The country’s import decreased 62 per cent year-on-year to $1.95 billion in April as industrial production has almost come to a halt due to the ongoing shutdown to tackle the spread of the coronavirus.
The settlement of letters of credit (LCs), or generally known as import, also declined 53 per cent in April from a month earlier, when the figure stood at $4.17 billion, according to data from the central bank
Source; www.thedailystar.net
Every business dreams of a Competitive edge!
R&D works around the clock to differentiate its product from its competitors. When you are exporting and penetrating markets worldwide, it is a different ball game. It is crucial to distinguish your product on a shelf from related merchandise. If you want to gain exponential sales, the best way to go about is to identify the differentiation factors of the product. This understanding will help you trade effectively in the international markets.
Product differentiation adds value to the business; it is the reason why your consumers will choose you over your competitors. The most acute factors that play a role while differentiating your product are listed below:
Every business needs a core competency, and similarly, all products need exclusive qualities. When you advertise your product, you ought to focus on the particular uniqueness of your merch. It could be a special ingredient, health benefit, organic nature, taste, durability, or design. If you have no unique advantage over your competitors after careful evaluation, you need to market it differently. Your service or after-sale services can play a critical role in international markets.
You can differentiate your business in the offshore markets by advertising the origin of the product. For example, if you are selling fruits, stressing on where they were produced, how those farms rank number one in the world, etc. People in the international marketplace love purchasing things from different origins; it gives them a sense of association. Especially if you have many immigrants in that targeted country from your home nation, they will be the first ones to buy. Everyone loves buying pasta that was made in Italy.
Price is a critical differentiator factor of the product in the global markets. China plays big on this merit because they usually have economies of scale, and their production costs are economical. They always try to bid a price that is even cheaper than the locally produced merchandise of that country. Pricing below the generally accepted norm will make your product different. For that, you need to understand all the price points in place. Your research on the price trends will matter a lot when setting up your price in that demography.
The most crucial differentiation factor for a product is knowing which type of differentiating you are encountering. There are three main kinds of the discussed topic. The horizontal level is when your quality and price are equal to the competition, and you need to differentiate by positioning your brand in the consumer’s mind based on their class. The other type, Vertical differentiation, is when your competitors have different prices, and you score your product with a brand name. The simple distinction, the third type, is where you have a horizontal level of rates and scope. Still, you market your products targeted on relationships or manufacturing standards. Once you fathom the types, you will know what you are going into.
Way to go, if you are already an exporter or aspiring to become one! Choosing the distribution channel could be a difficult decision, and it may not guarantee growth in your business. How to decide which distribution channel is the right fit for your export business is technical.
There are numerous distribution channels for export business. You could be directly exporting, which means you approach your buyer viz a viz and close a deal to start your business proceedings. Many companies prefer dealing with the manufacturer or a supplier directly. Alternatively, you could choose the option of E-commerce. It is a simple way of approaching your potential buyers, and digital marketing is the best tool. If you don’t have a background in IT, freelance digital marketing experts could solve your problem. This service would help promote your product in the destined country. Alternatively, you could use the old-fashioned way of hiring an intermediary, a commission agent, who would contact the buyer and secure a deal for you. It is essential to consider all the options and come up with the best strategy. We will simplify the process for you.
Firstly, you need to analyze the distribution channels of your competitors. People who are in the same business as you, and maybe more experienced, have a selected distribution channel. You must assess the effectiveness of that channel; evaluate the outcome and the experience. After the evaluation, you need to decide what’s best for your business and your clients. It is also important to note here that you do not blindly copy what your competitors are doing. The point we are making here is that you do your due diligence of research and analysis. The onus is on you to decide whether to go with the same channel or choose a similar one.
You need to consider the cost factor when deciding the distribution channel. If Indirect Exporting is proving expensive for you, you can always start approaching the clients with your efforts while remaining ethical. You cannot merely steal your commission agent’s client as it does not seem noble. However, if the client approaches you or you start using the Direct Export Channel, it might prove more beneficial for your business. Thus, the related costs to a distribution channel are the deciding factor.
Once you are in the process of choosing which distribution channel is the go-to for your export business, it is best to create a strategic road map first. Here you will line out everything from start to end of the trading process. You could also judge from different options of E-commerce or direct/indirect selling, and rank the selections accordingly. Plan your progress with the help of advance-planning. You could also hire the services of an export consultant to rate your different plans. Still, the efficient way is to run a virtual analysis either by you or by an expert.
If your current network is not working out well for you, choose another. It is essential to keep assessing your business strategies and evolving with time. If your selected distribution channel for exports is not cost-effective or the results are not satisfactory, you could add another distribution-channel. Online marketing, for instance, could be added to your current choice. Alternatively, you could change the export channel altogether. After all, this is your business. You will always need to choose what’s looking best for your profits and customers.
The largest trade corporations were not built in a day – you need to start small. There is always a risk factor when you commence business activities, and you don’t want to lose the empire you had built whether it’s small or large. You will need appropriate coverage for the unforeseen fails over the course, such as theft and fire hazards. When you are importing or exporting any commodities, it should cover the damages of those products if reported by the client.
In some countries, it is required by the state to get the organizational assets insured. However, in other nations, it is not the law to have Insurance for your products. The developing countries’ businessmen don’t opt for a proper insurance plan; thus often suffer miserably in case of accidents. Whereas, the developed nations abide by the insurance regulations more promptly. The premium seems like a drop in the ocean when the insurance companies cover a considerable loss. Before diving into the Product insurance niche, it is crucial first to understand the business-related types of insurances briefly.
There are many distinct insurance types when it comes to business-related coverage. It starts with property insurance, which includes your office, factory area, or the selling outlets. Property insurance covers accidents like fire, short circuit, water damage, and several other mishaps. Vehicular insurances, the second type, is where the transporting trucks and cars are protected against God-forsaken road accident. The third insurance category is related to the employees, and it is called Compensation insurance for workers. Another classification of Indemnity is Professional Liability Insurance. This part is a mistake cover-up where your client was harmed in any way.
An interesting Insurance clause is Business Interruption Insurance amidst the crisis. This fragment is suited best for disasters like COVID19. If a company had this insurance plan and suffered from closure or needs rebuilding after the pandemic, the income loss may be covered. It could be included in the overall comprehensive Insurance Package of an organization. Furthermore, the insurance niche related to the products is interpreted as Product Liability Insurance
Product Liability Insurances provides treatment to the claims of third parties, that is to say, the damage reported by consumers. For instance, if your client used your merchandise and suffered from bodily harm, property loss, sickness or death. The food industry often suffers from problematic outcomes associated with food products. If your customer ate the ketchup sold by your company, and it causes diarrhea or vomiting, you would be held responsible for the consequences. Usually, the insurance providers also cover the legal proceedings related to the issue. There is always risk involved with your products having adverse effects on the client, and a third-party can raise complaints or even sue your organization.
Manufacturing fault or design disarray are the common grounds for the need for Insurance. If you left out any required information on the packaging, or the safety warnings were not correct, you can face the penalties. Any small business can purchase an insurance policy, but they should be covering legal costs too.
There is no Free lunch in the corporate world, but a brutal circle of payments. A client cannot purchase “something for nothing,” and businesses are all about the circulation of payments. One owner pays for the services of his employees and the materials by vendors. The vendor makes that payment to another business entity, so on and so forth. Thus, the sweet round of economics is all paid up in a vicious ring.
There are different types of payment instruments used by entrepreneurs, where some are incredibly modern ways like “cryptocurrency”. Since not all organizations are comfortable with this digital currency, we will be sharing old-school or rather classic payment instruments currently in practice. There are specific financial instruments, for example, letters of credit and bill of exchange, etc., and we will discuss those in detail.
If we simply define the term, it is a document issued by a banking institution to a different bank. It is a documentary credit that is widely utilized in international trade to an exporter. The trustworthy bank provides a guarantee in order to pursue the trade business smoothly. LC assures an exporter that the buyer’s payment will be cleared on time and for the exact amount. If the seller finds out the payment is not made due to buyer’s inability, the bank will remain liable to clear the amount to the trader.
TT is a medium of foreign remittance, which pays the funds via telegraphic transfers. It is basically a bank transfer in the electronic form from buyer to the seller through a bank. It is a relatively old process used by traders and has changed into an open account method in many countries. A trader in Egypt, for instance, pays his local bank and they will send a fax to their foreign branch or affiliate to clear the payments on a mentioned date. The exchange rate is quite suitable in the T/T way.
Also known as Cash against Documents CAD, This payment term involves the Exporter instructing the bank to hand over the necessary documents to the importer after dues are cleared. CAD is used when the buyer completely pays the attached bank draft or bill of exchange. This method is easier for both sides of the trade and less expensive than a letter of credit. Document against payment or DAP sees clear instructions to the bank about dispatching those documents only when the importer clears the whole amount.
A foreign bill of exchange is a standard payment method in the import and export industry when there is established trust between both parties. Usually, trading business involves repetitive business with the same buyer or seller, and there is no risk involved in the transaction. If both accept the creditworthiness of each other, the Exporter prepares this document and sends it to the commercial bank in the buyer’s territory. The relevant documents are also sent with the payment. The importer will ultimately withdraw this financial instrument with ease.
We have listed the effective ways of accessing the export industry by a food exporter. Here is the kick-off.
Once we have identified a target market to export our food products, It is crucial to grasp the conceptual desires of customers of that specific market niche. We will need to understand the emotional and practical needs of our audience to secure our volume of business. When a Food Industry’s Exporter wants to be successful while making the first impression in the international market, they identify the gaps.
Another good practice for accessing the food industry’s export market is to ensure that the value your product is offering must match the customer needs. If the competitors do not appropriately serve a targeted segment in that particular export market, it is your cue to jump right in and balance the product fit. Your product’s core value should match the effectiveness of the distribution channel. The supply chain is crucial in providing the right product fit to meet the precise demands of customers.
There is a trend in the food industry’s export markets, which is on the rise in recent years, to favour the products that have food safety standards in place. Packaging Food Standards, for instance, are vital to ensure the safety and quality of the goods in transit. Furthermore, Labelling standards are required by law in many countries, and you might be exporting to one of those regulated countries. It is obligatory to label the food products to caution end consumers with any sensitivities they might have. Gluten, grain or other food allergies should be mentioned on the product to make its mark in the export industry.
An excellent practice to access the food industry’s export market is to ensure you have the means and facilities to meet the increased demand. If your production capacity is not up to the mark or if you are not equipped to produce in bulk, you might have repercussions beyond imagination.
Budgeting is not the same when it deals with the food industry’s export market. An organization needs to consider the placement of extra staff, not only senior levels but junior levels as well. Extensive travelling comes into play for the initial research and period of exporting the food industry’s products. All in all, a company needs to be prepared financially to access the export market. An export business might take one year to flourish exponentially, and the firm needs to have advance budgeting for that period, based on estimates.
It is safe to assume that the food industry’s Exporter will not fail while accessing the international markets if he follows these effective practices. It starts at pinpointing the market needs and finding the right product fit. A business which considers food safety standards gains the best customer satisfaction. If a trader adopts these good practices, and he has the production capacity and appropriate budgeting; the sky is the limit.
A research conducted by Sandhya Keelery suggests that Indian Agribusiness has seen a burgeoning rise in recent years and foresaw a 350 billion USD business in 2022. Gone are the days when only farming was considered the Agricultural industry. In today’s world, Chemicals, Crop distribution, Machinery, Seeding, Retail sales and many more domains are all part of international exchanges.
Do you wish to expand your consumer base? You need to execute an efficient global strategy to achieve a higher amount of business and, consequently, maximizing your profit ratio. We have listed what international strategy to adopt for your business below:
Seminars and Exhibitions take place throughout the year. Therefore, companies have to participate in it to maintain their visibility, contact with potential clients and their knowledge of the market. These dealings are crucial for establishing connections and build relations. The relationship you create with vendors, buyers, even competitors in those meetings, will scale up your business in the international market. The conferences also provide you with a chance to display your products as well. Seeds distribution, for example, is promoted with a display counter showcasing your products in the symposia. You get to attend sessions with consultants and enrol in training workshops as well. The atmosphere broadens your horizons and makes you think out of the box. The build-up to your company’s profile can play a significant role in your quest.
You could have all the technological advancements in your pocket, the best organic techniques in your resume, but it could all go wasted. You need to retain your customers! Your buyers need to keep coming back for your products, and the best way to ensure the retention of your clients is After-Sale Services. The problem with selling internationally is that you are mostly dealing through online communication means, and the handling of customer complaints is not efficient. You could set up and offshore call center, or invest in a local presence, be it through the office or a service center. If you are dealing with Agri-Machinery, and your client faces a mechanical hazard, your prompt service will ensure the customer will find you again.
Information is the secret ingredient. Developed countries’ individuals need transparency and access to information. When you are marketing your product or selling it, you need to provide all the required information. If your business is food-related, you need to let out the info about calories, vitamins, minerals, expiration, and origin, etc. Furthermore, you must maintain data of your current clients or potential customers. You can do this by creating an Email Subscription list, Telesales, and Memberships. Your record should contain the contact information, customer profile, purchase history with you. Harness the data and use it for introducing a new product or upselling your real commodity.
All in all, keeping your foot on Data, Services, and showcasing through the professional channel will make all your dreams come to life.
Before diving into the sea of Exports, you need to ask yourself this, do you have what it takes? Do you have a Quality Production, and how good is your Management of Food Products?
People often mistake export as a regular business, thus fail gloomily. For example, if you start exporting your products to a country and it turns out to be an overnight success. If your production is at capacity, you will not be able to meet the demand. The first impress will always remain the last, and if you fail to supply repeat products, you are going to hit rock bottom without knowing. You need to work out these basics before a leap of faith and turn it into a calculated risk.
When it comes to the Management of Food Products, you need to work on your strengths first. If you have skilled labour, it is best to train them with modern techniques to improve productivity. You need to assess and evaluate your business trends for at least the past two years and work out the best strategy for exporting your products now. This evaluation must include the performance of your company in the domestic markets.
Your Organizational management needs to visit and analyze the target market of your exports. The findings’ requirement is a report on territorial needs, competition level & local law adjustment. As a manager, you must develop contacts within the targeted territory. You will need to estimate the business outcome before entering the market. Set a goal and achieve it. No way around it!
The food industry is a tricky business, as it is very delicate. Your food items are perishable, expire after a certain period, and also fragile. You can handle it with care while producing, but in transit, your packaging must be reliable. Food products come from farmers, fishers, and also processing factories. One needs to ensure the quality of production to rank higher as a company. Your management needs to put all the Food Security standards in place.
A company needs to be vigilant when it comes to the Quality and Management of Food products before exporting. It is useful to obtain specific certifications implying the top quality, and that’s the role of management. The pain point of shipping food-related items is to be able to clear the host destination’s quality standards. Your product could be the highlight in your current demography, but is it according to the demands of the territory where you want to sell it?
The forefront of your organizational style is bringing out the best of quality, to sell it efficiently in the export arena. Your raw material cannot be substandard. Your human capital needs to be motivated to ensure compliance with your ground rules. If you are going to export processed food, contamination and food safety will haunt you in your nightmares. The idea for prepping yourself before shipping and entering a new market is to ensure excellence and research well. If you are well-resourced with the measures mentioned above, you will rock the export business!
According to WTO, there are more than 150 developing countries on the world’s map. It means, in no way, those nations are not talented. If you look closely, most of these countries are full of natural resources, and a few have less corruption too. What makes an excellent Export marketing strategy for emerging nation-states. One needs to distribute the products of a rising state, to the countries with the most celebrated purchasing power. If your country can mark itself in the big-game, the sky will be the limit. Many republics have their go at Exports but fail miserably. We have come up with strategies with proven track records that can mushroom the trade channels. Imagine the employment and prosperity it could bring if served right.
Consider your country as a brand, what position does it have in the minds of other countries, and how could you make it trustworthy? These are the questions you need first to ask yourself. People have stereotypes and glass ceilings for particular countries, and it is harmful to the export business. If we can rectify the positioning in the minds of consumers, it will be a win-win situation. Kenya, for example, branded itself as a Tea Growing country and promised the best quality of Tea out there. They saw their potential in the Tea industry and grabbed the opportunity with both hands. This leap of faith has turned into a billion-dollar industry for the Kenyan Republic.
Traders and Investors are afraid to develop business relations with particular countries due to their rigid laws. If you want your developing country to see it to the other side of rainbows of trade business, your Rules & Regulations should be as friendly as possible. Your state could flourish if the investors feel safe and have a comfortable working environment. If we take Bangladesh’s example, a few years ago, their lawmakers made it a business-friendly country. Other countries’ nationals from all walks of life, bet on that and shifted their units to Bangladeshi cities. It has become the South-Asian tiger in terms of economic growth. Would you believe if I told you, Bangladesh is to be more abundant than India by 2030?
If your country as a whole can ensure the product’s quality, it is destined to blossom! Take Chile’s example; they did not compromise on their condition. Slowly and steadily, their products positioned as the best quality when it came to their fruits. They were out and about and came back with a bang. Thus, their food exports marked 25% of its overall exports, and the country saw a blissful future in it.
The point we tried to make is, every developed nation was once under-developed. If you can focus on the right strategies, your country can top the next list to be published by an international institution. India has applied diverse yet impeccable strategies to its export industry. Indian exporters rank number one in the export niche of Mangoes. Their Services exports are enormous and bringing impressive foreign income to the country. The world is at your arm’s length; you just need to make the right start.
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Behind every successful Wine and Dine, there is a background of chain events. Multifold Companies and Individuals fill this supply chain. They are trading day and night for the right food and beverage products in the right markets. Amid so much competition, how could your business flourish? Eating and Drinking come hand in hand, but the exporting organizations do not always deal with both types. We will focus on the Tips, which will work for the benefit of both products. The advantages you could have for your business to make it shine.
If you set about selling your product anywhere you can, the overheads will be skyrocketing. It is critical that you thoroughly research and identify the market niches that have the most demand for your products. These factors could include a Price Advantage or less Competition. Price benefit means that you can upsell your product at a higher profit margin if you could find the exact demography with the top-paying customers. Since the products similar to your business are high-priced, your company can make a fortune if you make a move to export into that country/area. That is to say, you could make your product the right fit for that marketplace. Another area of research is the competition. The sweet truth of marketing is the first-mover advantage. If you can’t be the very first Exporter in a market, choose the market with a lesser quantity of traders. If your Area Niche is adequately studied before entering, and you find the exact option, your business will be booming in no time.
Product Quality will beat the competition, position your company best in consumer’s heads, and the market image will enhance any given day. If you have Quality Items, you have the keys to the city. Your business needs to be superior to the products available in the area where you are exporting your products. If you conclude that your quality is not according to the industry standards of that area, choose another demography. The bottom line is, the excellent product has room everywhere.
Know your target market! Period. If you are not familiar with the market, hire a local professional. You need contacts, references, information, data, and analysis for the target market for your product. You need to think like the locals and then indulge your product accordingly. It is also essential to be knowledgeable about the country/state’s laws about trades and business activities. Your Lawyers can work closely with the local Lawmakers, or Solicitors to come up with a solid plan. Legal hindrance for your export business is not good.
If you are well established in your country, it is brilliant! Show it to your new audience that you are a well-known company. The best advertisement is vital to your business’ success. You need to advertise according to the country as well. Wine, for instance, cannot be announced in a Muslim country. You cannot market your meaty products in an Indian community. The right advertisement will mushroom your organization’s success.
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