CHAPTER 1 EXPORT MARKETING

1.1 INTRODUCTION: Export marketing means exporting goods to other countries of the world. It involves lengthy procedure and formalities. In export marketing, goods are sent abroad as per the procedures framed by the exporting country as well as by the importing country. Export marketing is more complicated to domestic marketing due to international restrictions, global competition, lengthy procedures and formalities and so on. Moreover, when a business crossed the borders of a nation, it becomes infinitely more complex. Along with this, export marketing offers ample opportunities for earning huge profits and valuable foreign exchange. Export marketing has wider economic significance as it offers various advantages to the national economy. It promotes economic / business / industrial development, to earn foreign exchange and ensures optimum utilization of available resources. Every country takes various policy initiatives for promoting exports and for meaningful participation in global marketing. Global business is a reality and every country has to participate in it for mutual benefits. Every country has to open up its markets to other countries and also try to enter in the markets of other countries in the best possible manner. This is a normal rule which every country has to follow under the present global marketing environment. In the absence of such participation in global marketing, the process of economic development of the country comes in danger. 1.2 DEFINITIONS OF EXPORT MARKETING: 1) According to B. S. Rathor Export marketing includes the management of marketing activities for products which cross the national boundaries of a country. 2) Export marketing means marketing of goods and servicesbeyond the national boundaries. 1.3 FEATURES OF EXPORT MARKETING The main important features of export marketing are as follows. 1) Systematic Process Export marketing is a systematic process of developing and distributing goods and services in overseas markets. The export marketing manager needs to undertake various marketing activities, such as marketing research, product design, branding, packaging, pricing, promotion etc. To undertake the various marketing activities, the export marketing manager should collect

the right information from the right source; analyze it properly and then take systematic export marketing decisions. 2) Large Scale Operations Normally, export marketing is undertaken on a large scale.Emphasis is placed on large orders in order to obtain economies in large sole production and distribution of goods. The economies of large scale help the exporter to quote competitive prices in the overseas markets. Exporting goods in small quantities is costly due to heavy transport cost and other formalities. 3) Dominance of Multinational Corporations Export marketing is dominated by MNCs, from USA, Europe and Japan. They are in a position to develop world wide contacts through their network and conduct business operations efficiently and economically. They produce quality goods at low cost and also on massive scale. 4) Customer Focus The focus of export marketing is on the customer. The exporter needs to identify customers needs and wants and accordingly design and develop products to generate and enhance customer satisfaction. The focus on customer will not only bring in higher sales in the overseas markets, but it will also improve andenhance goodwill of the firm. 5) Trade barriers Export marketing is not free like internal marketing. There are various trade barriers because of the protective policies of different countries. Tariff and non-tariff barriers are used by countries for restricting import. The export marketing manager must have a good knowledge of trade barriers imposed by importing countries. 6) Trading Blocs Export trade is also affected by trading blocs, certain nations form trading bloc for their mutual benefit and economic development. The non-members face problems in trading with the members of a trading bloc due to common external barriers. Indian exporters should have a good knowledge of important trading blocs such as NAFTA, European Union and ASEAN. 7) Three faced competition In export markets, exporters have to face three-faced competition, i.e., competition from the three angles from the other suppliers of the exporters country, from the local producers of importing country and from theexporters of competing nations.

8) Documentation

Export marketing is subject to various documentation formalities. Exporters require various documents to submit them to 4various authorities such as customs, port trust etc. The documents include Shipping Bill, Consular Invoice, Certificate of Origin etc. 9) Foreign exchange regulations Export trade is subject to foreign exchange regulations imposed by different countries. These regulations relate to payments and collection of export proceeds. Such restrictions affect free movement of goods among the countries of the world. 10) Marketing mix Export marketing requires the right marketing mix for the target markets, i.e. exporting the right product, at the right price, at the right place and with the right promotion. The exporter can adopt different marketing mixes for different export markets, so as to maximize exports and earn higher returns. 11) International marketing Research Export marketing requires the support of marketing research in the form of market survey, product survey, product research and development as it is highly competitive. Various challenges,identification of needs and wants of foreign buyer in export marketing can be dealt with through international marketing research. 12) Spreading of Risks Export marketing helps to spread risks of business. Normally export firms sell in a number of overseas markets. If they are affected by risks (losses) in one market, they may be able to spread business risks due to good return from some other markets. 13) Reputation Export marketing brings name and goodwill to the export firm. Also, the country of its origin the gets reputation. The reputation enables the export firm to command good sales in the domestic market as well as export market.

1.4 IMPORTANCE OF EXPORT MARKETING: Exports are important for all countries whether developed or underdeveloped. The need / importance / advantages of export marketing can be explained from the viewpoint of a country and that of business organization. 1) Earning foreign exchange Exports bring valuable foreign exchange to the exporting country, which is mainly required to pay for import of capital goods, 5 raw materials, spares and components as well as importing advance technical knowledge. 2) International Relations Almost all countries of the world want to prosper in a peaceful environment. One way to maintain political and cultural ties with other countries is through international trade. 3) Balance of payment Large scale exports solve balance of payments problem and enable countries to have favourable balance of payment position. The deficit in the balance of trade and balance of payments can be removed through large-scale exports. 4) Reputation in the world A country which is foremost in the field of exports, commands a lot of respect, goodwill and reputation from other countries. For example, Japan commands international reputation due to its high quality products in the export markets. 5) Employment Opportunities Export trade calls for more production. More production opens the doors for more employment. Opportunities, not only in export sector but also in allied sector like banking, insurance etc. 6) Promoting economic development Exports are needed for promoting economic and industrial development. The business grows rapidly if it has access to international markets. Large-sole exports bring rapid economic development of a nation. 7) Optimum Utilization of Resources

There can be optimum use of resources. For example, the supply of oil and petroleum products in Gulf countries is in excess of home demand. So the excess production is exported, thereby making optimum use of available resources.

8) Spread Effect Because of the export industry, other sectors also expand such as banking, transport, insurance etc. and at the same time number of ancillary industries comes into existence to suppo0rt the export sector. 9) Higher standard of Living Export trade calls for more productions, which in turn increase employment opportunities. More employment means more purchasing power, as a result of which people can enjoy new and better goods, which in turn improves standard of living of the people

CHAPTER 2 MARKETING STRATEGIES-4 PS

Export Marketing Plan Defined An export marketing plan is a step-by-step guide to strategy implementation. It addresses strategic issues and outlines the corresponding operational actions to be taken. It specifies targets for each step. The plan should answer all questions on how the export firms marketing strategy is to be implemented and direct the enterprise in attaining the strategic objective. A business firms marketing plan and its export marketing strategy are therefore closely inter related. As the various steps in the plan are put into action, interaction between the two should be continuous. The development of an export marketing plan requires decisions on the role that exporting is to play in the firms growth, the scope and nature of the firms product lines and markets abroad, precise export performance goals and the 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 involve all levels of management in this process and to ensure their total commitment for the successful implementation of the export plan. the actions required are sufficient details: It should set out export targets, budgets and activity schedules as well as assign responsibilities for its implementation. 1. Marketing Objectives The first step in developing an export marketing plan is to establish export marketing objectives. These objectives should be attainable, realistic and should be communicated throughout the business firm. Since they will determine the business firms direction and its activities, management will have to devote considerable time and effort to setting them. An analysis of the business firms strengths, weaknesses, opportunities and threats, or a SWOT analysis for short, can provide a guide to management for developing effective and realistic

objectives. A SWOT analysis reveals the competitive advantages of the business firm as well as its prospects for sales and profitability. It is usually based on an evaluation on facts and assumptions about the business firm and on market research. A business firms strengths are its competitive advantages that will give it an edge in export markets. Their weaknesses are its constraints, which may inhibit marketing activities in certain direction. For example, a business firm having shortage of readily available funds cannot undertake a large scale promotional campaign. The assessment of a business firms strengths and weaknesses in relation to the competition is essential for competitive positioning. This assessment from the point of view of the competition should consider: a) Technology in use b) Design styling and trademarks c) Product quality, quality control and products life cycle d) Completeness of the product line e) Customers service f) Raw material supplies g) Distribution structure and cost. The review of opportunities and threats in the market should complement the analysis of the business firms strengths and weaknesses. The aim is to identify the best business opportunities and directions of growth. A business firms opportunities on possible markets can be evaluated in terms of firms customers, competing products, the market structure and competing suppliers. Such an evaluation may reveal complementarities between the business firms strengths and market opportunities. Finally management should examine the so called marketing threats on the market being considered. These should include import rules and regulations relating to tariffs, quotas, non tariff measures and so on. Management should also determine whether the markets under assessments are mature markets, that is, these are already well supplied and do not therefore, provide a readily identifiable niche for the business firms products. 2. Market Segmentation: An export marketing plan is not complete until the business firm has identified its target segment in the export market. Any large market would have different market segments that differ substantially from each other. Different consumer groups exist according to income levels, age,

lifestyle, occupation and education. A crucial element of the export marketing plan is to identify the segment of the customers that the business firm intends to reach. In making this choice, the business firm should answer the following questions: who will buy its products in the export market? Why will they buy these products? Where are these customers located? What are their characteristics? In this exercise it will be helpful to concentrate on within-segment similarities and betweensegment differences. The business firm should choose the segment with the requirements that fit its product specifications best. For example if it produces high-quality premium priced porcelain ware, its target segment is likely to be high-income. Well educated young consumers. A target market segment should be large enough to be profitable. An assessment of the size of the segment should therefore, be made before a final decision is taken to include it in the marketing plan. 3. Market Research: To succeed in export trade, a business firm must identify attractive export markets and estimate the export potential for its products in them as accurately as possible. Market research and forecasting are therefore, of great importance. Factors to be evaluated include the size of the market, the characteristics of demand, consumer requirements, trade channels and the cultural and social differences that may affect the firms way doing business with the market. A small producer contemplating entering export trade may not be willing or able to allocate resources to expensive data collection methods. Firms in that situation can use published data to assess the market. They should, however, first evaluate the data for reliability and accuracy. 4. Product Characteristics The business firm should next consider the products that it has to offer. An analysis should be any modifications required in the products, packaging changes needed labeling requirements, brand name and after sales services expected. Many products must undergo significant modifications if they are to satisfy consumer and market requirements abroad. Other products require changes at the discretion of the producer only to enhance their appeal on export markets. 5. Export Pricing: In setting an export price, the business firm should consider additional costs that do not enter into pricing for the domestic market. These include such items as international freight and insurance charges, product adaptation costs, import duties, commissions for import agents and foreign exchange risk coverage.

Export pricing analysis should begin with these questions: What value does the target market segment place on the business firms product? How do differences in this product add to, or detract from, its market value? In practice, these are difficult questions to research, but analyzing the prices and product characteristic of existing competitive products may reveal critical information. The analysis may so that it is not the cost of materials that determines the products value, but rather the customers perception of that value. 6. Distribution Channels The potential exporter should consider the following distribution option: a. Exporting through a domestic exporting firm that will take over full responsibility for finding sales outlets abroad. b. Setting up its own export organization. c. Selling through representatives abroad. d. Using warehouses abroad. e. Establishing a wholly owned sales subsidiary. The choice of distribution channel will depend on the business firms export strategy and the export market. An export strategy is a blueprint for selling on target markets. If the firm intends to export a product that has a specific feature that should be a good selling point, to a market segment that is already well supplied, it may need to create greater awareness of the product through an appropriate promotional strategy. In this case, it may be better to appoint an agent who does not handle many products and can allocate the time needed to product. Distribution channels should be chosen carefully and efforts should be made to maintain good relation between the parties concerned. 7. Promotion The export marketing plan should provide details on the following aspects of the promotional strategy: Publicity method; advertising (who will be responsible for it, and how much the firm can allocate to it): trade missions: buyers visits; other promotional activities (which methods to use, how much to allocate); and local export assistance. It is important to emphasize that the success of export marketing plan would depend upon adequate customer support and detailed time table for its implementation.

Philips deals in lifestyle, healthcare and lighting divisions. The consumer range of products includes: Television- LCD, plasma, flat screen, smart touch XL Recorders, DVD players, I pods and home theater systems Audio products- audio systems, remote controls, audio/video accessories Digital photo products and frames Portable audio and video systems, accessories like headphones and speakers PC products- Mouse and keyboard, multimedia handsets, external hard disc drives Mobile phones Kitchen appliances- Blenders and hand blenders, juicers and citruspressers, food processors and mixers, coffee makers and kettles, frying and grilling appliances, toasters and snacking products, rice makers Household products- Irons, vacuum cleaners, water purifies PERSONAL CARE PRODUCTS- Male dry shavers, beard trimmers and grooming kit, epilators, beauty and hair care products

Philips lighting: Professional Lighting - Industrial, Shops and offices, Road and Area, Hospitality, Sports Lighting, City Beautification, Schools and Petrol Stations Automotive Lighting - In Cars, Motorcycles and Trucks

Philips healthcare products:

Computerized tomography Diagnostic ECG Operation theatre lights Preclinical imaging Radiation oncology Radiography Fluoroscopy Healthcare informatics Home healthcare Respiratory care Interventional X-ray

The battle of perception Philips has been a household name in India for 75 years, but consumers associated the brand more with tube lights and transistors than cutting-edge technology. That's ironic, considering the company has made its mark globally as a technology leader -- it invented the cassette recorder, the compact disc and the DVD; the last in association with Sony. But a survey by advertising agency JWT, which held the Philips account from 2001 (it has recently moved to Mudra), revealed that Philips technology was seen as reliable but not state-ofthe-art. Clearly, Philips needed an image makeover. It began by taking the technology route. Post-2001, advertising campaigns emphasised the company's technologically-advanced features. Philips was the first audio company to launch an MP3 player (May 2002), and it made sure its communication played that up: "Don't buy a system if it doesn't have an MP3 player." Then there was the October 2002 campaign, in which a little boy uses the power of the music system to nudge the cookie jar off the top-most kitchen shelf. The company was constantly refining the image of the company in the minds of the consumer, making it more modern. But that wasn't enough. That's where in-store displays and promotions that demonstrated the abilities of Philips products came in. In October 2003, JWT broke the "Ramu kaka" ad, where the manservant inadvertently inserts a roti into the DVD player.

The tagline made the message clear: "The new Philips DVD player plays anything". The campaign proved immensely popular - it was used in other Asian countries as well -- and Philips

wasn't slow in leveraging its appeal. At live demos, customers would be invited to slip rotis into the player, creating a buzz around the product and the brand. But that would probably appeal more to families and Philips needed to reach out to the youth, its target customer base. So it went to where the action was -colleges and rock festivals. Philips set up stalls, complete with a professional DJ. Youngsters were invited to man the console, while the DJ gave them tips on mixing and spinning. And had huge walk-ins and could provide an involvement and experience with the brand. Clinch the dealer Philips has successfully played the price card, but not all price cuts have been due to better or cheaper technology. In some segments like radios, it did away with trade discounts and passed on the savings to the customer. Two years ago, Philips' radios sold at Rs 600 -- a huge premium compared to the Rs 200 or so that other brands cost. In mid-2003, the company slashed the price to Rs 400 and even introduced new models at the Rs 160 price point, especially targeting the non-urban youth segment. Not surprisingly, dealers were upset at their shrinking margins. Some started stocking competing brands, only to return, claim company officials, when they found volumes were increasing exponentially. They soon realized it was more profitable to sell Philips radios because the turnover is much higher. To ensure the penetration and distribution happens, Philips changed its distribution strategy around two years ago. Distributors were now allocated smaller geographical territories so they can concentrate on getting firmer footholds in their areas. Distributor in upcountry markets, who were earlier allotted five or six districts are now given only two or three. And not all are given the entire product range so that the focus is sharper. Creating the value proposition Philips realized early on that maintaining the price-quality equation is critical. That's especially true of the minis (DVD and VCD hi-fi systems) segment, which accounts for a quarter of the audio market in value terms. Even as Philips constantly raised the technology bar (MP3 players, deeper bass, sleeker, more streamlined systems), it's kept its prices competitive. The company prices its minis at Rs 8,00025,000, compared with the market range of Rs 7,500-30,000.

Moreover, prices have been falling by 10 per cent on average every year. Of course, that's true for other brands as well but, Philips "found the sweet spot at which youngsters could buy". How did it do that? By ensuring that it was perceived neither as a price warrior like Aiwa or Sansui nor prohibitively expensive -- Sony products are on average 10 per cent more expensive. Philips also brought in help from outside. In late 2002, it tied up with Countrywide and Citibank to provide accessible finance schemes for its products. Compared to equal monthly installments of about Rs 1,000 earlier, the new schemes let customers pick up state-of-the-art sound machines for as little as Rs 333 a month - that too, without a down-payment. Has that helped? Consider: Philips entered the minis segment only in 2000, a year behind Sony. But it's now carved up the market with Sony, with 45 per cent share each. The company also paid close attention to customer feedback. It has ramped up the number of service centres across the country to 190, from 125 two years ago. Today, over 900 technicians now attend to complaints, up from 600 in 2002. Main inventions Compact Cassette

In 1962 Philips invented the compact audio cassette medium for audio storage. Although there were other magnetic tape cartridge systems, the Compact Cassette became dominant as a result of Philips's decision to license the format free of charge. Laserdisc

Laserdisc was a 30 cm disc designed with MCA meant to compete with VHS and even replace it. It was not as generally popular as VHS, because of the initial investment costs of players, somewhat higher costs of movie titles, and the read-only format. But like Betamax, it enjoyed extensive success among serious video collectors. The technologies created for Laserdisc would later be used again for the Compact Disc. Compact Disc

Although Philips' and MCA's Laserdisc project never reached the VHS mass market level, Philips still thought the format should be able to succeed, and (with Sony's help), in 1982 they launched the smaller CD.

DVD

The DVD, the eventual successor of the CD, met a long road of setbacks. Philips wanted to continue with the CD in a new format called MultiMedia Compact Disc (MMCD), while another group (led by Toshiba) was developing a competing format, then named Super Density (SD) disc. Their representatives approached IBM for advice on the file system. IBM also learned of Philips' and Sony's initiative. IBM convinced a group of computer industry experts to form a working group. The Technical Working Group (TWG) voted to boycott both formats unless they merged to prevent another format war (like the videotape format war). The result was the DVD specification, finalized in 1995. The DVD video format was first introduced in Japan in 1996, later in 1997 in the U.S. as limited test run, then across Europe and the other continents from late 1998 onwards. Blu-Ray

Blu-Ray, yet again primarily developed by Philips and Sony, utilizes blue-violet colored diodes to create an even shorter wavelength beam than CD or DVD. Because of this, the capacity is much more than that of CD or DVD, being 25 GB single-layered or 50 GB dual-layered.

CHAPTER V

INTRODUCTION TO THE PROJECT

OBJEC TIVES OF THE PROJECT ASSIGNED-

1. To understand the level of awareness of the Philips personal care products. 2. To estimate the potential market size for the personal care products. 3. To understand the customer preferences for the personal care products. 4. To identify the places for selling the personal care product JOB ASSIGNED-

To make a survey in Delhi University in order to understand the customer insight about the Philips personal care products. Delhi University was chosen because the company wants to target the youth as they are going to be the potential buyers of these products. Customer insight would include their level of awareness; their preference of places where they want to buy these products; preferred features and price ranges for hair care, shavers and epilators.

STAGES OF THE PROJECT To understand the objectives of the project assigned

To study secondary data from different sources

To prepare a structured questionnaire for primary data

To get the questionnaires filled by the potential customers

To analyze the collected primary data

To interpret the primary as well as secondary data

To arrive at a conclusion

PowerPoint presentation

Report preparation

DETAILS OF THE WORK DONE

Understanding and jotting down the main objectives after being briefed by the mentor. A study has been done about the company, the electronic personal care industry, and about the demand and customer requirements. A structured closed ended questionnaire was prepared and got it approved by the industry mentor. Went to Delhi University to get the questionnaires filled by the students, who are ought to be the potential customers. After all the questionnaires were filled, the data to be analyzed was put up on excel sheet. Pie charts were made. Conclusion was driven out of the analyzed data. PowerPoint presentation was prepared and presented in front of the company executives. Report was prepared and submitted. This project aims at identifying various problems faced by the company in Indore Market and the consumer preference with reference to Electronics, Electricals and Personal Care Products. Through this project I have found out that Philips faces intense competition from the local rivals and the major market share belongs to the low-cost companies. Also, Philips as a whole needs to reposition itself and its products especially to get over of the image created in the minds of the gentry that Philips deals best in lightening products.

A primary data from Delhi University shows that there is high level of awareness about these products among the youth, and majority wants to possess one or other of these products nowadays. Though preferred price range is the lowest range as the surveyed people are non earning students. The survey also brought out the places where people would like to buy them.

Secondary data shows that personal care industry is growing in India and all over the world day by day. And there are many companies coming up with these kind of electronic personal care products. Companies like Panasonic and Procter & Gamble are giving strong competition to Philips.

This project aims to find out the market share of their 5 products such as CFL, TUBELIGHT, CHOKE, BULB, & ELECTRONIC FITTINGS and to identifying various problems faced by the company in the Market of Lucknow City and the

consumer preference with reference to Electronic products. Through this project I have found that Philips faces intense competition from the local rivals such as Arya and the major market share belongs to the PHILIPS company i.e. 38% overall. Philips as a market leader with having larger chunk of the market needs to re-position its strategy for its products especially to get over of the image created in the minds of the gentry that Philips deals best in electric products. .

. It explains how actually the marketing mix and SWOT analysis help the HUL and RB Company to improve its quality and helps in survival of the business. SWOT analysis helps the company to know about the opportunities and threats. The company can grab the opportunities to improve its quality work and achieve its objectives. It can take precautionary steps to face the threats faced.

Lighting Philips Lighting is the leading provider of lighting solutions and applications both for professional and consumer markets, transforming how lighting is used to enhance the human experience in the places where people live and work. Whether at home, on the road, in the city, shopping, at work or at school, we are creating lighting solutions that transform environments, create experiences, and help shape identities. We serve our customers through a market segment approach which encompasses Homes, Office and Outdoor, Industry, Retail, Hospitality, Entertainment, Healthcare and Automotive. For these segments we provide a wide range of offerings from across the entire lighting value chain - from light sources, luminaires and lighting controls to lighting solutions and services. Philips Lighting employs approximately 53,000 people worldwide.

Lighting Business Highlights Philips Lighting site

Consumer

Lifestyle

Guided by the brand promise of sense and simplicity and the consumer insights, Philips Consumer Lifestyle offers rich, new consumer experiences that meet consumers desire for relaxation and improving their state of mind. Philips also responds to the consumer's desire for wellness and pleasure by introducing products that meet the individuals interests in terms of their body and appearance. Philips Consumer Lifestyle employs approximately 17,700 people worldwide.

Consumer Lifestyle Business Highlights Philips Consumer Lifestyle site

Innovation

50,000 registered patents illustrate the innovative nature of the company. Philips currently holds around 36,000 registered trademarks, 63,000 design rights and 3,900 domain names.

Philips has adopted an Open Innovation strategy which leverages the joint innovative power of partnering companies and researchers to bring more innovations to the market effectively and faster.

In 2010, Philips invested EUR 1.58 billion in Research and Development.

Philips is internationally recognized as a global leader in design, receiving a variety of international awards each year. For example:

2010 iF product design competition: 28 design awards

Visit Philips Research Visit Philips IP&S Visit Philips Innovation Services Visit Philips Design

Sustainability Sustainability is at the center of Philips strategy. Philips is committed to reducing its environmental footprint in all aspects of its business: in its products, manufacturing, and procurement, as well as in the communities where the company acts and in the working practices of its employees.

All Philips products go through an EcoDesign process, identifying environmental impact in terms of energy efficiency, hazardous substances, take-back and recycling, weight and lifetime reliability. Philips processes on Green Product sales are verified annually by an independent third party and published in the Annual Report.

Philips aims to combat global healthcare challenges by focusing on delivering better quality healthcare at lower costs, also in the emerging markets, such as China and India.

Philips also takes a leading position in educational programs, showing its stakeholders that energy efficient solutions are simple, easy and actionable and make economic sense for national and local governments, businesses, schools and individuals.