Export management is the application of managerial process to the serviceable area of exports. It is the form of management which is required to bring about coordination and integration of all those involved in an export business. It is, thus, concerned with securing export orders and accomplishing objectives to successfully complete in time as per the requirements specified by the overseas buyers. The main purpose is to secure orders to make certain timely delivery of goods as per agreed norms of quality and other specifications including terms and conditions agreed to between the exporter and the importer.
FULL SERVICE EXPORT MANAGEMENT
The entire export management process revolves around reviewing a business’s export transaction and processes and creating a manual that will include the following administrative elements: management policy, responsible officials record keeping, training, internal reviews, screening elements, notification, and order processing.
STEPS IN EXPORT MANAGEMENT PROCESS
The long-term nature of export market development efforts, together with the risks assumed implies that a planned methodical approach to exporting is imperative. To reduce uncertainty and risks, the exporter must set objectives, analyze strategic alternatives, formulate action plans, allocate resources, set time-tables and monitor performance. Without a formal approach as ensured by an efficient export management system, the enterprise cannot sustain a profitable export effort. An export management process essentially involves the following steps:
In addition to the steps outlined here to be followed are, to develop a plan that will be of practical aid to the company, not only in charting a course for the business, including export and keeping it under control but also in dealing with banks and other agencies who may want to know what is intended to be done with their money.
When a company decides that it is ready to export, it must formulate an export strategy. Strategy formulation is at the core of export management. It tells the firm where it is going and how it should get. When a strategy has been formulated, programs must be delivered for each strategic element. A company strategy is in effect a blueprint for competing on target export markets. An explicit export strategy provides a unified sense of purpose, to which the staff of the enterprise can relate. In the development of such strategy, import regulations and other trade barriers must be taken into consideration, as they have a critical impact on the outcomes of the export venture.
To implement a strategy, an export-marketing plan is required. Business-to-Business marketing is the key here. The marketing strategy chosen should reflect the answer to the following key questions:
- Should the company enter the export market in a big way?
- Are low prices essential for success?
- Will product difference play a major role in competitive positioning?
- Will a large-scale promotional campaign be required?
The strategy chosen should reflect the management’s judgment of the most effective ways of overcoming the problems and exploiting the opportunities identified by SWOT analysis. An Export Marketing Plan consists of the following elements:
The marketing strategies cover a broad range of issues, including:
- The choice of export market
- Identification and choice of importers/agents/distributors
- Distribution adaptation
- Packaging, labeling, branding
- Adding value to the basic product
- Use of trade fairs/shows as promotional tools
- Export financing
- Administrative procedures for exports
- Negotiation of contractual terms and conditions
- Export Market Research
The export marketing plan and the export strategy are closely interrelated with the former answering all questions on how the latter is to be implemented and directing the enterprise to the attainment of the strategic objective. As the various steps are put into action, there is a continuous interaction between the two. The development of export marketing plans requires decisions on the role that exporting is to play in the company’s growth, the scope and nature of product ties and markets abroad, precise export performance goals and level of management commitment to the export venture. A plan is only as good as the quality of the basic data gathered and the analysis undertaken during the planning process. It is important to obtain the participation of all levels of management in this process and to impress upon them that; to succeed company-wide commitment to export goals is essential.
ROLE OF AN EXPORT MANAGER
An export venture is more likely to succeed when a key person in the enterprise is assigned the export task. To develop an export business, the primary role is that of an export manager in conducting the export business. The traditional management structures with functional classification (Purchases, marketing, finance, accounts, administration etc.) cannot ensure effectiveness in export management through all stages in the export cycle. There is, therefore, a need for separate export department headed by an export manager. The basic function of an export manager is to bring about coordination and integration of all those involved in the export transaction from within the traditional management structures (functional organization) and concerned external agencies to ensure timely shipment of goods as per buyer’s order.
The export manager has the critical role in managing all operations in a timely manner. Once a decision is taken to establish export business, the first and the foremost task is to plan to secure an export order. After confirming the order to the buyer, the next step is to create an organization structure for it and create the required team of personnel for its execution. The success of the export order depends on export manager’s efficient management and handling of export orders. He has to maintain liaison with the importer, prepare plans for its implementation and issue necessary executive instructions to the export employees. He also has to develop an information system so that there is continuous flow of information on the progress of the order. In case the progress is not satisfactory and some tasks are not performed as per prescribed schedules, export managers have the duty to evaluate the variances and tasks suitable corrective measures, if necessary, for the purpose and ultimately submit report on the progress of the work to the top management. The major functions of the export manager in managing orders here are: procurement of export order, planning for export order execution, direction for exports, export order execution, importer liaison, export order evaluation, reprogramming, documentation, and reporting on export order execution. In the pursuance of it, the manager can play a combination of roles as change agent, motivator, resource person, organizer and so on. He should have knowledge of the techniques applied in export planning, financial management, inventory management, merchandising, risk management, foreign exchange operations, exchange control, negotiation with banks information systems, communication, personnel management and industrial relations, co-ordination and control. The effectiveness of export manager will, however, depend upon the extent of authority delegated to him by the top management.
Exporting requires expertise, in addition to careful planning and suitable products. Managers sometimes underestimate the complexity of tasks, the risks involved and consequences of failure. A realistic understanding of the commitment required to succeed in an export venture is essential for a successful export management process. Good export management gets the export order completed within the time and the budget allocated for it.