Exporting is the process in which businesses from one nation sell their products and services to clients or customers in another nation. Energy and natural resources such as oil, minerals, as well as raw materials like food or textiles and completed consumer goods like electronics, beauty products, FMCG products, etc. are frequently exported between the nations. Exporting is the practice of producers and merchants who sell their wares to consumers in other countries.
Exporting is one of the very important methods when it comes to business expansion, market exposure and revenue generation. It is one of the important concepts in modern economics and the modern business world. Businesses can greatly increase their market reach and reduce their reliance on any one particular market through exporting.
IMPORTANCE OF EXPORTING
Exporting provides numerous benefits and opportunities to the business. Some of the importance of exporting are given below:
Exporting can give business access to new concepts, management strategies, marketing tactics, and competitive strategies that can help them better position their company in the international market and produce innovative products and services in the market.
One technique to increase the sales potential is by exporting. Exporting enables a business to grow its market beyond the reach of a constrained and oversaturated national market. This helps to increase the sales of the business as they are able to reach and market their products to larger customers.
By branching out beyond the home market to the foreign market, production levels of the business will rise along with sales. Depending on the manufacturing method, expenses per product often decrease as production volumes increase often known as economies of scale. This assists in lowering the costs of business and increasing their revenue.
When the company exports their goods and services, their reliance on sales to the local market is lessened. Therefore, if the company has been able to grow their business to global markets, the impact on their operations should become less severe if home economic conditions worsen. Additionally, it is advised to avoid becoming overly reliant on a particular export market since this could leave the company too sensitive to changes in that market.
Extending the Product Life Cycle
The products of the company may be nearing the end of its useful life in the domestic market. Finding an export market in this situation would be great in order to increase the product’s lifespan.
Export marketing is the marketing process of selling products in international land. It is the systematic process of creating and distributing products and services in foreign markets. Long formalities and procedures are involved in export marketing. It involves all the marketing tactics that are required to make a product sell in foreign land. Therefore, the export marketing manager must carry out a variety of marketing tasks, including market research, legal regulations, designing products, packaging, pricing, and advertising, among others.
In export marketing, products are shipped overseas in accordance with the policies established by both the exporting and importing countries. Due of foreign constraints, international competition, extensive procedures and formalities, and other factors, export marketing is more difficult than domestic marketing. Additionally, a firm gets significantly more complicated when it crosses international borders. Additionally, export marketing provides several prospects for generating significant income and priceless foreign currency.
IMPORTANCE OF EXPORT MARKETING
Export marketing is important to both the country and the businesses because it provides immense benefits to the economy of the country. The following are some of the importance of export marketing:
Getting paid in foreign currency
Exports provide the exporting nation or firm with important foreign currency, which is mostly needed to pay for the purchase of capital goods, raw materials, spare parts, and components, as well as the import of advance payments. Exporting increases the foreign currency reserve of the business. In macro terms, increase in net export balances the foreign currency reserve of the nation
Balance of payment
Large-scale exports help countries achieve a favorable balance of payments position by resolving their balance of payments issues. Large-scale exports can eliminate the deficit in the balance of payments and the trade balance.
Reputation in the world
An organization that engages in exports has the potential to become well-known both domestically and in foreign markets. Companies with an international reputation such as Samsung, Amazon, Phillips, Sony, Coca-Cola, McDonald’s, Unilever, etc. have leveraged the power of export marketing to increase their reputation and sustainability in the international market.
After satisfying domestic demand, a corporation can export any excess production. As a result, production can continue until it reaches its maximum capacity. Large-scale production will become more affordable as a result. Export marketing induces Export benefits, exemptions motivate industries to invest their resources towards production. Exporting encourages production as they have foreign market to sell their products and services.
A company that engages in both local and international marketing can divide its marketing risk into two components. The profit made in the other section or area can make up for the loss in the first component i.e. marketing. In this way, companies can distribute their risk with the help of export marketing.
Increasing organizational effectiveness
The exporter company can increase their total organizational efficiency through research, training, and experience dealing with overseas markets. Thus, export marketing helps the company to increase their efficiency and effectiveness.
Enhancing product standards
To reach international standards, an exporting company must maintain and raise quality standards. Customers can benefit from higher quality items both domestically and internationally as a result.
A business organization can charge more for its products by exporting. If the exporters provide high-quality goods, they can charge prices that are greater than those in the domestic market, increasing their profit margin. Similarly, export marketing increases the tendency sales volume of the business due to national and international operation. Such an increase in volume increases revenue and profits.