
1. Systematic Process
2. Customer focus
3. Customs formalities
4. Customs and traditions
5. Documentation
6. Trade Barriers
7. Trading Blocs
8. Marketing Mix
Q.2 Discuss the importance of exports for a nation.
Ans. 1. Earning of foreign exchange
2. Develop international Relations
3. Improve balance of payment position
4. Export bring reputation and goodwill for a nation
5. Export helps to generate employment
6. Regional development
7. Economic growth
8. Improve standard of living
Q.3 Explain the importance of exports for a firm.
Ans. 1. Reputation
2. Spreading of risk
3. Fulfill its Export obligations
1
TYBCOM – SEM V – Export Marketing – Module 1
4. Exports helps in improving organizational Efficiency
5. Incentives from government
6. Liberal imports
7. Keeping alive old products
8. Higher Prices
Q.4 Distinguish between domestic marketing and export marketing.
Ans. Meaning, Monetary System, Taxes, Transport cost, Trading blocs, Currencies, Competition,
Scale of operation
Q.5 What are the factors influencing export marketing?
Ans. I) Firm- Specific Factors
1) Higher profits
2) Recovery of R & D expenses
3) Sales and Production stability (in case of seasonal products)
4) Extension of Product Life Cycle
II) External Environment Factors
5) Economic growth
6) Free Trade Agreements
7) Government Incentives
8) Development of ICT
Q.6 What are the risks involved in export marketing? How to manage such risk?
Ans. Following are some of the export marketing risks.
1. Quality related risks
2. Foreign Exchange Fluctuation Risks
3. Credit Risks
4. Cargo Risks
5. Language and Culture Risk
6. Unforeseen risks (like terrorist attacks, war, riots, earthquake, volcanic eruption, hurricane
etc)
7. Political Risk
Q.7 Discuss the problems faced by India’s export sector.
Ans. In recent times, Indian exporters face a number of problems :
1. Recession in the world market
2. Protectionist Measures by Developed Countries
3. Competition from China
4. Problem of anti dumping duties
2
TYBCOM – SEM V – Export Marketing – Module 1
5. Problem of sea pirates attacks
6. Negative attitude of overseas buyers
7. Poor infrastructure
8. Problem of Trading blocs
Q.1 Define Export Marketing. Explain its Features.
Ans: Definition:
Export marketing is the process of planning, pricing, promoting, and delivering goods and services
from one country to another to satisfy international customers and meet the business goals of the
exporting company.
Features of Export Marketing (Explained):
1. Systematic Process:
Export marketing is not done randomly. It requires proper steps – like researching foreign
markets, planning, selecting products, pricing, creating promotions, handling transport, and
fulfilling legal formalities.
2. Customer Focus:
Exporters must understand what foreign customers want. Their needs, likes, culture, habits, and
preferences are different from local customers. So, products and services must be customized
accordingly.
3. Customs Formalities:
Export involves cross-border transactions, which require following government rules and customs
procedures (like getting approvals, clearances, licenses, etc.) for both exporting and importing
countries.
4. Customs and Traditions:
Cultural factors (e.g., religion, food habits, clothing styles) affect product demand. For example,
non-vegetarian products won’t sell well in certain countries, and a clothing style in India may not
suit European markets.
5. Documentation:
Many legal and shipping documents are needed, such as:
Bill of Lading
Certificate of Origin
Commercial Invoice
Packing List
Mistakes in documents can delay shipments or cause legal issues
.
3
TYBCOM – SEM V – Export Marketing – Module 1
6. Trade Barriers:
Countries may impose restrictions like import duties, quotas (limit on quantity), or licenses to
protect their own industries. These act as barriers to exports and must be handled carefully.
7. Trading Blocs:
A group of countries that encourage trade among themselves (like the European Union or
ASEAN) and may have restrictions for outsiders. Indian exporters may face extra duties if India
isn’t part of a bloc.
8. Marketing Mix:
Exporters use the 4Ps in export marketing:
Product – Must suit foreign tastes, safety laws, etc.
Price – Should be competitive globally.
Place – Channels like foreign distributors, agents, or online platforms.
Promotion – Ads, trade fairs, websites in foreign languages.
Q.2 Discuss the Importance of Exports for a Nation.
Ans: Importance of Exports for a Nation:
1. Earning Foreign Exchange:
Exporting brings foreign currency (like USD, EUR) to India, which can be used to import
technology, oil, machines, and other essential goods.
2. Develop International Relations:
Export builds good trade relationships with other nations. It helps improve diplomatic and cultural
ties, which also benefits tourism, education, and business cooperation.
3. Improves Balance of Payments (BOP):
BOP compares how much a country earns vs. how much it spends. Exports increase earnings and
help reduce trade deficit.
4. Brings Reputation and Goodwill:
Countries that export high-quality products (like Indian spices, handicrafts, or software) earn
international respect and become trusted suppliers.
5. Generates Employment:
Export industries provide jobs to thousands in farming, manufacturing, packaging, transport, port
handling, and services.
6. Regional Development:
4
TYBCOM – SEM V – Export Marketing – Module 1
Export encourages development in rural and underdeveloped areas by promoting local skills, e.g.,
handlooms in Bengal or carpets in Kashmir.
7. Economic Growth:
More exports = more income for businesses and the government = higher GDP = better public
services and infrastructure.
8. Improves Standard of Living:
Increased income from exports allows better living conditions, education, and healthcare for
citizens.
Q.3 Explain the Importance of Exports for a Firm
Ans: Importance of Exports for a Firm
1. Builds Reputation:
Exporting improves a company’s global image, making it respected internationally.
2. Spreading of Risk:
If the local market is down (due to inflation or recession), exporting keeps sales going, protecting
the firm’s income.
3. Fulfills Export Obligations:
Firms under certain government schemes (like SEZs or EPCG) must meet export targets to keep
getting benefits.
4. Improves Organizational Efficiency:
To meet international standards, firms improve product quality, management systems, and
operations, making them more efficient.
5. Government Incentives:
Exporters get cash benefits, tax exemptions, and reduced duties from the Indian government as a
reward for bringing foreign income.
6. Liberal Imports:
Exporting companies can easily import raw materials or machinery required for production at
reduced taxes.
7. Keeping Old Products Alive:
Products that are no longer in demand in India might still be useful in other countries, helping
avoid losses.
5
TYBCOM – SEM V – Export Marketing – Module 1
8. Higher Prices:
Exporters often earn more money from foreign buyers who are willing to pay premium prices for
good quality.
Q.4 Difference Between Domestic and Export Marketing.
Point Domestic Market Export Market
Meaning Selling goods within the home country Selling goods to other countries
(India)
Currency Payments in Indian Rupees (INR) Payments in foreign currency (USD,
Euro)
Taxes Only local taxes payable (GST) It is subject to tariff and non tariff
barriers
Transport Cost Relatively low (within India) High (air/sea freight, insurance,
warehousing)
Trading Blocs No Impact May face import duties or trade
benefits
Competition From Indian Companies Global companies (tougher
competition)
Scale of operation Small or medium as marketing is Large scale operations as marketing
done in one country is done in several countries
Culture and Common customs and language Must deal with foreign
Language culture/languages
Q.5 What are the Factors Influencing Export Marketing?
Ans: A) Internal (Firm-Specific) Factors:
1. Higher Profits:
Foreign buyers may pay higher prices, especially for unique Indian goods (e.g., Ayurveda, organic
foods).
2. Recovery of R\&D Costs:
Expenses spent on research and development can be recovered faster when selling in multiple
markets.
3. Sales Stability:
Seasonal products (e.g., woolen clothes) can be sold year-round by exporting to countries with
opposite seasons.
4. Extending Product Life:
Outdated products in India may still be new or useful in other countries, helping continue profits.
B) External (Environment-Based) Factors:
5. Economic Growth:
Exporting is easier when other countries’ economies are growing and people have money to
spend.
6. Free Trade Agreements (FTAs):
India has trade agreements with several countries which help reduce import duties, making
exports more competitive.
6
TYBCOM – SEM V – Export Marketing – Module 1
7. Government Incentives:
Exporters receive help like subsidies, tax benefits, training, and promotion from Indian
government.
8. Development of ICT (Information & Communication Tech):
With the internet and e-commerce platforms, companies can easily connect with buyers globally
and market their products online.
Q.6 What are the risks involved in export marketing? How to manage such risk?
Ans. The risks involved in export marketing and measures to manage it.
1. Quality Risk:
If product quality doesn’t match foreign expectations, it may be rejected or returned.
→ Use strict quality checks, certifications, and better packaging.
2. Foreign Exchange Risk:
Currency value can change between order and payment time, causing profit or loss.
→ Use hedging or forward contracts with banks.
3. Credit Risk:
Buyer may fail to pay after delivery.
→ Use letters of credit, advance payments, or export credit insurance.
4. Cargo Risk:
Goods may be damaged, stolen, or lost in transit.
→ Take marine insurance and pack products safely.
5. Language and Cultural Risk:
Misunderstandings may occur due to language barriers or cultural ignorance.
→ Hire translators, understand buyer’s culture and laws.
6. Unforeseen Risks:
Natural disasters, war, strikes, or terrorism may affect exports.
→ Diversify markets and take comprehensive insurance.
7. Political Risk:
Change in foreign government rules may ban or tax imports suddenly.
→ Stay informed and trade with politically stable countries.
Q.7 Discuss the problems faced by India’s export sector.
Ans. Problems Faced by India’s Export Sector are
1. Global Recession:
When economies abroad slow down, people buy less, reducing demand for Indian goods.
2. Protectionist Policies:
Developed countries protect their local industries by putting import restrictions on Indian goods.
3. Competition from China:
Chinese products are cheaper and faster to produce, making it hard for Indian exporters to
compete.
4. Anti-Dumping Duties:
7
TYBCOM – SEM V – Export Marketing – Module 1
Indian exporters are sometimes accused of selling too cheap (dumping) and face extra duties
unfairly.
5. Piracy at Sea:
Ships can be attacked by pirates in some regions, causing cargo loss and danger to crew.
6. Negative Attitude of Buyers:
Some foreign buyers think Indian products are of poor quality, even if that’s not true.
7. Poor Infrastructure:
India faces problems in ports, roads, electricity, and warehouses, causing delays and extra cost.
8. Trading Bloc Barriers:
Countries in a trading bloc (like EU) prefer trading within the group, making it harder for
outsiders like India.
*****
