4/3/2021

Planning and Preparations

for Export
Dr Tran Thi Anh Tam
School of International Business & Marketing-UEH

 Assessing and Selecting the Product

 International Market Research
 International Market Assessment
 Developing an International Business Plan
 Export Counselling and Assistance
 Overseas Travel and Promotion

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Establishing Export Potential

for Product or Service

Success in domestic markets

Participation in overseas trade shows

Advertising and market data

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 Experience
 With what countries is trade being conducted?
 Which product lines are most in demand, and who are
the buyers or likely buyers?
 What is the trend in sales?
 Who are the main domestic and international
competitors?
 What lessons have been learned from past experience?
 Management and Personnel
 Who will be responsible for the export department’s
organization and staff?
 How much management time should or could be
allocated?
 What organizational structure is suitable?

 Production Capacity
 What is the firm’s production capacity?
 What is the effect of exports on domestic sales and
production capacity and cost?
 Is a minimum order quantity required?
 What are the design and packaging requirements for
exports?
 Financial Capacity
 What amount of capital is tied up in exports?
 What level of export department operating costs can be
supported?
 What are the initial expenses of export efforts to be
allocated?
 When should the export effort pay for itself?

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Approaches to Selecting
a Product for Export
Systematic: Based on demand and
growth trends, statistical sources,
familiarity, proximity to producer, etc.

Reactive: Based on immediate market

need, publications, proximity, etc.

 Shifting Spending patterns: Emphasis on

products/services that consumers regard as
“luxuries” due to spending in response to rising
incomes.
 Products to be excluded from the list: Products that
compete against large firms; fashion oriented market
(too volatile); multimillion dollar overseas projects
that require development of training facilities.
 Emphasis on quality and niche marketing

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Parts and Compornents 45361701

Electrical machinery 15129193
General machinery 19728732
VN export to the world (USD) 1995 Household electric appliances 3144480
Capital goods 48,833,767 Iron and steel , Nonferrous metals 842818
Consumption goods 3,047,822,071 Precision machinery 505847
Pulp,Paper and Wood 4095693
Parts and Compornents 45,361,701
Textile 49293
Primary goods 2,171,013,989 Toys and Miscellaneous goods 43689
Processed goods 401,751,079 Transportation Equipment 1821956
Grand Total 5,714,782,607 Primary goods 2,171,013,989
Capital goods 48833767 Chemicals 281976
Electrical machinery 12741173 Foods 728996354
General machinery 14043399 Iron and steel , Nonferrous metals 15619041
Household electric appliances 766098
Oil and Coal 1,141,714,383
Iron and steel , Nonferrous metals 2769082
Precision machinery 4090588 Pulp,Paper and Wood 268209585
Toys and Miscellaneous goods 5580173 Stone, clay, glass and concrete products 11493585
Transportation Equipment 8843254 Textile 4699065
Consumption goods 3047822071 Processed goods 401751079
Chemicals 10541791
Chemicals 42660508
Foods 1,141,911,069
General machinery 653246 Electrical machinery 298909
Household electric appliances 5317018 Foods 12395493
Iron and steel , Nonferrous metals 5236838
Precision machinery 1126064 General machinery 83928
Pulp,Paper and Wood 578,584,435 Household electric appliances 775495
Stone, clay, glass and concrete products 38388355
Iron and steel , Nonferrous metals 37587357
Textile 933,579,328
Toys and Miscellaneous goods 323488305 Oil and Coal 11301377
Transportation Equipment 8995622 Precision machinery 227419
Pulp,Paper and Wood 162044297
Stone, clay, glass and concrete products 36196141
Textile 70911947
Toys and Miscellaneous goods 27268208

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Parts and Compornents 630436012

VN Export to the World (USD) 2000 Electrical machinery 504259798
Capital goods 299,847,079 General machinery 84257342
Consumption goods 7,621,482,392 Household electric appliances 4597115
Parts and Compornents 630,436,012 Iron and steel , Nonferrous metals 6289156
Primary goods 4,660,579,411 Precision machinery 1311618
Pulp,Paper and Wood 19222093
Processed goods 902,620,535
Textile 53075
Grand Total 14,114,965,429 Toys and Miscellaneous goods 149673
Transportation Equipment 10296142

Primary goods 4660579411

Capital goods 299847079
Chemicals 171446
Electrical machinery 167382219
Foods 644151374
General machinery 73509246
Iron and steel , Nonferrous metals 33676840
Household electric appliances 332760
Oil and Coal 3650428080
Iron and steel , Nonferrous metals 5655475
Pulp,Paper and Wood 297255764
Precision machinery 20543344
Stone, clay, glass and concrete products 30178277
Toys and Miscellaneous goods 31313053
Textile 4717630
Transportation Equipment 1110982
Consumption goods 7621482392 Processed goods 902620535
Chemicals 54842322 Chemicals 164421477
Foods 2153653968 Electrical machinery 21945851
General machinery 348133 Foods 26952937
Household electric appliances 38487345 General machinery 670275
Iron and steel , Nonferrous metals 25704691 Household electric appliances 9202333
Precision machinery 12118320 Iron and steel , Nonferrous metals 91079575
Pulp,Paper and Wood 2443304500 Oil and Coal 93251430
Stone, clay, glass and concrete products 138843587 Precision machinery 10492929
Textile 1811599813 Pulp,Paper and Wood 103455571
Toys and Miscellaneous goods 895428519 Stone, clay, glass and concrete products 114965688
Transportation Equipment 47151194 Textile 207098596
Toys and Miscellaneous goods 59083873

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Viet Nam export to the World (USD) 2018

Capital goods 64,177,417,287
Consumption goods 97,597,607,442
Parts and Compornents 36,970,671,591
Primary goods 10,558,016,274
Processed goods 33,674,589,258
Grand Total 242,978,301,852
Parts and Compornents 36970671591
Capital goods 64177417287 Electrical machinery 26990824358
Electrical machinery 50657213578 General machinery 5581841583
General machinery 5984593090 Household electric appliances 240764436
Household electric appliances 2354729828 Iron and steel , Nonferrous metals 138122309
Iron and steel , Nonferrous metals 173463136 Precision machinery 494709467
Precision machinery 3970914951 Pulp,Paper and Wood 1161156656
Toys and Miscellaneous goods 600145535 Textile 12672567
Transportation Equipment 436357169 Toys and Miscellaneous goods 2205600
Transportation Equipment 2348374615
Consumption goods 97,597,607,442 Processed goods 33674589258
Chemicals 1,769,669,497 Chemicals 7066068710
Foods 18,109,932,832 Electrical machinery 467260754
General machinery 498,500,883 Foods 670978934
Household electric appliances 2,456,504,039 General machinery 7535981
Iron and steel , Nonferrous metals 745,205,355 Household electric appliances 507131169
Precision machinery 22,208,338 Iron and steel , Nonferrous metals 9849540403
Pulp,Paper and Wood 25,290,659,594 Oil and Coal 414394064
Stone, clay, glass and concrete products 185,268,819 Precision machinery 712879432
Textile 32,487,299,737 Pulp,Paper and Wood 2907596020
Toys and Miscellaneous goods 15,346,834,500 Stone, clay, glass and concrete products 3067131875
Transportation Equipment 685,523,848 Textile 6699344976
Toys and Miscellaneous goods 1304726940

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 Homework 1: Checking the given data on the

export pattern of Vietnam to the World,
comment the changing patterns

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Conducting International
Market Research
❖ Primary research
- Provides specific information.
- Conducted by collecting data directly
from the foreign marketplace through
interviews, focus groups, observation,
surveys, and experimentation with
representatives and/or potential buyers.
- Can be expensive and time consuming.
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 Based on data previously collected and

assembled for a certain project other than the
one at hand.
 Such information can often be found inside
the company or in the library,
 or it can be purchased from public or private
organizations that specialize in providing
information, such as overseas market studies
or market surveys.

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International Market Assessment

Basic Needs Financial Socio-cultural
Political screen Competitiveness Fieldtrip
Screen condition screen screen

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International Market Assessment

❖Preliminary screening (basic needs):
Environmental conditions such as climate,
topography, or natural resources.
❖Secondary screening (financial and
economic condition): Trends in inflation,
interest rates, exchange rate stability and
availability of credit and financing.

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❖Third screening (political and legal): Entry

barriers, limits on profit remittances, taxes and price controls
as well as protection of intellectual property rights.

❖Fourth screening (sociocultural): Customs,

religion and values that may have an adverse effect on the
purchase or consumption of certain products

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❖Fifth screening (competitive):level and quality

of competition in potential markets.

❖Final selection (field trip): Trade missions or

trade fairs in order to corroborate gathered facts and
supplement currently available information.

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Structure of an International
Business Plan Executive Summary

❖ Executive summary: company

General Description of
background, market potential, product/ Industry and Company
❖
service, sales, profit projections Target Market

❖ General description of industry and

company: General company description, Marketing Plan and
Sales Strategy

current status, prospect for industry,

Management and
description of product/ service Organization

❖ Target market: Market description, market

Long-Term
Development Plan
size, market share, trends, competition
❖ Financial Plan

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Structure of an International
Business Plan Executive Summary

❖ Marketing and sales strategy: Marketing General Description of

strategy, sales tactics and distribution, Industry and Company
❖
advertising and promotion Target Market

❖ Management and organization:

compensation and ownership, organization Marketing Plan and
Sales Strategy

and key management

Management and
❖ Long-term development plan: Basic Organization

strategy, potential risks Long-Term

Development Plan
❖ Financial plan: Cash-flow projections for
three years, pro forma income statement, Financial Plan

balance sheet

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Sources of Export Counseling

And Assistance
❖ US Public sources: ❖ VN Public sources:
- The U.S. Department of - Ministry of Industry and
Commerce Trade of Vietnam
- Small Business - Vietnam Chamber of
Administration (SBA) Commerce and Industry
- U.S. Department of - State, government, and city
Agriculture agencies
- State, government, and city
agencies

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Sources of Export Counseling

and Assistance (cont.)
❖ Private sources:
- Commercial banks
- Trading companies
- World trade clubs
- Chambers of commerce and trade
associations
- Consultants

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Overseas Travel and Promotion

Planning and Preparing for the Trip:
❖ Make prior arrangements
❖ Acquire basic knowledge of host country
❖ Obtain the ATA carnet: For exporters that take
product samples for a temporary period, the
ATA carnet helps avoid duties and burdensome
customs formalities.
❖ Business negotiations
❖ Documentation

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Promotional Tools
❖Advertising

❖Personal selling

❖Sales promotion

❖Publicity

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 Failing to obtain qualifies export counseling and

to develop a master international marketing
plan before starting an export business
 Obtaining insufficient commitment by top
management to overcome the initial difficulties
and financial requirements of exporting
 Using insufficient care in selecting overseas
distributors
 Chasing orders from around the world instead
of establishing a basis for profitable operations
and orderly growth

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 Neglecting export business when the domestic

market booms
 Failing to treat international distributors on an
equal basis with domestic counterparts
 Assuming that a given market technique and
product will automatically be successful in all
countries
 Being unwilling to modify products to meet
regulations or cultural preferences of other
countries
 Failing to print service, sale, and warranty
messages in locally understood languages
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 Failing to consider use of an export

management company
 Failing to consider licensing or joint
venture agreements
 Failing to provide readily available
servicing for the product

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Exporter contacts
manufacturers to
The exporter a) establish Exporter checks
Exporter responds Exporter send Exporter is Customer opens a
Buyer responds to checks 1)whether product available L/C, ship the
to buyer’s sample product requested to send confirmed
the exporter’s the product can be for export, b) goods, submit
advertisement for and price a pro forma irrevocable letter
letter or fax legally imported 2) obtain and documents to the
a product quotation invoice of credit
any requirements compare price bank
lists, catalogs and
samples

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 Step 1-- The exporter establishes initial

contact by responding to an overseas
buyer’s advertisement (ad ) for a product that
she/he can supply. Such ads are available in
various trade publications.
 Step 2 -- The prospective buyer responds to
the exporter’s letter or fax by specifying
the type and quantity of product needed,
with a sample where appropriate. The
potential importer also sends his/her trade
references.

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 Step 3 -- The exporter checks with the consulate

of the importer’s country to determine a )whether
the product can be legally imported and any
restrictions that may apply, and b) any requirements
that need to be met .

 Step 4 -- The exporter ( if an agent ) contacts

manufacturers of the product to a) establish if the
given product is available for export to the
country in question, b) obtain and compare price
lists, catalogs and samples.

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 Step 5 -- The exporter selects the product from

responses submitted by manufacturers based on
quality, cost and delivery time. The sample
selected is sent by airmail to the overseas
customer to determine if the product is acceptable
to the latter. In the meantime, the exporter
prepares and sends a price quotation suggesting
the mode of transportation and letter of credit
terms. The price quotation should include
commission and markup.

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 Step 6 -- The exporter obtains a positive response

from the overseas customer, and is requested to
send a pro forma invoice to enable the latter to
obtain an import and foreign exchange permit.
The exporter sends the pro forma invoice.
 Step 7 -- The overseas customer receives the pro
forma invoice, opens a confirmed irrevocable letter
of credit for the benefit of the exporter, and
sends an order to the latter to ship the
merchandise.

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 Step 8 -- The exporter verifies with its bank

about the validity of the letter of credit and finds
that it meets the agreed conditions in the export
contract and that it will be honored by the bank
if the exporter meets the terms. The exporter
ships the merchandise, and submits the required
documents (such as bill of lading, commercial
invoice, consular invoice, certificate of origin,
packing list etc.) to the bank with a request for
payment. The exporter is paid, the merchandise is
on transit, and the transaction is completed.

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1. Discuss the two major approaches to

selecting a product for exports. Why is it
important to participate in overseas trade
shows?
2. What are the advantages of the reactive
approach to selecting a product for exports?
3. Explain the importance of the following
factors in the selection of products for
exports: shifting spending patterns, quality,
nice marketing

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 Make a group of 5, you will closely work

together during the course, prepare the
following information:
 Company Name
 Specific Address
 Contact
 Merchandise you would like to sell/ buy
 Quantity
 Where is destination, deliver point?
 Date of shipment/ delivery

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