EXPORT AND INTERNATIONAL MARKETING FROM INDIA

INTERNATIONAL MARKETING

International marketing can be defined as the application of marketing strategies, planning and activities to foreign markets.

Factors influencing International marketing

• CULTURE

• Political and legal factors

• Level of economic development

•Mode of involvement in foreign markets

Mode of engagement in foreign markets

Direct exporting Indirect exportingLicensingFranchising Joint ventureWholly owned subsidiariesMergers and acquisitions

Direct exporting

An export entry mode whereby a firm handles its own exports, usually with the help of an in-house exporting department.

Indirect exporting

An export entry mode whereby a company sells its product in the companies home country to intermediaries who, in turn , sells the product overseas.

Licensing

An international entry mode that involves a licensor, who shares the brand name, technology, and know-how with a licensee in return for royalties.

Franchising The franchisor gives the franchisee

the right to use its brand name and all related trade marks in return for royalties.

Joint venture

A corporate entity created with the participation of two or more companies that share equity, capital and labor among others.

It is usually short lived collaboration.

Wholly owned subsidiary The entry mode that affords the highest

level of control and present the highest level of risk to a company.

Merger

Tow companies come together to form a single company. They combine there respective resources.

Acquisition

When one company is buying and taking over another.

The company taking over gets to make all the financial decisions.

India’s Exports as Percentage of GDP

Year Percentage

1990-91 5.8

1999-00 8.3

2000-01 9.9

2001-02 9.4

2002-03 10.6

2003-04 11.0

2004-05 11.8

2005-06 12.4

Export Items of India

Indian exports have grown at a rate of nearly 22%.

Some of India's main export items are cotton, textiles, jute goods, tea, coffee products, rice, wheat, pickles, mango pulp, juices, jams, preserved vegetables etc.

Top Five Export Products

Products Export (Value in US$ mn) 2004-2005

Export (Value in US$ mn) 2005-2006

Gems & Jewelry 13761.77 15546.57

Petroleum: Crude & Products

6989.34 11514.57

Cotton include Accessories

5043.92 6347.92

Drugs, Pharmaceuticals & Fine Chemicals

3974.45 4874.01

Machineries & Instruments

3719.35 4795.98

Export Destination

Main top five destinations for its export as per growth rate is UK, Singapore, USA, UAE and China.

These countries cover almost 43% of Indian export.

The growth rate of Indian export towards these countries is also higher then other countries. USA, UAE and China are our biggest overseas customers.

Top Five Destination of Exports

Countries April-March2004-05

(Values in US$ mn)

April-March2005-06

(Values in US$ mn)

Growth %

UK 3681.09 5146.00 39.80

Singapore 4000.61 5569.83 39.22

USA 13765.75 17203.54 24.97

China 5615.88 6727.15 19.68

UAE 7347.88 8592.79 16.94

Mergers and Acquisitions in India

Acquisition of foreign companies by the Indian businesses has been the latest trend in the Indian corporate sector.

Favorable government policies, buoyancy in economy, additional liquidity in the corporate sector, and dynamic attitudes of the Indian entrepreneurs are the key factors behind the changing trends of mergers and acquisitions in India.

Hindalco acquired Canada based Novelis. The deal involved transaction of $5,982 million.

Tata Steel acquired Corus Group plc. The acquisition deal amounted to $12,000 million.

Dr. Reddy's Labs acquired Betapharm through a deal worth of $597 million.

Ranbaxy Labs acquired Terapia SA. The deal amounted to $324 million.

Suzlon Energy acquired Hansen Group through a deal of $565 million.

The acquisition of Daewoo Electronics Corp. by Videocon involved transaction of $729 million.

HPCL acquired Kenya Petroleum Refinery Ltd.. The deal amounted to $500 million.

Mahindra and Mahindra acquired 90% stake in the German company Schoneweiss