1

INDEX

Introducing New Products In International

Markets
..2

Packaging....................................................................................................................................................6
Various Packaging Designs, including labeling.......................................................................................7
Common uses of packaging include:.......................................................................................................7
Labeling...................................................................................................................................................8
Symbols Used in Labels..........................................................................................................................8
Labeling Laws.........................................................................................................................................8
Factors Influencing Pricing Strategy in International Marketing.................................................................9
1) Skimming Strategies:....................................................................................................................10
2) Penetration Pricing Strategies:.......................................................................................................11
3) Differential Pricing Strategies:......................................................................................................11
4) Geographic Pricing Strategies:......................................................................................................11
5) Product Line Pricing Strategies:....................................................................................................12
Introduction...........................................................................................................................................14
Direct Selling.........................................................................................................................................14
Selling Through Intermediaries.............................................................................................................15
Dual Distribution...................................................................................................................................15
Reverse Channels..................................................................................................................................15
Global sourcing.........................................................................................................................................15
Top 10 Role of Advertising in Promotion of a Product..............................................................................20
Roles And Importance Of Sales Promotion.......................................................................................23
Importance of E-Commerce in Todays International Business.................................................................24
Why Brand Building Is Important.............................................................................................................25
Procedure for Central Excise Clearance Under Export..........................................................................29
Export Credit Guarantee Corporation of India...........................................................................................32
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What does ECGC do?............................................................................................................................32

How does ECGC help exporters?..........................................................................................................32

Introducing New Products In International

Markets

In business and engineering, new product development (NPD) is the term used to describe the
complete process of bringing a new product or service to market. There are two parallel paths involved
in the NPD process : one involves the idea generation, product design, and detail engineering ; the other
involves market research and marketing analysis. Companies typically see new product development as
the first stage in generating and commercializing new products within the overall strategic process of
product life cycle management used to maintain or grow their market share.
Categories of new products:
Six categories of new products in terms
of their newness to the company and to the market
place:
New-to-the-world products
new products that create an entirely mew market
New product-lines
new products that allow a company to enter an established market for the first time
Additions to existing product-lines
new products that supplement a company's established product lines (package sizes, flavors,
so on)
Improvements or revisions to existing products
new products that provide improved performance or greater perceived value and replace
existing products
Repositioning
existing products that are targeted to new markets or new market segments
Cost reductions
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new products that provide similar performance at lower cost

Issues in new product development:
The companies need the development of original products, product improvements, product
modifications & new brands on a consistent basis to survive competition but most new products fail.
New-product failure
nearly 80% of new packaged consumer goods & line extensions fail
nearly 33% of new industrial products fail at launch
New successful products
are unique superior products
higher quality, new features & offer higher value
have well-defined concept
by carefully defining and assessing the target markets, product requirements & benefits
To remain successful companies must continuously develop new products - but the odds weigh heavily
against success. The solution lies in strong new-product planning

Successful new products are the ones;

that have relative advantage

have compatibility with other technology and distribution system.

International Marketing MKT630
VU

allow trialability / divisibility for buyers to try and learn

can be judged through observation

just right in terms of complexity of technology and use

offer value for the price

The new product development process:
Successful new product development process consists of eight major steps;
1. Idea generation:
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systematic search for new-product ideas

-
internal sources
-
customers
-
competitors
-
distributors
-
suppliers
-
others
2. Idea screening:
to spot good ideas and drop poor ones
- is the product truly useful to consumers & society
- availability of market
- does it mesh well with company's objectives & strategies
- do we have the people, skills & resources to make it succeed
- does it deliver more value to customers than competing products
- is it easy to advertise and distribute
- availability of technology
- availability of raw materials
- risk exposure, profitability, cost/benefit
- government priority
- any other factor
- CRITICAL SUCCESS FACTOR
3. Concept development & testing
product concept is a detailed version of the new-product idea stated in meaningful consumer
terms
concept development - a new product idea is developed into alternative product concepts
concept testing - calls for testing new-product concepts with groups of target customers
4. Marketing strategy development
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describe target market

planned product positioning
planned sales & market share
& profit goals for first few years
5. Business analysis
a review of the sales, costs & profit projections for a new product to find out whether these
factors satisfy the company's objectives
sales forecast
estimation of costs & profits

6. Product development
7. Test marketing - in realistic market setting
8. Commercialization (launch)
Introducing new products to the world markets:
Waterfall Model:
-
-
Global phased roll out new products tickle down in
a cascade like manner.
Sprinkler Model:
-
-
Simultaneous worldwide entry.
-
Growing prominence of universal segments.
-
Concerns about competitive pre-emption in the foreign markets.
The waterfall strategy of segmentation entry is preferable over the sprinkler model when ;
1.
The lifecycle of the products is relatively long
2.
Non-favorable conditions govern the foreign market, such as:

Small foreign markets (compared to home market)

Slow growth

High fixed cost of entry

3.
Weak competitive climate exists in the foreign market, because of such things as
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Very weak local competitors

Competitors willing to cooperate
No competitors
Superior quality can reduce a customer's life-cycle ownership costs, enhancing customer loyalty, repeat
buying, and word-of-mouth advertising ISO 9004 suggests the roles that marketing should play:
Take the lead in establishing quality requirements for the company by determining customer
needs and communicating them throughout the company
Translate customers needs into specifications including performance and sensory characteristics,
installation configuration, statutory and technical standards, packaging and quality standards
Set up an information system to monitor customer satisfaction and dissatisfaction, and feedback
such pertinent information to facilitate design and manufacturing changes
Develop early warning systems to spot performance problems with new-product introductions;
continuously monitor product performance against quality specifications such as reliability and
safety, and track and analyze customer complaints so that corrective action can be taken in design
and manufacturing

Packaging and Labeling

Packaging refers to the physical appearance of a product when a consumer sees it,
and labels are an informative component of packaging.

Packaging

With the increased importance placed on self-service marketing, the role of packaging is becoming quite
significant. For example, in a typical supermarket a shopper passes about 600 items per minute, or one
item every tenth of a second. Thus, the only way to get some consumers to notice the product is through
displays, shelf hangers, tear-off coupon blocks, other point-of-purchase devices, and, last but not least,
effective packages. Considering the importance placed on the package, it is not surprising that a great deal
of research is spent on motivational research, color testing, psychological manipulation, and so forth, in
order to ascertain how the majority of consumers will react to a new package. Based on the results of this
research, past experience, and the current and anticipated decisions of competitors, the marketer will
initially determine the primary role of the package relative to the product. Should it include quality,
safety, distinction, affordability, convenience, or aesthetic beauty?
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Various Packaging Designs, including labeling

Packaging refers to the physical appearance of a product when a consumer sees it,
and labels are an informative component of packaging.

Common uses of packaging include:

Physical protection: The objects enclosed in the package may require protection from, among
other things, mechanical shock, vibration, electrostatic discharge, compression, temperature, etc.
Information transmission: Packages and labels communicate how to use, transport, recycle, or
dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some
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types of information are required by governments. Some packages and labels also are used for track and
trace purposes.
Marketing: The packaging and labels can be used by marketers to encourage potential buyers to
purchase the product. Package graphic design and physical design have been important and constantly
evolving phenomenon for several decades. Marketing communications and graphic design are applied to
the surface of the package and (in many cases) the point of sale display, examples of which are shown
here:.
Convenience: Packages can have features that add convenience in distribution, handling,
stacking, display, sale, opening, re-closing, use, dispensing, reuse, recycling, and ease of disposal.
Barrier protection: A barrier from oxygen, water vapor, dust, etc., is often required. Permeation is
a critical factor in design. Some packages contain desiccants or oxygen absorbency to help extend shelf
life. Modified atmospheres or controlled atmospheres are also maintained in some food packages.
Keeping the contents clean, fresh, sterile and safe for the intended shelf life is a primary function.
Security: Packaging can play an important role in reducing the security risks of shipment.
Packages can be made with improved tamper resistance to deter tampering and also can have tamper-
evident features to help indicate tampering. Packages can be engineered to help reduce the risks of
package pilferage.
Labeling
A label is a carrier of information about the product. The attached label provides customers with
information to aid their purchase decision or help improve the experience of using the product. Labels can
include:
Care and use of the product
Recipes or suggestions
Ingredients or nutritional information
Product guarantees
Manufacturer name and address
Weight statements
Sell by date and expiration dates
Warnings

Symbols Used in Labels

Many types of symbols for package labeling are nationally and internationally standardized. For
consumer packaging, symbols exist for product certifications, trademarks, and proof of purchase. Some
requirements and symbols exist to communicate aspects of consumer use and safety. For example, the
estimated sign notes conformance to EU weights and measures accuracy regulations. Examples of
environmental and recycling symbols include the recycling symbol, the resin identification code, and the
"green dot."
Labeling Laws
In some countries, many products, including food and pharmaceuticals, are required by law to contain
certain labels such as ingredients, nutritional information, or usage warning information (FDA). For
example, a law label is a legally required tag or label on new items describing the fabric and filling
regulating the United States mattress, upholstery, and stuffed article industry. The purpose of the law label
is to inform the consumer of the hidden contents, or "filling materials" inside bedding & furniture
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products. Laws requiring these tags were passed in the United States to inform consumers as to whether
the stuffed article they were buying contained new or recycled materials. The recycling logo,, needed to
be displayed on the label. The Fair Packaging and Labeling Act (FPLA) is a law that applies to labels on
many consumer products that states the products identity, the company that manufactures it, and the net
quantity of contents.

Factors Influencing Pricing Strategy in International

Marketing
Some of the most important factors influencing pricing strategy in international marketing are as

follows:

Pricing decisions are complex in international marketing. A firm may have to follow different pricing

strategies in different markets. Whatever might be the strategy followed, pricing has to reflect the proper

value in the eyes of the consumer. Pricing is an important strategic and tactical competitive weapon that

can be used by a firm in international marketing.

It represents that element of the marketing mix, which is controllable by the firm to a large extent. A firm

should integrate pricing strategies with the other elements of the international marketing mix.

Choice of a pricing strategy is dependent on:

1) Corporate goals and objectives

2) Customer characteristics

3) Intensity of inter-firm rivalry

4) Phase of the product life cycle

Having considered the factors influencing the choice of strategy, let us now turn specifically to

different strategies:
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1) Skimming Strategies:

One of the most commonly discussed strategies is the skimming strategy. This strategy refers to the firms

desire to skim the market, by selling at a premium price. Skimming refers to the objective of achieving

highest possible contribution in a short time. To use this approach, the product has to be unique and the

target market should be willing to pay the high price. Success of this strategy depends on the ability and

speed of competitive reaction. A firm with a small market share can face aggressive local competition

when using skimming. Maintenance of high quality requires lot of resources. If the product is sold

cheaply at home, then the problems of gray market can surface.

This strategy delivers results in the following situations:

i) When the target market associates quality of the product with its price, and high price is perceived to

mean high quality of the product.

ii) When the customer is aware and is willing to buy the product at a higher price just to be an opinion

leader.

iii) When the product is perceived as enhancing the customers status in society.

iv) When competition is non-existent or the threat from potential competition exists in the industry

because of low entry and exist barriers.

v) When the product represents significant technological breakthroughs and is perceived as a high

technology product.

In adopting the skimming strategy the firms objective is to achieve an early break-even point and to

maximize profits in a shorter time span or seek profits from a niche.

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2) Penetration Pricing Strategies:

As opposed to the skimming strategy, the objective of penetration price strategy is to gain a foothold in a

highly competitive market. The objective of this strategy is market share or market penetration. Here, the

firm prices its product lower than the others do in competition. Penetration pricing uses deliberate low

prices to stimulate market growth and capture market share. It can be useful when there is a mass market

and price sensitive customers. Japanese companies increasingly resort to penetrative pricing due to

intense local competition.

This strategy delivers results in the following situations:

i) When the size of the market is large and it is a growing market.

ii) When customer loyalty is not high customers have been buying the existing brands more because of

habit rather than any specific preferences for it.

iii) When the market is characterized by intensive competition

iv) When the firm uses it as an entry strategy

v) Where price-quality association is weak.

3) Differential Pricing Strategies:

This strategy involves a firm differentiating its price across different market segments. The assumption in

this strategy is that different market segments do not communicate or have different search costs and

value perceptions of the product. In other words heterogeneity in the market motivates a firm to adopt this

strategy.
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4) Geographic Pricing Strategies:

This strategy seeks to exploit economies of scale by pricing the product below the competitors in one

market and adopting a penetration strategy in the other. The former is termed as second market

discounting. This second market discounting is a part of the differential pricing strategy where the firm

either dumps or sells below its cost in the market to utilize its existing surplus capacity. So, in geographic

pricing strategy, a firm may charge a premium in one market, penetration price in another market and a

discounted price in the third.

5) Product Line Pricing Strategies:

These are a set of price strategies, which a multi-product firm can usefully adopt. An important fact to be

noted is that these products have to be related, in other words belonging to the same product family. Faced

with multi-products and fluctuating demand, the firm may adopt a combination of the following strategies

to effectively manage its product line or maximize its profits across the product line.

i) Price Bundling:

This strategy is used by a firm to even out the demand for its product. This is useful strategy for

perishable; time-bound products like food, hotel room or a seat on a flight and for products cannot be

substituted, like the package of stereo music system. Off-season discounts and, season tickets for music

festivals are examples of price bundling strategy. This is a passive strategy aimed at correctly bundling

the prices of related items so that the firm is able to maximize its profits.

ii) Premium Pricing:

This strategy is used by a firm that has heterogeneity of demand for substitute products with joint

economies of scale. Consider the example of a colour television set. There are different models available

with different features, like the one with a remote control and another without it. Both are substitutable

and satisfy the customer needs. But the firm may opt to premium price the first model and position it as
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the top of the product line for high income or upper income group of customers or for whom

communicating that they have arrived is important,

iii) Image Pricing:

This strategy is used when consumers infer quality from the prices of substitute models or competing

products. The firm varies its prices over different brands of the same product line. This strategy is

commonly used in textiles, cosmetics, toilet soaps and perfumes.

iv) Complementary Pricing:

This strategy is used by a firm that has customers with high transaction costs for one or more of its

products. Transaction costs are all those costs that a customer has to incur to buy the product, like the

registration fees that a flat buyer has to pay in order to be a legal owner or the processing fees that the

bank may charge to give a credit card to the customer.

v) Captive Pricing Strategy:

Here a special price deal is offered to loyal customers or those who are regularly buying one of the

products of the firm. A typical example is the Gillette shaving system, which offers two twin blades free

with its razor to induce the buyer to purchase its blades. Kodak adopted this strategy, when it offered a

film roll free to all buyers who bought its camera. As may be observed this is a strategy aimed at building

customer loyalty.

vi) Loss Leader Strategy:

This is another example of complementary pricing strategy. This strategy involves dropping the price on a

well-known brand to generate demand or traffic at the retail outlet.

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vii) Two-Part Pricing:

This strategy is used by products that can be divided into two distinct parts. For example, membership of

a video library has two parts one is the membership fee, which is annual and the other is rent for each

time frame for which a videocassette is rented. As may be observed the price has two components, the

fixed fees and the variables usage fees.

Types of Marketing Channels

There are basically 4 types of marketing channels: direct selling; selling through intermediaries; dual
distribution; and reverse channels.

Introduction
There are basically four types of marketing channels:
Direct selling;
Selling through intermediaries;
Dual distribution; and
Reverse channels.
Essentially, a channel might be a retail store, a web site, a mail order catalogue, or direct
personal communications by a letter, email or text message. Here's a bit of information about each one.
Direct Selling
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail
location. Peddling is the oldest form of direct selling.
Modern direct selling includes sales made through the party plan, one-on-one demonstrations, personal
contact arrangements as well as internet sales.
A textbook definition is: "The direct personal presentation, demonstration, and sale of products and
services to consumers, usually in their homes or at their jobs. "
Industry representative, the World Federation of Direct Selling Associations (WFDSA), reports that its 59
regional member associations accounted for more than US$114 Billion in retail sales in 2007, through the
activities of more than 62 million independent sales representatives.
The United States Direct Selling Association (DSA) reported that in 2000, 55% of adult Americans had at
some time purchased goods or services from a direct selling representative and 20% reported that they
were currently(6%) or had been in the past(14%) a direct selling representative.
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According to the WFDSA, consumers benefit from direct selling because of the convenience and service
benefits it provides, including personal demonstration and explanation of products, home delivery, and
generous satisfaction guarantees. In contrast to franchising, the cost for an individual to start an
independent direct selling business is typically very low, with little or no required inventory or cash
commitments to begin.
Most direct selling associations, including the Bundesverband Direktvertrieb Deutschland, the direct
selling association of Germany, and the WFDSA and DSA require their members to abide by a code of
conduct towards a fair partnership both with customers and salespeople. Most national direct selling
associations are represented in the World Federation of Direct Selling Associations (WFDSA).
Direct selling is different from direct marketing in that it is about individual sales agents reaching and
dealing directly with clients while direct marketing is about business organizations seeking a relationship
with their customers without going through an agent/consultant or retail outlet.
Direct selling often, but not always, uses multi-level marketing (a salesperson is paid for selling and for
sales made by people they recruit or sponsor) rather than single-level marketing (salesperson is paid only
for the sales they make themselves).
Selling Through Intermediaries
A marketing channel where intermediaries such as wholesalers and retailers are utilized to make a product
available to the customer is called an indirect channel.
The most indirect channel you can use (Producer/manufacturer --> agent --> wholesaler --> retailer -->
consumer) is used when there are many small manufacturers and many small retailers and an agent is
used to help coordinate a large supply of the product.
Dual Distribution
Dual distribution describes a wide variety of marketing arrangements by which the manufacturer or
wholesalers uses more than one channel simultaneously to reach the end user. They may sell directly to
the end users as well as sell to other companies for resale. Using two or more channels to attract the
same target market can sometimes lead to channel conflict.
An example of dual distribution is business format franchising, where the franchisors, license the
operation of some of its units to franchisees while simultaneously owning and operating some units
themselves.
Reverse Channels
If you've read about the other three channels, you would have noticed that they have one thing in common
-- the flow. Each one flows from producer to intermediary (if there is one) to consumer.
Technology, however, has made another flow possible. This one goes in the reverse direction and may go
-- from consumer to intermediary to beneficiary. Think of making money from the resale of a product or
recycling.

Global sourcing

Global sourcing is the practice of sourcing from the global market for goods and services
across geopolitical boundaries. Global sourcing often aims to exploit global efficiencies in the delivery of
a product or service. These efficiencies include low cost skilled labor, low cost raw material and other
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economic factors like tax breaks and low trade tariffs. A large number of Information Technology projects
and Services, including IS Applications and Mobile Apps and database services are outsourced globally to
countries like Pakistan and India for more economical pricing.

Common examples of globally sourced products or services include: labor-intensive manufactured

products produced using low-cost Chinese labor, call centers staffed with low-cost English speaking
workers in the Philippines and Pakistan and India, and IT work performed by low-cost programmers in
India and Pakistan and Eastern Europe. While these examples are examples of Low-cost country
sourcing, global sourcing is not limited to low-cost countries.

Majority of companies today strive to harness the potential of global sourcing in reducing cost. Hence it is
commonly found that global sourcing initiatives and programs form an integral part of the strategic
sourcing plan and procurement strategy of many multinational companies.

Global sourcing is often associated with a centralized procurement strategy for a multinational, wherein a
central buying organization seeks economies of scalethrough corporate-wide standardization
and benchmarking. A definition focused on this aspect of global sourcing is: "proactively integrating and
coordinating common items and materials, processes, designs, technologies, and suppliers across
worldwide purchasing, engineering, and operating locations (p. 304)

The global sourcing of goods and services has advantages and disadvantages that can go beyond low cost.
Some advantages of global sourcing, beyond low cost, include: learning how to do business in a potential
market, tapping into skills or resources unavailable domestically, developing alternate supplier/vendor
sources to stimulate competition, and increasing total supply capacity. Some key disadvantages of global
sourcing can include: hidden costs associated with different cultures and time zones, exposure to financial
and political risks in countries with (often) emerging economies, increased risk of the loss of intellectual
property, and increased monitoring costs relative to domestic supply. For manufactured goods, some key
disadvantages include long lead times, the risk of port shutdowns interrupting supply, and the difficulty of
monitoring product quality. (With regard to quality in the food industry, see Roth et al. (2008).

International procurement organizations (or IPOs) may be an element of the global sourcing strategy for a
firm. These procurement organizations take primary responsibility for identifying and developing key
suppliers across sourcing categories and help satisfy periodic sourcing requirements of the parent
organization. Such setups help provide focus in country-based sourcing efforts. Particularly in the case of
large and complex countries, such as China, where a range of sub-markets exist and suppliers span the
entire value chain of a product/commodity, such IPOs provide essential on-the-ground information.

Over time, these IPOs may grow up to be complete procurement organizations in their own right, with
fully engaged category experts and quality assurance teams. It is therefore important for firms to clearly
define an integration and scale-up plan for the IPO.
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Inventory Management
Successful inventory management involves balancing the costs of inventory with the benefits of
inventory. Many small business owners fail to appreciate fully the true costs of carrying inventory, which
include not only direct costs of storage, insurance and taxes, but also the cost of money tied up in
inventory. This fine line between keeping too much inventory and not enough is not the manager's only
concern. Others include:

Maintaining a wide assortment of stock -- but not spreading the rapidly moving ones too thin;

Increasing inventory turnover -- but not sacrificing the service level;

Keeping stock low -- but not sacrificing service or performance.

Obtaining lower prices by making volume purchases -- but not ending up with slow-moving
inventory; and

Having an adequate inventory on hand -- but not getting caught with obsolete items.

The degree of success in addressing these concerns is easier to gauge for some than for others. For
example, computing the inventory turnover ratio is a simple measure of managerial performance. This
value gives a rough guideline by which managers can set goals and evaluate performance, but it must be
realized that the turnover rate varies with the function of inventory, the type of business and how the ratio
is calculated (whether on sales or cost of goods sold). Average inventory turnover ratios for individual
industries can be obtained from trade associations.

THE PURCHASING PLAN

One of the most important aspects of inventory control is to have the items in stock at the moment they
are needed. This includes going into the market to buy the goods early enough to ensure delivery at the
proper time. Thus, buying requires advance planning to determine inventory needs for each time period
and then making the commitments without procrastination.

For retailers, planning ahead is very crucial. Since they offer new items for sale months before the actual
calendar date for the beginning of the new season, it is imperative that buying plans be formulated early
enough to allow for intelligent buying without any last minute panic purchases. The main reason for this
early offering for sale of new items is that the retailer regards the calendar date for the beginning of the
new season as the merchandise date for the end of the old season. For example, many retailers view
March 21 as the end of the spring season, June 21 as the end of summer and December 21 as the end of
winter.
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Part of your purchasing plan must include accounting for the depletion of the inventory. Before a decision
can be made as to the level of inventory to order, you must determine how long the inventory you have in
stock will last.

For instance, a retail firm must formulate a plan to ensure the sale of the greatest number of units.
Likewise, a manufacturing business must formulate a plan to ensure enough inventory is on hand for
production of a finished product.

In summary, the purchasing plan details:

When commitments should be placed;

When the first delivery should be received;

When the inventory should be peaked;

When reorders should no longer be placed; and

When the item should no longer be in stock.

Well planned purchases affect the price, delivery and availability of products for sale.

CONTROLLING YOUR INVENTORY

To maintain an in-stock position of wanted items and to dispose of unwanted items, it is necessary to
establish adequate controls over inventory on order and inventory in stock. There are several proven
methods for inventory control. They are listed below, from simplest to most complex.

Visual control enables the manager to examine the inventory visually to determine if additional
inventory is required. In very small businesses where this method is used, records may not be
needed at all or only for slow moving or expensive items.

Tickler control enables the manager to physically count a small portion of the inventory each day
so that each segment of the inventory is counted every so many days on a regular basis.

Click sheet control enables the manager to record the item as it is used on a sheet of paper. Such
information is then used for reorder purposes.

Stub control (used by retailers) enables the manager to retain a portion of the price ticket when
the item is sold. The manager can then use the stub to record the item that was sold.

As a business grows, it may find a need for a more sophisticated and technical form of inventory control.
Today, the use of computer systems to control inventory is far more feasible for small business than ever
before, both through the widespread existence of computer service organizations and the decreasing cost
of small-sized computers. Often the justification for such a computer-based system is enhanced by the
fact that company accounting and billing procedures can also be handled on the computer.

Point-of-sale terminals relay information on each item used or sold. The manager receives
information printouts at regular intervals for review and action.
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Off-line point-of-sale terminals relay information directly to the supplier's computer who uses the
information to ship additional items automatically to the buyer/inventory manager.

The final method for inventory control is done by an outside agency. A manufacturer's representative
visits the large retailer on a scheduled basis, takes the stock count and writes the reorder. Unwanted
merchandise is removed from stock and returned to the manufacturer through a predetermined, authorized
procedure.

A principal goal for many of the methods described above is to determine the minimum possible annual
cost of ordering and stocking each item. Two major control values are used: 1) the order quantity, that is,
the size and frequency of orders; and 2) the reorder point, that is, the minimum stock level at which
additional quantities are ordered. The Economic Order Quantity (EOQ) formula is one widely used
method of computing the minimum annual cost for ordering and stocking each item. The EOQ
computation takes into account the cost of placing an order, the annual sales rate, the unit cost, and the
cost of carrying inventory. Many books on management practices describe the EOQ model in detail.

DEVELOPMENTS IN INVENTORY MANAGEMENT

In recent years, two approaches have had a major impact on inventory management: Material
Requirements Planning (MRP) and Just-In-Time (JIT and Kanban). Their application is primarily within
manufacturing but suppliers might find new requirements placed on them and sometimes buyers of
manufactured items will experience a difference in delivery.

Material requirements planning is basically an information system in which sales are converted directly
into loads on the facility by sub-unit and time period. Materials are scheduled more closely, thereby
reducing inventories, and delivery times become shorter and more predictable. Its primary use is with
products composed of many components. MRP systems are practical for smaller firms. The computer
system is only one part of the total project which is usually long-term, taking one to three years to
develop.

Just-in-time inventory management is an approach which works to eliminate inventories rather than
optimize them. The inventory of raw materials and work-in-process falls to that needed in a single day.
This is accomplished by reducing set-up times and lead times so that small lots may be ordered. Suppliers
may have to make several deliveries a day or move close to the user plants to support this plan.

TIPS FOR BETTER INVENTORY MANAGEMENT

At time of delivery

Verify count -- Make sure you are receiving as many cartons as are listed on the delivery receipt.

Carefully examine each carton for visible damage -- If damage is visible, note it on the delivery
receipt and have the driver sign your copy.

After delivery, immediately open all cartons and inspect for merchandise damage.

When damage is discovered

Retain damaged items -- All damaged materials must be held at the point received.
 20

Call carrier to report damage and request inspection.

Confirm call in writing--This is not mandatory but it is one way to protect yourself.

Carrier inspection of damaged items

Have all damaged items in the receiving area -- Make certain the damaged items have not moved
from the receiving area prior to inspection by carrier.

After carrier/inspector prepares damage report, carefully read before signing.

After inspection

Keep damaged materials -- Damaged materials should not be used or disposed of without
permission by the carrier.

Do not return damaged items without written authorization from shipper/supplier.

SPECIAL TIPS FOR MANUFACTURERS

If you are in the business of bidding, specifications play a very important role. In writing specifications,
the following elements should be considered.

Do not request features or quality that are not necessary for the items' intended use.

Include full descriptions of any testing to be performed.

Include procedures for adding optional items.

Describe the quality of the items in clear terms.

The following actions can help save money when you are stocking inventory:

Substitution of less costly materials without impairing required quality;

Improvement in quality or changes in specifications that would lead to savings in process time or
other operating savings;

Developing new sources of supply;

Greater use of bulk shipments;

Quantity savings due to large volume, through consideration of economic order quantity;

A reduction in unit prices due to negotiations;

Initiating make-or-buy studies;

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Application of new purchasing techniques;

Using competition along with price, service and delivery when making the purchase selection
decision.

Top 10 Role of Advertising in Promotion of a Product

The 10 role of advertising in promotion of the product are as follows: 1. Awareness 2. Information 3.

Persuasion 4. Attitudes 5. Reminder 6. Brand Loyalty 7. Brand Image 8. Counter Competitors Claims 9.

Expansion of Markets 10. Educating the Customers.

1. Awareness:

One of the important roles of advertising is to create awareness of the product or services such as brand

name and price. The awareness of the product or services can be created through highlighting the unique

features of the brand. Nowadays, due to intense competition it is not just enough to create awareness, but

top of mind awareness is needed.

2. Information:

Advertising helps to inform the target audience about the product. Providing information is closely related

to creating awareness of the product. Potential customers must know about a product, such as product

features and uses.

Product information is very much required, especially when the product is introduced in the market, or

when product modification is undertaken. Proper product information can help the consumers in their

purchase decision.
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3. Persuasion:

When business firms offer similar products, the firm must not only inform the customers about the

products availability, but also persuade them to buy it. Through persuasive messages, the marketers try to

provide reasons regarding the superiority of their products as compared to others available in the market.

Persuasion can be undertaken through creative advertising messages, product demonstration at trade fairs,

offering free gifts, premium offers and organizing contests.

4. Attitudes:

Promotion is required to build or reinforce attitudes in the minds of target audience. The marketers expect

the target audience to develop a favourable attitude towards their brands. Positive attitude towards the

brand helps to increase its sales. Through promotional techniques like advertising, the marketer can

correct negative attitude towards the product, if any. Negative attitude can also be corrected through

public relations and advertising.

5. Reminder:

If target customers already have a positive attitude towards a firms product or service, then a reminder

objective may be necessary. The reminder objective is necessary because the satisfied customers can be

targets for competitors appeals. Well-established brands need to remind the customers about their

presence in the market. For instance, Raymond the complete man campaign is designed to remind the

customers.

6. Brand Loyalty:

Advertising helps to develop brand loyalty. Brand loyalty results in repeat purchases and favourable

recommendations to others by existing customers. Sales promotion, effective personal selling, timely and

efficient direct marketing, and other techniques help to develop brand loyalty.
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7. Brand Image:

An advertiser helps to develop a good image of the brand in the minds of target audience. There are

several factors that can be of help to audience. There are several factors, such as the character of the

personality that endorses the brand, the content of the advertising message, the nature and type of pack-

aging and the type of programmes or events sponsored, that can help to develop brand image in the minds

of target audience.

8. Counter Competitors Claims:

The marketer may counter the claims made by the major competitors. For instance, competitive

advertising is undertaken to counter the claims made by competitors either directly or indirectly. With the

help of creative advertising, the marketers can claim the superiority of their brand. The marketer may also

undertake aggressive sales promotion to counter the competition in the market.

9. Expansion of Markets:

Successful ads results in expansion of the markets. A marketer may intend to expand markets from the

local level to the regional level, from the regional level to the national level, and from the national level to

the international level. For this purpose, the marketer may undertake various techniques of promotion.

10. Educating the Customers:

Promotion may be undertaken to educate the customers. For instance, some of the advertising is

undertaken to educate the audience regarding the use of the product, handling operations, and so on.

Public awareness campaigns also educate the public regarding the negative effects of noise, air and dirt

pollution, social evils, and so on.

Roles And Importance Of Sales Promotion

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The importance of promotion in marketing is gradually increasing. Marketing specialists have mentioned

that use of sales promotion has dramatically increased in past decade. The producers have spent much

more amount on sales promotion than on advertisement. Sales promotion is equally important to

producers, middlemen and consumers. Its role or importance can be discussed as follows:

1. Importance of sales promotion to producers

Sales promotion is very important as well as effective method for manufacturers to supply products to target
market. It attracts prospective customers to new products along with the increase in demand for old products.
Increase in volume of production and sales decreases per unit cost. As a result, profit increases. Sales
promotion also increases effectiveness of personal selling , advertisement and goodwill of the firm.

2. Importance of sales promotion to intermediaries

Intermediaries/middlemen also get benefits from sales promotion. It becomes easy for wholesalers,
retailers,agents and dealers to sell goods, because it is not needed to inform consumers about the features,
utility, price, using information, etc of the products. This saves labor and time. As the businessmen get trade
discount, gift, bonus, etc from producers. It results sales volume resulting in more profit. Demand and supply
of products continues by which capital invested in stock of goods can be effectively mobilized.

3. Importance of sales promotion to consumers

The consumers also get adequate benefits from sales promotion. They can get direct benefits from the
programs such as free distribution of samples, reduction in price, coupon, participation in etc. Besides this, the
consumers get various indirect benefits from sales promotion. It increases their loyalty competition to the
product and firm, knowledge about the products, improvement in their living standards etc. Facilities to select
products, availability of goods at cheaper price, possibility of self-services etc. increase good understanding
and confidence between businessmen and consumers.
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In this way, producers, intermediaries and, consumers get benefits from sales promotion.

Importance of E-Commerce in Todays

International Business

Today, in the fast developing technology arranged business sector, e-commerce has made itself as a
suitable and a solid method for directing business. To place it in straightforward terms, e-commerce
means purchasing or offering of different items over the World Wide Web. With the broad development of
the web, the volume of exchange through e-commerce has developed exponentially throughout the years.

Significance of e-business

in todays global business

E-commerce has turned into a pattern which is quick getting up to speed as a lifestyle in numerous social
orders as far and wide as possible. depending on the sort and number of gatherings included, e-commerce
can be partitioned into models, for example, B2B (Business to Business), B2C (Business to Consumer),
C2B (Consumer to Business) and C2C (Consumer to Consumer). B2B or Business to Business model is
biggest type of e-business. In this kind of model, organizations offer different items and administrations to
one another in the same way as makers offer to merchants and wholesalers offering to retailers. In B2C or
Business to Consumer sort of e-business demonstrate, the business or organizations are offering to buyers
straightforwardly with help of online indexes.

This is the model which the layman has as a primary concern when he considers e-business. B2C kind of
model helps us to purchase a most recent book on the web, book an excursion for the whole family to
some exotic destination, purchase a most recent arranged smart phone, all through the World Wide Web,
without human connection.

In C2B or shopper to business kind of e-trade display, the purchaser posts his requirement and plan on the
web for getting a specific sort of administration and after that organizations react with their particular
offers and the customer is allowed to pick amongst the bidders which fulfills all his prerequisites and fits
in his financial plan as well. There are numerous focal points of e-commerce . It has helped the shopper to
 26

get a mixed bag of administrations and products 24X7 without needing to move physically furthermore
has served to rise above topographical limits. E-commerce has served to bring assortment to the shoppers
and they get savvy and mixture of products at the aggressive cost over the web. E-trade has upset the
thought of setting up and working a business and has expanded the range of business, in this way giving
direct profits to the buyers.

Why Brand Building Is Important

Looking out into the world today, its easy to see why brands are more important now than at any time in
the past 100 years. Brands are psychology and science brought together as a promise mark as opposed to
a trademark. Products have life cycles. Brands outlive products. Brands convey a uniform quality,
credibility and experience. Brands are valuable. Many companies put the value of their brand on their
balance sheet.

Why? Well you dont have to look very far. When Tata Motors of India bought Jaguar and Range Rover
from Ford, what did they buy? Factories? Raw Materials? Employees? No Goldman Sachs and Morgan
Stanley helped Ford sell the brands to Tata for $2.56 billion, and the brands were worth more than all
other ingredients combined.

Likewise, when Kraft bought Cadbury for $19.5 Billion what did they buy? The chocolate? The factories?
The recipes? The candy makers? No they bought the brands.

The list goes on with many examples such as InBev acquiring Budweiser to add to their house of brands
that includes Stella, Becks and Labatt. Or Geeley Motors of China acquiring cult Swedish Auto brand
Volvo. Or Mahindra of India buying Ssangyong, Koreas third largest car company.

Branding is fundamental. Branding is basic. Branding is essential. Building brands builds incredible value
for companies and corporations.

If you are still not convinced, let me give you another example. The dollar is a world brand. In essence it
is simply a piece of paper. But branding has made it valuable. All the tools of marketing and brand
building have been used to create its value. On the front you will find the owner of the brand: the Federal
Reserve. There is a testimonial from the first President of the United States, George Washington. There is
a simple users guide: This note is legal tender for debts public and private. And if youre still not
convinced, the owner has added the all important emotional message: In God We Trust. The dollar is a
 27

world brand. It confers a uniform value globally. But as I said its really just a piece of paper. Branding
has made it worth something.
I mentioned earlier that brands are more important today than in the past. There are a few reasons for this.
Firstly, the world has come online and there are many new markets and a growing middle class in places
like India, China, Brazil, Russia, South Africa, Nigeria, Indonesia and in many more places. These
consumers buy brands. They buy premium brands. The best branding today is based on a strong idea. The
best brands have remarkable creativity in advertising to help them break through peoples wall of
indifference to create brand heat and product lust. Case in point the recent turn around of Chrysler and its
reliance on marketing and advertising. Or look at the reinvention of Levis. And a final example is this
campaign by my own agency which has helped reenergize one of Americas great iconic brands Jim
Beam.
Secondly, when we create new brands at my New York City advertising agency StrawberryFrog, we have
fewer brand names to choose from. The Pharmaceutical Industry has patented everything under the sun
for new medications. This makes existing brands, with their strong, well-known names and credibility
more valuable. It also means creating a new vibrant brand is a challenge which requires a sophisticated
strategy. It is not just about a product and a name, its about a lot more.

Export Documentation And Procedures

Is there any requirement of Pre-shipment inspection and if so, by which agency

Any Certificate of Origin required - If so, from what agency.

STEP 2: - Proforma generation :

After studying the enquiry in detail, the exporter - be it Manufacturer Exporter or Merchant Exporter -
will provide a Proforma Invoice to the Buyer.

STEP 3: Order placement :

If the offer is acceptable to the Buyer in terms of price, delivery and payment terms, the Buyer will then
place an order on the Exporter, giving as much data as possible in terms of specifications, Part No.
Quantity etc. (No standard format is required for such a purchase order)

STEP 4: Order acceptance :

It is advisable that the Exporter immediately acknowledges receipt of the order, giving a schedule for the
delivery committed.

STEP 5: Goods readiness & documentation :

 28

Once the goods are ready duly packed in Export worthy cases/cartons (depending upon the mode of
despatch), the Invoice is prepared by the Exporter.

If the number of packages is more than one, a packing list is a must.

Even If the goods to be exported are excisable, no excise duty need be charged at the time of Export, as
export goods are exempt from Central Excise, but the AR4 procedure is to be followed for claiming such
an exemption.

Similarly, no Sales Tax also is payable for export of goods.

STEP 6: Goods removal from works :

There are different procedures for removing Export consignments to the Port, following the AR4
procedure, but it would be advisable to get the consignment sealed by the Central Excise authorities at the
factory premises itself, so that open inspection by Customs authorities at the Port can be avoided.

If export consignments are removed from the factory of manufacture, following the AR4 procedure,
claiming exemption of excise duty, there is an obligation cast on the exporter to provide proof of export to
the Central Excise authorities

STEP 7: Documents for C & F agent :

The Exporter is expected to provide the following documents to the Clearing & Forwarding Agents, who
are entrusted with the task of shipping the consignments, either by air or by sea.

Invoice

Packing List

Declaration in Form SDF (to meet the requirements as per FERA) in duplicate.

AR4 - first and the second copy

Any other declarations, as required by Customs

On account of the introduction of Electronic Data Interchange (EDI) system for processing shipping bills
electronically at most of the locations - both for air or sea consignments - the C&F Agents are required to
file with Customs the shipping documents, through a particular format, which will vary depending on the
nature of the shipment. Broad categories of export shipments are:

Under claim of Drawback of duty

Without claim of Drawback

Export by a 100% EOU

Under DEPB Scheme

STEP 8: Customs Clearance :

 29

After assessment of the shipping bill and examination of the cargo by Customs (where required), the
export consignments are permitted by Customs for ultimate Export. This is what the concerned Customs
officials call the LET EXPORT endorsement on the shipping bill.

STEP 9: Document Forwarding :

After completing the shipment formalities, the C & F Agents are expected to forward to the Exporter the
following documents:

Customs signed Export Invoice & Packing List

Duplicate of Form SDF

Exchange control copy of the Shipping Bill, processed electronically

AR4 (original duplicate) duly endorsed by Customs for having effected the Export

Bill of Lading or Airway bill, as the case may be.

STEP 10: Bills negotiation :

With these authenticated shipping documents, the Exporter will have to negotiate the relevant export bill
through authorized dealers of Reserve Bank, viz., Banks.

Under the Generalized System of Preference, imports from developing countries enjoy certain duty
concessions, for which the exporters in the developing countries are expected to furnish the GSP
Certificate of Origin to the Bankers, along with other shipping documents.

Broadly, payment terms can be:

DP Terms

DA Terms

Letter of Credit, payable at sight or payable at... days.

Step11: Bank to bank documents forwarding :

The negotiating Bank will scrutinize the shipping documents and forward them to the Banker of the
importer, to enable him clear the consignment.

It is expected of such authorized dealers of Reserve Bank to ensure receipt of export proceeds, which
factor has to be intimated to the Reserve Bank by means of periodical Returns.

STEP 12: Customs obligation discharge :

As indicated above, Exporters are also expected to provide proof of export to the Central Excise
authorities, on the basis of the Customs endorsements made on the reverse of AR4s and get their
obligation, on this score, discharged.

STEP 13: Receipt of Bank certificate :

 30

Authorized dealers will issue Bank Certificates to the exporter, once the payment is received and only
with the issuance of the Bank Certificate, the export transaction becomes complete.

It is mandatory on the part of the Exporters to negotiate the shipping documents only through authorized
dealers of Reserve Bank, as only through such a system Reserve Bank can ensure receipt of export
proceeds for goods shipped out of this country.

Procedure for Central Excise Clearance

Under Export

Central excise clearance is one of the procedures under exports and Imports in India. In this article,
you will learn the procedures and formalities of central excise clearance under Export. Since export
central excise clearance procedures and formalities may get amended time to time, you can update
the rules and regulations of central excise in terms of export movement of goods.

Here we can discuss about various methods of central excise clearance procedures and formalities
under export of goods.

Central Excise Clearance procedures Under Claim of Rebate (Without Examination)

Under this method, exporter pays excise duty and clears the goods on his own, without examination
by the Central Excise Officer.

Application to Excise Authorities: The exporters are allowed to remove the goods for export, on
their own, without getting the goods examined by the Central Excise officers. The application form
ARE-1 in such cases would be prepared in sixtuplicate, giving all particulars and declarations, after
removal of goods. The exporter shall submit triplicate, quadruplicate, and sixtuplicate copies of
 31

ARE-1 to the Superintendent of Central Excise having jurisdiction over the factory or the warehouse,
within twenty four hours of the removal of the consignment. He would retain the original and
duplicate copies for presenting along with the consignment to the Customs Officer at the point of
export.

Examination by the Central Excise:

The jurisdiction Superintendent of Central Excise shall examine the information contained in ARE-1
and verify the facts of payment of duty and other certificates/ declarations made by the exporter.
After he is satisfied that the information contained in the ARE-1 is true, he will sign at appropriate
places in the four copies of ARE-1 as under.

(i) Triplicate: to the rebate sanctioning authority viz. Maritime Collector of Central Excise or the
Assistant Commissioner of the Central Excise as declared by the exporter on the ARE-1. This copy,
on the request of exporter, may be sealed and handed over to the exporter / his authorized agent for
presenting to the rebate sanctioning authority.

(ii) Quadruplicate: To the Chief Accounts Officer in the Commissionerate Headquarters.

(iii) Quintuplicate: Office copy to be retained by the Central Excise Officer.

(iv) SIXT plicate: To be given to the exporter.

Examination by Customs Authorities:

In this case, the customs authorities would invariably examine the goods, as excise authorities have
not examined goods. The rest of the procedure is the same detailed in the earlier procedure for
Central Excise clearance under Claim of Rebate (WITH EXAMINATION).
 32

Procedure for Excise Clearance under Bond / Letter Undertaking

The procedure under this rule is similar to the one under claim for rebate. This is governed under
Rule 13.

Under this rule, there is no PLA(personal Ledger Account) as no duty is paid. Instead of payment of
duty, the manufacturer exporter executes bond/letter of undertaking to the amount equivalent to the
excise duty. Bond can be executed with surety or without surety. Such a bond is to be supported by
the bank guarantee to protect financial interests of excise department. Exporters of the following
categories are allowed to execute bond with surety and do not have to furnish any bank guarantee or
cash security.

Super Star Trading House

Star Trading House

Trading House

Export House

Registered Exporters (Registered with relevant Export Promotion Council)

Manufacturers registered with Central Excise Department.

Letter of Under taking by Manufacture- Exporter

Manufacturer-Exporter is neither needed to pay excise duty nor file the excise Bond.

Manufacturer-Exporter can obtain clearance of export shipment by producing Letter of Undertaking.

This is a great concession to the manufacturer who directly exports the goods.
 33

Export Credit Guarantee Corporation of India

The ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company
wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export
credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. Government
of India had initially set up Export Risks Insurance Corporation (ERIC) in July 1957. It was transformed
into Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee
Corporation of India in 1983.

What does ECGC do?

Provides a range of credit risk insurance covers to exporters against loss in export of goods and
services as well.

Offers guarantees to banks and financial institutions to enable exporters to obtain better facilities
from them.

Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad
in the form of equity or loan and advances.

How does ECGC help exporters?

Offers insurance protection to exporters against payment risks

Provides guidance in export-related activities

Makes available information on different countries with its own credit ratings

Makes it easy to obtain export finance from banks/financial institutions

Assists exporters in recovering bad debt

Provides information on credit-worthiness of overseas buyers

 34

Bibliography

http://www.zeepedia.com/

https://www.boundless.com

www.yourarticlelibrary.com

http://study.com/

http://spendmatters.com/

http://www.ipscmi.org/

http://marketinglord.blogspot.in/

http://www.forbes.com

http://agriexchange.apeda.gov.in/