Export tricks and techniques: A neglected part in Nepal

Export is sweet  because  of the money in it. Consider the world as your market. Choose export-oriented industries that are competitive, and promote them. Some of the export incentives like duty drawback, excise refund, customs refund and vat refund are cash compensatory. The export product selection in Nepal is heavily based on the labor content of  products, promotion of labor-intensive products such as sunflower oil, soybean oil, thread, carpets, Pashmina,  garments, handicrafts and promotion of skills-based  products like software.

Pricing is a matter of strategy. Decisions related to pricing affect cash flows and margins much more rapidly than any other marketing decisions. But this factor has not been considered in Nepal.

Distributive options for export marketing are: establishment of distribution and sales offices abroad, appointment of distributors and agents, direct sale to importers and members at the bottom of the distribution channel such as department store, chain store or boutique, and end users. This mostly happens in tender business. Selection of  an appropriate  agent  requires a good  deal  of  homework. Model agency profiles must  assess character, capacity and capital. Points  to be considered  while selecting  agents are the size of  the agency firm, desirable  outlets,  complementary product life,  specialized sales staff, location, marketing  facilities, identification  process, selection process, details  regarding  the firm, details  regarding  business  conducted,  references  of agency  firms, and  selection of the relationship between the parties and the products. But this aspect is lacking in Nepal. One of the considerations in channel selection is its impact on final costs. Under the  Bangkok  agreement  negotiated  under the UN’s ESCAP, the import of specialized  items are allowed in the participating countries at over MFN rates. In addition to the customs duties normally chargeable , there are two special  duties that a government of the importing country can impose under specific  situations. These are the anti-dumping duties and the countervailing duty. Anti-dumping duties are  imposed when governments of importing countries can prove that foreign exporters are selling their  products at less than fair prices, which are  causing  damage to competing firms. Countervailing duties, on the other hand, can be  payable if it can be proved that respective governments are subsidizing exports, enabling the firms to lower their prices. Some  forms of export subsidy are not allowed under the GATT (WTO) system. But this knowledge is lacking in Nepal even though we have some acts to govern the system. Some countries  have a twin system of import control: one control through import licensing and the other through foreign exchange authorization. Import deposit scheme is also practiced by some governments. Some quotas are extensively used both in developed and developing countries' markets. Quotas  are administered  through the import licensing  system. Among the various types of quotas, some of the important ones are import control regime and non-tariff  barriers. These include  standard regulations, administrative measures which make imports difficult, health and sanitary regulations. Different countries have different systems for assessing the duty payable on imports. GATT (WTO) has tried to bring uniformity in customs valuation procedures through what is known as the customs valuation code. Consumer product features are: color preferences, pack sizes, styling, features, material used, usage conditions, use preferences. In packaging for consumer goods, color preferences preferred, container form, preferred  material for packaging, preference for reusable, container packaging requirements for channel members, packaging, requirements in terms of product needs, protective needs should be considered. Packaging requirements for shipping cover mode of transport, port handling charges, storage conditions in material and bonded warehouses. Legal requirements for product cover labeling requirements, band on the use of specific use of input and mandatory safety regulations. Marketing  strategies formulation covers buyer's profile on the basis of demographic, psycho-graphic, location-wise clusters, preferred purchase outlets, purchase decisions, the country image in the buyer's  perception. Competition arrangements cover main competitors, production-related competitive profile in terms of product quality, price, delivery and services and identification of market segments. Marketing channel  covers the areas related to the channel available, channel being used by dominant suppliers, accessibility to the desired channel, cost of entering channel and needs of channel members. Physical distribution includes mode of transportation required, cost of transportation, packaging requirement and warehousing needs. Pricing and payment terms cover prevailing prices, normal quotation terms, preferential invoicing currency, normal payment terms and normal credit period allowed. Under promotion, media available and costs of  media used by dominant suppliers should be taken  into account. Product supply profile includes product description, standards used abroad, capability to conform to international standards, major producing countries, market centers, estimated production, major buyers and others. Government policy includes status under export policy, cash compensatory support, duty and duty drawback, requirements in payment terms, letter of credit,  if any. Besides these, export tricks and techniques can be learned from the other country's export promotion experience. The author is former Deputy Executive Director of Trade and Export Promotion Center