EXPORT AND IMPORT MANAGEMENT

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Contents
INTRODUCTION................................................................................................................................2
MARKETING PLAN............................................................................................................................2
Product Selection.........................................................................................................................2
Ownership Structure....................................................................................................................2
Business or Trade name...............................................................................................................3
Marketing Plan: In Detail.............................................................................................................3
PLANNING & PREPARATION............................................................................................................4
Country & Product.......................................................................................................................4
Market Research..........................................................................................................................4
Shoeniverse: Business Plan..........................................................................................................5
CHANNELS OF DISTRIBUTION..........................................................................................................7
Mode of Entry & Transport..........................................................................................................7
Direct & Indirect Channels...........................................................................................................7
Pros & Cons of Direct Channel of distribution.............................................................................8
LOGISTICS & RISK.............................................................................................................................8
Packing & Insurance.....................................................................................................................8
Logistics Process...........................................................................................................................8
External Influence on Logistics Process.......................................................................................9
Risks in Foreign Trade..................................................................................................................9
Logistics Problems & Solutions....................................................................................................9
TRADE DOCUMENTS......................................................................................................................10
Payment Methods......................................................................................................................13
REGULATIONS & TAXES.................................................................................................................13
Conclusion & Recommendation................................................................................................14
Bibliography...................................................................................................................................15

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 INTRODUCTION

UAE has always secured a special position and is considered a major logistics hub for
international trade around the globe. It has tactically grown its capabilities with reference to
imports and exports. The major GCC Coastline emerged as a main port and led to major
developments in the field of global trade. UAE’s strategic position in the region provides for a
huge amount of imports and exports on annual basis. Now, let’s look at an import/export
business from UAE to China and vice versa [ CITATION UAE \l 1033 ].

MARKETING PLAN

Product Selection
We have decided to set up an import/export business in the Shoes industry. The shoes would be
manufactured in China, as manufacturing costs are bit low there compared to UAE. But, some of
the manufacturing would be done in UAE as well and later it can be sent to China for some re-
designing, if needed. After production, shoes would be exported to UAE for sales and they
would also be sold in China and other parts of the world.

We have selected Shoes business as its potential demand is increasing day-by-day as the global
population increases. Although, its design vary from place to place but still its main structure
remains the same. So, we have chosen to set up Shoes business for import and export.

Ownership Structure
This shoes business is a result of Partnership between three friends of Abu Dhabi, UAE. After
setting up a production factory and a shoe outlet, they aim to start export and import
immediately. Some of the perks of having a partnership structure of business are as follows:

o Less formalities and few legal obligations and bindings,

o Quite easy to start and share the burden of raising capital for the business venture,
o More knowledge, variety of ideas and risks are spread,

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o Better and effective decision making as there is more than one brain to think.

But on the other hand, there are few disadvantages to partners as well, that are given below:

o It has unlimited liability and there is no separate legal identity of this business type,
o There are chances of difference of opinions leading to broken partnerships,
o Profits have to be shared which may lead to dispute, etc.

Business or Trade name

The business name would be “Shoeniverse”. They had to register it with the State agency
responsible for handling partnerships after they have decided the business name. Availability of
the business name is also checked before proceeding further. Afterwards, partnership name is
registered and an agreement is signed between the partners. Later, partnership is registered by
filing a certificate and finally permits and licenses are obtained accordingly.

Any business that is going to start import/export needs to have an account in the international
bank, and regularly check with the country’s permits or business licenses that are needed.

Marketing Plan: In Detail

Talking about the product, Shoeniverse is going to manufacture different types of shoes that are
as follows:

o Men’s shoes
o Women’s shoes
o Sports’ shoes
o Kids wear, and every other type of variety available in the market.

We aim to provide best quality shoes not only made up of leather, wood or canvas but also from
rubber, plastics and other raw materials from petrochemicals.

Industry Overview: Leather shoes manufactured in China are one of the major strengths of the
Chinese market and its demand is increasing day-by-day with the raising population and better
living standards of the people overall. China is the largest producer of foot wears globally.
Producing quality shoes with competitive prices is one of the main qualities of the Chinese
industry. Along with this, they maintain modern and latest designs in their production to attract

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customers from all around the world. Cheap raw materials and plenty of skilled labour is the
key resources for the Chinese market from which we can get advantage in the form of trade.

The main competitors are Daphne International Limited, Red Dragonfly, Yue Yuen Limited in
the Chinese market and Converse, Timberland and Skeches in the UAE Shoe industry. Along
with these giants like Aldo, Reebok, Nike and other big names are also going to give a fierce
competition to Shoeniverse.

PLANNING & PREPARATION

Now, let’s start the planning towards setting up the import/export business for Shoeniverse.

Country & Product

Shoeniverse has decided to operate their business operations in China as it will then export shoes
to UAE and latter can also export some of the shoes to China for re-design (as manufacturing
will take place in both the countries). In this way there will be boost of international trade
between both the countries.

Product: Shoeniverse will target high-end (niche) and medium priced customers. This is going to
take place as they will be making regular shoes (medium-priced) and also special shoes for
“make-to-order” customers, where they can order shoes according to their special needs and
wants. Then they will be charged according to that and this would be a high end pricing.

Market Research
To become a market leader, a firm must produce according to the needs and wants of their
customers. For this, they need to conduct an efficient market research that tells the company
explicitly about what designs, colours and shapes of shoes customers want and are trending these
days.

Shoeniverse has chosen a systematic approach for selecting a product to export and it will carry
out a mix of Primary as well as Secondary research. Tool of online surveys can be used and
potential customers can fill up the questionnaires that would be displayed on their social media
sites or maybe sent via emails. Online surveys can be useful as:

o Direct contact can be maintained with the customers and they can tell about their needs easily
but maybe their responses are biased or inaccurate.
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o This method is cheap and less time-consuming compared to conducting interviews or focus
groups.

On the other hand, secondary research can also be used in the following ways:

o By analyzing various trade and economics stats, specifically stats regarding certain countries
and products.
o Similarly by taking valuable opinions of various experts can also be helpful or even going to
some international trade events or seminars is useful in getting information.
o Most significantly, being aware of the world news is very important; especially that affects
the international economy.

So, whenever an export/import business is going to be setup, it is recommended for them to go

with a mix of primary and secondary research to have a clear picture of other economy as well as
customers. After deciding the research methodologies, the business has to go through the
International Market Assessment as well that starts from basic needs screening and goes all the
way to competitive and field trip screening.

Shoeniverse: Business Plan

The business plan for an international business is given in detail below:

Shoeniverse will best quality shoes of leather, rubber, plastic or even

Executive Summary fabric. Mainly the manufacturing will take place in China and UAE.
Later shoes would be exported to UAE and other parts for sales. As the
shoe market is growing day by day and China lower manufacturing
costs, so Shoeniverse can get advantage out of that.
It is a partnership of three friends and they have decided now to start
Industry & Company import & exports of shoes to increase their market share. Main
Overview branches would be operated in UAE and China. To cater to the
competition from big giants, Shoeniverse plans to come up with shoes
that are always in demand and in line with the latest fashion trends.
Shoeniverse is a shoe manufacturing industry that produces wide range
of footwear for men, women and kids in different shapes and styles.

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 The target market is basically to cater the men, women and kids by
Target Market producing normal shoes (regular) as well as make-to-order shoes for
special customers with specific needs and demands.
Brand awareness is to be done using internet (Social media) and be
Marketing & Sales sending letters/brochures to the residents nearby the factory. Place
Strategy banners and flexes on some of the main roads of the city and giving a
loyalty program and an after-sale service to our customers. Along with
this first few customers will be getting discounts as well. Encourage
our customers for referrals (positive word-of-mouth)
First of all, we are going to need an Export department now. All
Management & decisions are to be made regarding locations, designs and demands of
Organization those specific customers. Other major Management Personnel would
be CEO, HR/Admin Manager, Accounts Manager, Factory &
Merchandise Manager, Sales/Marketing Manager, Footwear Designers
and Client Service representative, etc.
Long-term goal is to be the market leader globally and increase market
Long-term share by 50%. Earn revenue and start international trade of shoes in
Developmental Plan almost all the developed parts of the world.

The three partners have contributed their share of capital for

Financial Plan investment into Shoeniverse. The total estimated cost is about
$900,000 keeping in mind the salaries of employees, fee of
registration, expenses for licensing, marketing expenses, cost of
business consultant, cost of setting up an outlet, cost of purchasing
CCTVs, office furniture, buying a website, etc.
Pricing strategy to be used is Cost-plus (at beginning) to cover costs
and earn a profit mark-up and later on to charge price skimming (high
prices for high end customers)

CHANNELS OF DISTRIBUTION
Now, let’s talk about the channels of distribution used in an export business.

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Mode of Entry & Transport
Shoeniverse is going to select Exporting as its main mode of entry into other countries. Other main modes
of entry are: Licensing & franchising, Partnering & Strategic alliances, Acquisitions and Joint Ventures.
Exporting is one of the easiest ways of expanding and starting operations into other countries.
Shoeniverse would have many advantages of exporting that are as follows:

o Fast and quick entry with less risk

o May also have local market knowledge (if proper market research is done or contact with any local
retailer/distributor)

But on the other hand, there are few drawbacks as well, which are:

o There may be low control of the business or may be less awareness in the local market
o Maybe negative impact of transportation (huge costs).
o Lot of advertising and marketing/promotion needs to be done.

Transport costs are also too high and if the other country has imposed import tariffs (tax on imports) than
the cost is almost the double. This is the one of the major drawbacks of exporting. Shoeniverse needs to
pay an additional amount of money to its distributors and partners working in China so that they can
make the brand more aware to the people.

As shoes are light weight items, and not heavy products, export by air would be preferred.

Direct & Indirect Channels

Shoeniverse is going to practice the Direct channel of distribution in order to maintain control
and save costs that would not be paid to any middlemen. But obviously this way is costly as well
as time consuming but the business would be in direct contact with the customers. Secondly,
Shoeniverse can also use E-commerce to sell directly to its customers through online buying and
selling. This is also a good way to maintain good relations with the customers and act according
to their demands.

Pros & Cons of Direct Channel of distribution

Let’s discuss the advantages and disadvantages of using direct channel of distribution.

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Advantages are as follows:

o Selling directly to the foreign distributors let us save up the cost of the middlemen
o We can be aware of the needs and wants of customers as this is the closest channel to the
consumers.
o This gives the manufacturer more control over the distribution.
o Consumers can get the products in less time

But, on the other hand, we have disadvantages as well, they are:

o Cost of selling directly can be very expensive

o Sometimes maybe hard to reach to the customers

LOGISTICS & RISK

While exports are done, in time delivery of inbound and outbound materials must be made sure
of. This is basically the responsibility of the Logistics department.

Packing & Insurance

Packing must be done in a way that items remain in their fit and fine position while they are
being exported/imported. To keep costs reduced, economical packaging materials should be
used.

Insurance of goods is necessary in case of any loss or fault. Sometimes, insurance is not done,
when exporters are sure that it is not needed.

Logistics Process
This process is important in export process because it will estimate time and money needed in
this entire process and lead to efficient allocation of resources. For example, as we are using the
air ways for our export, we need to know the full name and address of the shipper, the
dimensions of the cargo, products details, proper labelling and packaging along with insurance is
to be done. Not only this, we need to know the Inco terms and all the other legal documents
should be there.

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External Influence on Logistics Process
External influence is going to play a very vital role in the logistics process of exports and
imports. This can be in the form of Technology, Rules & regulations and the Competition.
Everyone tries to be competitive by reducing costs and making huge profits and similarly by
using advanced technology of the era. The firms that lack these resources are going to fall out of
this race of globalization.

Risks in Foreign Trade

Everything that has advantages is also going to have disadvantages alongside. Similarly, there
are some potential risks associated with the foreign trade that are:

o Foreign exchange risks: the difference between the two countries’ currency and their worth
comes up as the first risk. This is because it is going to impact the payment methods
directly.
o Political risks: The political situation of any country is going to pose as the second threat if
the political stability is not there. So, for successful trade, political prosperity is necessary.
o Foreign credit risk: This risk is associated with the delayed payments by the buyers as it is
going to put a bad impact on cash flows of the business [ CITATION Tea19 \l 1033 ].

Logistics Problems & Solutions

Some of the major logistics trade problems are given below:

o Dwindling Economy
o Government rules and regulations
o Improper Technology Implementation
o Environmental Issues
o Unclear business planning
o Inexperience with border control & distribution laws
o Not sure if product will sell well, etc.

There are solutions to these problems as well. Every business that wants to engage in exporting
needs to do a proper planning in terms of logistics as well as its products’ sales. Planning is the
key, plan smartly and tries to understand the new market deeply. Try to be realistic when it
comes to expansion. Come up with digital solutions and for which online existence is a must.

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 Use IT in the most efficient manner. Accurate rates are also equally important. So, all in all, a
collaborative mindset is needed to get rid of these problems [ CITATION Ben15 \l 1033 ].

TRADE DOCUMENTS
Exports documents are as follows:

o Commercial Invoice: It is just like a bill of all the goods sent from seller to the buyer. Mainly
they are useful to the governments to access the goods and look out for the custom duties for
those goods. A sample of invoice has been attached below:

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o Export Packing List: This is a detailed document about seller, buyer, shipper, invoice no.,
shipment date, transport mode, products description, quantity, weight, etc. Both the parties
have this packing list with them. Sample Packing list is given below:

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o Bill of Lading: It is just like a contract between the owner of the goods and the carrier. It has
two types; straight bill of lading and shipper’s bill of lading. Its sample is attached below:

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o Import Document includes Quotation that tells about the price, quality, and quantity of the
goods being exported to the other country. Its sample is given below:

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Payment Methods
Payment methods to be used are FOB (free on board) for make to order shoes and for regular
shoes we will use DDP (Delivery Duty Paid) in few initial months and after that we will use CIF
(Cost Insurance and Freight).

REGULATIONS & TAXES

Policies and Rules of Exports: Every nation has its own rules and regulations according to
imports and exports. This is going to get affected by:

o Tariffs and taxes

o Import Quotas
o Economic environment

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o Trade policy objectives and by sector, etc.

Conclusion & Recommendation

A number of factors need to be considered by the global policy makers in regard to imports and
exports. Globalization and free trade are one of the greatest tools to enhance living standards of
the people of this era. By reducing import tariffs and quotas, this can be encouraged and global
economic trade can be given a huge boost. If we want our regional and global value streams to
improve, we must reduce different trade barriers. For this, improvement is needed in physical
infrastructures, private sectors, and different rules and regulations of every nation. Thus, in my
point-of-view, limited number of trade barriers is a good idea to support local business but totally
vanishing the entire global trade is also not the solution. So, countries must come together and
support globalisation [ CITATION UAE20 \l 1033 ].

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Bibliography
Capstick, C. UAE Imports and Exports Guide. Dubai, UAE: UAE Ministry of Economy.

Shepherd, B. (2015). Overcoming trade logisticschallenges: Asia-Pacificexperiences. Asia

Pacific Journal of Marketingand Logistics .

Thomas, T. (2019). 5 Risks Of Exporting Manufactured Goods — And How To Avoid Them.

UAE. (n.d.). Trade Policy Review. Retrieved 2020, from

https://www.wto.org/english/tratop_e/tpr_e/s262_sum_e.pdf

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