MBA NOTES

FINANCIAL MERCHANDISING MANAGEMENT

2011-10-18T13:10:00.000+05:30

1. To describe the major aspects of financial merchandise planning and management

The purpose of financial merchandise management is to stipulate which products are bought by the retailer, when, and in what quantity. Dollar control monitors inventory investment, while unit control relates to the amount of merchandise handled. Financial merchandise management encompasses accounting methods, merchandise forecasts and budgets, unit control, and integrated dollar and unit controls.

2. To explain the cost and retail methods of accounting

Two accounting techniques for retailers are the cost and retail methods of inventory valuation. Physical and book (perpetual) procedures are possible with each. Physical inventory valuation requires counting merchandise at prescribed times. Book inventory valuation relies on accurate bookkeeping and a smooth flow of data.

The cost method obligates a retailer to have careful records for each item bought or code costs on packages. This must be done to find the exact value of ending inventory at cost. Many firms use LIFO accounting to project that value, which lets them reduce taxes by having a low ending inventory value. In the retail method, closing inventory value is tied to the average relationship between the cost and retail value of merchandise. This more accurately reflects market conditions, but is more complex.

3. To study the merchandise forecasting and budgeting process

This is a form of dollar control with six stages: designating control units, sales forecasting, inventory-level planning, reduction planning, planning purchases, and planning profit margins. Adjustments require all later stages to be modified.

Control units -- merchandise categories for which data are gathered -- must be narrow enough to isolate problems and opportunities with specific product lines. Sales forecasting may be the key stage in the merchandising and budgeting process. Through inventory-level planning, a firm sets merchandise quantities for specified periods through the basic stock, percentage variation, weeks’ supply, and stock-to-sales methods. Reduction planning estimates expected markdowns, discounts, and stock shortages. Planned purchases are linked to planned sales, reductions, ending inventory, and beginning inventory. Profit margins are related to a retailer’s planned net sales, operating expenses, profit, and reductions.

4. To examine alternative methods of inventory unit control

A unit control system involves physical units of merchandise. It monitors best-sellers and poor sellers, the quantity of goods on hand, inventory age, reorder time, and so on. A physical inventory unit control system may use visual inspection or a stock counting procedure. A perpetual inventory unit control system keeps a running total of the units handled through recordkeeping entries that adjust for sales, returns, transfers, and so on. A perpetual system can be applied manually, by merchandise tags processed by computers, or by point-of-sale devices. Virtually all larger retailers conduct regular physical inventories, two-thirds use a perpetual inventory system.

5. To integrate dollar and unit merchandising control concepts

Three aspects of financial inventory control integrate dollar and unit control concepts: stock turnover and gross margin return on investment, when to reorder, and how much to reorder. Stock turnover is the number of times during a period that the average inventory on hand is sold. Gross margin return on investment shows the relationship between the gross margin in dollars (total dollar operating profits) and average inventory investment (at cost). A reorder point calculation – when to reorder – includes the retailer’s usage rate, order lead time, and safety stock. The economic order quantity – how much to reorder – aids a retailer in choosing how big an order to place, based on both ordering and inventory costs.

RETAIL BRANDING

2011-06-20T11:48:00.003+05:30

Def : Brand is the product’s essence, its meaning and its direction. It defines its identity in time and space.

Successful Retail Branding starts with:

1. A clear definition of what the retailer stands for
2. An identification of what the customers associate it with
3. When customers think the brand is a reflection of them
4. When the retailer is in the minds of the customer when he think of brand.

Brand

True branding effort

1. Communication that inspires emotional reaction
2. Customer Service
3. How salespersons greet customers
4. How fast product is shipped and delivered
5. Involves every single contact occurring between any product and a human

Role of Brand
1. Successful Retail Branding ensures Stable long term demands
2. Better margins
3. Differentiation by way of creating long term association
4. Adds value to the product
5. Trust of fulfillment of service expectations
6. Protection from growing competition
7. Image as a company attractive enough to work for
8. Negotiation with suppliers from a position of improved strength

Brand Loyalty

Brand or store loyalty will ensure

· Positive disposal to the brand based on brand loyalty
· Brand preference : Frequent utilization of the store over other stores
· Brand allegiance: Continuous utilization of the store overtime

Brand loyalty may be expressed for one or more brands

1. Hard core loyalty : Buying one brand all the time
2. Soft core loyalty : Buying a combination of two competing brands
3. Shifting loyalty : Buying preference shifting from one brand to another
4. Switchers: No loyalty to any one brand based on the deal given.

Positioning of brands Determined on the basis of

· Product usage

· Price

For successful brand positioning Brand Managers should

· Regularly assess the customer’s opinions
· Clearly identify the target
· Plan the brand
· Differentiate the brand from others in the sub group

Differentiate the brand from others in the sub group

Personality of the brand

· It is created by way of adding psychological values through
· Packaging
· Advertising
Other aspects of the marketing mix

Importance

· Encourages customers to build a relationship with a brand
· Gives strength to the brand
· Ensures the staying power of the brand

Concept has two non-functional aspects of brands

1. Brand image
2. Brand identity

Brand image

· Customers regard brands possess human-like characteristics
· Customers experience brands as bundles of association
· Customers see, hear, smell, taste and get gut feelings about different brands
· This profile or essence is called brand image

Retail Promotional Strategy

2011-06-20T11:48:00.000+05:30

Retail Promotional Strategy

• Any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm

Elements of the Promotional Mix

Advertising Sales promotion Store atmosphere Web site SEM	Personal selling E-mail marketing
Publicity SEM	Word of mouth

Planning a Retail Promotional Strategy

Promotional Objectives

• Increase sales

• Stimulate impulse and reminder buying

• Raise customer traffic

• Get leads for sales personnel

• Present and reinforce the retailer image

• Inform customers about goods and services

• Popularize new stores and Web sites

• Capitalize on manufacturer support

• Enhance customer relations

• Maintain customer loyalty

• Have consumers pass along positive information to friends and others

Public Relations

• Public Relations - Any communication that fosters a favorable image for the retailer among its publics

– Nonpersonal or personal

– Paid or nonpaid

– Sponsor-controlled or not

– Publicity – Any nonpersonal form of public relations whereby messages are transmitted through mass media, the time or space provided by the media is not paid for, and there is no identified commercial sponsor

Advantages

• Image can be presented or enhanced

• More credible source

• No costs for message’s time or space

• Mass audience addressed

• Carryover effects possible

• People pay more attention than to clearly identified ads

Disadvantages

• Some retailers do not believe in spending on image-related communication

• Little control over publicity message

• More suitable for short run

• Costs for PR staff, planning activities, and events

Advertising

• Paid, nonpersonal communication transmitted through out-of-store mass media by an identified sponsor

• Key aspects

– Paid form

– Nonpersonal presentation

– Out-of-store mass media

– Identified sponsor

Advantages

• Attracts a large audience

• Gains pass along readership (for print)

• Low cost per contact

• Many alternatives available

• Control over message content; message can be standardized

• Message study possible

• Editorial content surrounds ad

• Self-service operations possible

Disadvantages

• Standardized messages lack flexibility

• Some media require large investments

• Geographic flexibility limited

• Some media require long lead time

• Some media have high throwaway rate

• Some media limit the ability to provide detailed information

Personal Selling

Oral communication with one or more prospective customers for the purpose of making a sale

Advantages

• Message can be adapted

• Many ways to meet customer needs

• High attention span

• Less waste

• Better response

• Immediate feedback

Disadvantages

• Limited number of customers handled at one time

• High costs

• Doesn’t get customer in store

• Self-service discouraged

• Negative attitudes toward salespeople (aggressive, unhelpful)

Sales Promotion

Encompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness

Advantages

• Eye-catching appeal

• Distinctive themes and tools

• Additional value for customer

• Draws customer traffic

• Maintains customer loyalty

• Increases impulse purchases

Fun for customers

Disadvantages

• Difficult to terminate

• Possible damage to retailer’s image

• More stress on frivolous selling points

• Short-term effects only

• Used as a supplement

EMERGING TRENDS IN INDIAN ORGANIZED RETAIL SECTOR

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The emerging trends in the Indian organized retail sector would help the economic growth in India.

There is a fantastic rise in the Indian organized retail sector in a very short period of time between 2001 and 2006. Eventually, out of the shadows of the unorganized retail sector, India has a chance of tremendous economic growth, both in India and abroad.

The emerging trends in the Indian organized retail sector are also adding up to the development of the Indian organized retail sector. The relaxation by the government on regulatory controls on foreign direct investments has added to the process of the growth of the Indian organized retail sector.

The infrastructure of the retail sector will evolve radically in the recent future. The emergence of shopping

The trends to follow in the future:

The Indian Organized retail sector will grow up to 10% of total retailing by 2010.

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Retail Inventory Management

2011-06-20T11:47:00.000+05:30

The retail industry can be extremely competitive and one of the biggest challenges is managing a store’s retail inventory. Businesses need to have space to store a wide number of products along with a wide variety. If a retail store does not carry enough of a product, then they are losing potential customers who will shop elsewhere.

Retail inventory is different from other forms of inventory because of the quantities needed. Retail chains need warehouses to keep all of their stock and the means to transport it to their stores. Keeping up with such large quantities can be difficult for anyone, even with the help of an automated system. To track a company’s products, a retail inventory management system needs to be successfully implemented.

What Is Retail Inventory Management?

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Industrial Relations

2011-06-20T11:46:00.002+05:30

Industrial relation means the relationship between employers and employees in course of employment in industrial organisations. However, the concept of Industrial Relations has a broader meaning. In a broad sense, the term Industrial Relations includes the relationship between the various unions, between the state and the unions as well as those between the various employers and the government. Relations of all those associated in an industry may be called Industrial Relations.

According to International Labour Organisation, Industrial relations comprise relationships between the state on one hand and the employer’s and employee’s organisation on the other, and the relationship among the occupational organisations themselves.

Definition: According to J.T. Dunlop, “Industrial relations are the complex interrelations among managers, workers and agencies of the government”

Features of Industrial Relations:

Industrial relations are outcomes of employment relationships in an industrial enterprise. These relations cannot exist without the two parties namely employers and employees.

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Industrial Disputes

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Industrial disputes are organised protests against existing terms of employment or conditions of work. According to the Industrial Dispute Act, 1947, an Industrial dispute means

“Any dispute or difference between employer and employer or between employer and workmen or between workmen and workmen, which is connected with the employment or non-employment or terms of employment or with the conditions of labour of any person”

In practice, Industrial dispute mainly refers to the strife between employers and their employees. An Industrial dispute is not a personal dispute of any one person. It generally affects a large number of workers’ community having common interests.

Prevention of Industrial Disputes:

The consequences of an Industrial dispute will be harmful to the owners of industries, workers, economy and the nation as a whole, which results in loss of productivity, profits, market share and even closure of the plant. Hence, Industrial disputes need to be averted by all means.

Prevention of Industrial disputes is a pro-active approach in which an organisation undertakes various actions through which the occurrence of Industrial disputes is prevented. Like the old saying goes, “prevention is better then cure”.

1. Model Standing Orders: Standing orders define and regulate terms and conditions of employment and bring about uniformity in them. They also specify the duties and responsibilities of both employers and employees thereby regulating standards of their behaviour.

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Collective Bargaining

2011-06-20T11:45:00.000+05:30

Good relations between the employer and employees are essential for the success of industry. In order to maintain good relations, it is necessary that industrial disputes are settled quickly and amicably. One of the efficient methods of resolving industrial disputes and deciding the employment conditions is Collective Bargaining. Industrial disputes essentially refer to differences or conflicts between employers and employees.

Collective Bargaining is a process in which the management and employee representatives meet and negotiate the terms and conditions of employment for mutual benefit.

According to Walton and McKersie the process of Collective Bargaining consists of four types of activities:

1) Distributive Bargaining:

2) Integrative Bargaining:

3) Attitudinal structuring:

4) Intra-Organisational Bargaining:

Objectives of Collective Bargaining:

Characteristics of Collective Bargaining:

Process of Collective Bargaining

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1. Preparation for Negotiation:

From the employees’ side also, preparation is required for the following reasons:

2. Identifying issues for Bargaining:

3. Negotiation: When the first two steps are completed, both parties engage in actual negotiation process at a time and place fixed for the purpose. There a re two types of negotiations:

Boulwarism:
Continuous Bargaining:

4. Initial negotiated agreement:

5. Ratification of agreement:

6. Implementation of agreement:

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Workers’ Participation in Management

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Workers’ participation in management is an essential ingredient of Industrial democracy. The concept of workers’ participation in management is based on Human Relations approach to Management which brought about a new set of values to labour and management.

Traditionally the concept of Workers’ Participation in Management (WPM) refers to participation of non-managerial employees in the decision-making process of the organization. Workers’ participation is also known as ‘labour participation’ or ‘employee participation’ in management. In Germany it is known as co-determination while in Yugoslavia it is known as self-management. The International Labour Organization has been encouraging member nations to promote the scheme of Workers’ Participation in Management.

Workers’ participation in management implies mental and emotional involvement of workers in the management of Enterprise. It is considered as a mechanism where workers have a say in the decision-making.

Definition: According to Keith Davis, Participation refers to the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share the responsibility of achievement.

According to Walpole, Participation in Management gives the worker a sense of importance, pride and accomplishment; it gives him the freedom of opportunity for self-expression; a feeling of belongingness with the place of work and a sense of workmanship and creativity.

The concept of workers’ participation in management encompasses the following:

ð It provides scope for employees in decision-making of the organization.

ð The participation may be at the shop level, departmental level or at the top level.

ð The participation includes the willingness to share the responsibility of the organization by the workers.

Features of WPM:

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Right to Consumer Education

2011-06-20T11:43:00.000+05:30

Right to Consumer Education means right to acquire knowledge and skill needed to become an informed service receiver for or on behalf of persons with disabilities, their caregivers or families throughout their lives. Ignorance of consumers, particularly the illiterate and rural service receivers, is mainly responsible for their exploitation. Appropriate forum for consumer education, enlightenment and protection of their rights is therefore mandatory to prevent such unhealthy practices in the service delivery organization for persons with disabilities.

CONSUMER MOVEMENT IN THE MODERN PERIOD

Consumer movement in the present form came into being only in the 1930's in the

West and only in the 60's in India.

The basic objectives of consumer movement world wide are as follows :

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The basic reason for the development of consumer movement in India

In India, the basic reasons for the consumers movement have been:

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The factors which stimulated the consumer movement in recent years are:

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Extra topics related to consumer education

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Definition of Retail Marketing

2011-06-20T11:40:00.000+05:30

Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word ‘retail’ is derived from the French work retailer, meaning ‘to cut a piece off’ or ‘to break bulk’.

The successful implementation of the components of the traditional marketing mix (product, place, price and promotion) is essential for success in retail marketing. The savvy marketer must have a thorough understanding of his or her customers to answer the questions that are implied by each of the 4 P's.

<!->Product

A retail business typically opens within a specific business category, such as men's clothes. The retailer must decide questions relating to price range, fashion and selection. All of these issues are answered by the assumptions that the retailer makes on the products most likely to attract his targeted customer base. The ability to match products and customers is as much art as science.

<!->Place

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<!>Price

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<!>Promotion
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Retail: The key growth drivers

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Changes in demographics: India has the lowest median age of 24 as compared to developed countries like USA, UK, Japan etc. The composition of the Indian population is shifting towards the age group of 20-49 i.e. the working population with purchasing power. Approximately 60% of the Indian population is below 30 years of age. Thus, India has the largest ‘young’ population in terms of sheer size and this young segment is the major driver of consumption as they have the ability (disposable income) and willingness to spend.

Rising income levels:

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Changes in consumer needs, attitudes and behaviour:

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Increased credit friendliness:
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Increasing awareness of Indian consumers:
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Retail management

2011-06-20T11:38:00.002+05:30

Retail management is the sale by seller in small quantities to customer not for resale
I prefer to understand "Retail Management" as:

The process of bringing the ultimate user to the main producer, through

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Choosing retail store location

2011-06-20T11:37:00.006+05:30

Where you choose to locate your retail business will have a major impact on everything your shop does. The difference between selecting the wrong location and the right site could be the difference between business failure and success.

Before choosing a retail store location, define how you see your business, both now and in the future.

· What do your customers look like?

· Can you visualize your building?

· Do you know what you want to sell and what you want your business to be known for?

· Have you determined how much retail space, storage area, or the size of the office you need?

Without the answers to these basic questions, it will be hard to find the perfect location for generating the maximum amount of profit for your retail store.

Type of Goods

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Factors of retail location

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Population and Your Customer

If you are choosing a city or state to locate your retail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library, chamber of commerce or the Census Bureau. Any of these sources should have information on the area's population, income and age. You know who your customers are, so make sure you find a location where your customers live, work and shop.

Accessibility, Visibility and Traffic

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· How many people walk or drive past the location.

· Is the area served by public transportation?

· Can customers and delivery trucks easily get in and out of the parking lot?

· Is there adequate parking?

Location Costs

Besides the base rent, consider all costs involved when choosing a retail store location.

· Who pays for lawn care, building maintenance, utilities and security?

· Who pays for the upkeep and repair of the heating/air units?

· If the location is remote, how much additional marketing will it take for customers to find you?

· Will the retailer be responsible for property taxes?

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Personal Factors

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Special Considerations

Your retail shop may require special considerations. Make a list of any unique characteristic of your business that may need to be addressed.

· Will the store require special lighting, fixtures or other hardware installed?

· Are restrooms for staff and customers available?

· Is there adequate fire and police protection for the area?

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Changes in the Indian Consumer

2011-06-20T11:37:00.000+05:30

When India opened its economy to the global marketplace in the early 1990s, many multinational

Corporations rushed in to pursue its middle-class consumers—an estimated 200 million people—only to

Confront low incomes, social and political conservatism, and resistance to change. It turned out that the

Indian consumer was a tough one to figure out and win over.

Things are changing. Although attitudes remain complex, they have shifted substantially toward
consumerism, particularly over the past decade. The country’s recent economic performance is a factor, of course. For three years, GDP growth has been strong and sustained, at an average annual rate of Around 8%. The population’s demographic profile also plays a role: Indians constitute a fifth of the world’s citizens below age 20. So a youthful, exuberant generation, weaned on success, is joining the ranks of Indian consumers.

Consumer Behaviour is changing in India

Recently India is undergoing a huge change in consumer behaviour. We are undergoing huge changes in last 5-6 years and off course, more to come. The road of super market now opened into a trendy ‘Mall Business’. People don’t always go to the malls only for shopping; it became a joint for a date or cool place to meet friends. “Window Shoppers” are more than actual shoppers. The concept of “Ghost Shoppers” is yet to come here, which will also happen eventually to keep the quality of the retail outlets. Buyers are God now, more knowledgeable and having more options in their hands before they decide to purchase and invest their money.

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Retail prospect in india

2011-06-20T11:36:00.003+05:30

India retail industry is the largest industry in India, with an employment of around 8% and contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favourable demographic patterns.

It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.

Shopping in India have witnessed a revolution with the change in the consumer buying behaviour and the whole format of shopping also altering. Industry of retail in India which has become modern can be seen from the fact that there are multi- stored malls, huge shopping centres, and sprawling complexes which offer food, shopping, and entertainment all under the same roof.

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Merchandising management

2011-06-20T11:36:00.000+05:30

Merchandising management -

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EXIM POLICY

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Salient Features

Comprehensive Foreign Trade Policy to make India a global trade player - focus on employment generation, along with massive push to exports.
Target plus scheme to achieve quantum increase in exports. Special package for agriculture - new scheme “Vishesh Krishi Upaj Yojana” to boost exports.
All goods and services exported exempt from service tax, all exporters with minimum turnover of Rs 5 crore exempt from bank guarantee requirement, major procedural simplification and rationalisation measures.
Improvements and additional flexibilities in EPCG scheme, DEPB to continue till replaced by suitable alternative.
Free trade warehousing zone to make India a global trading hub. EOUs exempted from service tax.
New rationalised scheme of status holder categorisation introduced. Special focus initiatives introduced in five areas.
Bio-technology parks to be set up.
Major thrust to service exports - “served from India” scheme - Export Promotion Council for Services.
New mechanism for grievance redressal.
Board of Trade to be revamped and given dynamic role.

<FEATURES OF EXIM POLICY:-

Union Commerce and Industry Minister Mr. Murasoli Maran announced the Eximpolicy for the 5 year period (2002-07) on March 31, 2002. The main thrust of the policyis to push India's exports aggressively by undertaking several measures aimed ataugmenting exports of farm goods, the small scale sector, textiles, gems and jewellery,electronic hardware etc. Besides these, the policy aims to reduce transaction cost to tradethrough a number of measures to bring about procedural simplifications. In addition, theExim policy removes quantitative restrictions (QRs) on exports, except a few sensitiveitems.

1. Special Economic Zones (SEZs):-

1(a) Offshore Banking Units (OBUs) shall be permitted in Special Economic Zones

(SEZs).
1(b) Units in SEZ would be permitted to undertake hedging of commodity price risks,
provided such transactions are undertaken by the units 'on stand alone basis.

2(c) Units in SEZ shall be permitted External Commercial Borrowings (ECBs) for a

tenure of less than three years.

3(d) Four existing EPZs have been converted into SEZs and 13 New SEZs have

already been given approval.

2. Employment Oriented Measures:- Exim (2002-07) policy initiated a number

of measures which would help employment orientation. Among them were the following:

(a) Agriculture :

1 Removal of quantitative and packaging restrictions on wheat and its products,

butter, pulses, grain and flour of barley, maize, bajra, ragi and jowar.

1Removal of restrictions on export of all cultivated (other than wild) varieties of

seed, except jute and onion.

2 20 Agricultural Export Zones have been notified.

3Transport subsidy for export of fruits, vegetables, floriculture, poultry and dairy

products.

43% special DEPB rate for primary and processed foods exported in retail

packaging of 1 kg. or less.

b) Cottage Sector and Handicrafts :

1An amount of Rs. 5 crore under Market Access Initiative (MAl)

has beenearmarked for promoting cottage sector exports coming

under the Khadi and Village Industries Commission (KVIC).

2Market Access Initiative (MAI) scheme for the development of

website for virtual exhibition of products from the handicrafts

sector. ,

3Entitlement for Export House Status at Rs. 5 crore instead of

Rs.15 crore for others.

4Entitlement to duty free imports of an enlarged list of items as

embellishments upto3% of FOB value of exports

With a view to encouraging further development of centres ofeconomic and export excellence such as Tirpur for hosiery, woollenblankets in Panipat, woollen knitear in Ludhiana, following benefitswould be available to small-scale sector.

1EPCG facility for the common service providers in these areas.

2Market Access Initiative (MAl) for creating focused technological

services and marketing abroad to the recognised associations of

units in SSI.

3Entitlement for Export House Status at Rs. 5 crore instead of

Rs.15 crore for others.

(d) Leather:-

Duty free imports upto 3% of f.o.b. value combined to leather

garments has been extended to all leather products.

(e) Textiles :

1Sample fabrics permitted duty free within the 3% limit for

trimmings and embellishments.

2Additional items such as zip fasteners, inlay cards, eyelets,

rivets, toggles,Velcro tape, cord and cord stopper included in input

output norms.

3Duty Entitlement Passbook (DEPB) rates for all kinds of blended

fabrics permitted.

(f) Gem and Jewellery :

1Import of rough diamonds is allowed freely at 0% customs duty.
2Licensing regime for rough diamond is being abolished.
3Value addition norms for export of plain jewellery reduced to 7%

and for all merchandised unstudded jewellery to 3%. .

4Personal carriage of jewellery allowed through Hyderabad and

Jaipur airport as well.

TECHNOLOGY ORIENTED

(a) Electronic Hardware:-

1Conversion of the Electronic Hardware Technology Park (EHTP)

into zero duty regime under the ITA (Information Technology

Agreement)-I

2Net Foreign Exchange as Percentage of Exports (NEEP) to be

made positive in 5 years.

3No other export obligation for units in EHTP.

(b) Chemicals and Pharmaceuticals :

165% of DEPB rate for pesticides formulations.
2No limit on export of samples. .
3Reimbursement of 50% of registration fees on registration of

drugs.

1Free import of equipment and other goods used abroad for

more than one year.

GROWTH ORIENTED

(a) Strategic Package for Status Holders:

1License, certificate, permissions. and customs clearances for both

imports and exports on self-declaration basis.

2Priority finance for medium and long term capital requirement as

per conditions notified by the RBI.

3Exemption from compulsory negotiation of documents through

banks, However, the remittance would continue to be received through

banking channels.

4100% retention of foreign exchange in Exchange Earner's Foreign

Currency 1EEFC) account.

5Enhancement in normal repatriation period from 180 days to

360 days,

(b) Diversification of Markets :

1Setting up of "Business Centre" in Indian missions abroad for visiting

Indian exporters/businessmen...

2ITPO portal to host a permanent virtual exhibition of Indian export

products.

3Focus Latin American Countries (LAC) has been extended upto March

2003.

4Focus Africa has been launched for developing trade relations with the

Sub-Saharan African region. The exporters exporting to these markets

shall be given Export House Status. on export of Rs. 5 crore.

5Links with the Commonwealth of Independent States (CIS) countries to

be revived.

1Transport subsidy for exports to be given to units located in North East,

Sikkim and-Jammu and Kashmir so as to offset the disadvantage of being

far from ports.

(d)Neutralising High Fuel Cost:-

1Fuel costs to be rebated for all export products. This would enhance the

cost competitiveness of our export products.

PROCEDURAL REFORMS

(a) DGFT:

1The new 8 digit commodity classification for imports introduced by

the Director General of Foreign Trade (DGFT) would also be adopted bythe Customs and Director: General of Commercial Intelligence andStatistics (DGCI&S) shortly. This will eliminate the classification disputesand hence reduce transaction costs and time.

2The maximum fee limit for electronic application under various

schemes has been reduced from Rs. 1.5 lakh to Rs. 1.00 lakh.

1 Same day licensing introduced in all regional offices.

(b) Customs :

1 Adoption and harmonisation of the 8 digit Indian Trade Classification

(ITC) Harmonised System (HS) code.

2 The percentage of physical examination of export cargo has already

been reduced to less than 10% except for a few sensitive destinations.

3 Fixation of special brand rate of drawback within 15 days.

1 Direct negotiation of export documents to be permitted.

2 100% retention in Exchange Earners Foreign Currency (EEFC)

accounts.

3 Enhancement in normal repatriation period from 180 days to 360

days.'

TRUST BASED

1(a) Import and export of samples to be liberalised for encouraging

product up gradation

2(b) Penal interest rate for bonafide defaults to be brought down from

24% to 15%.

3(c) No penalty for non-realisation of export proceeds in respect of cases

covered. by ECGC insurance package.
4(d) No seizure of stock in trade so as to disrupt the manufacturing
process affecting delivery

schedule of exporters.
1(e) Foreign Inward Remittance Certificate (FIRC) to be accepted in lieu of
Bank Realisation

Certificate for documents negotiated directly.

(f) Optional facility to convert from one scheme to another scheme. In

case the

exporter is denied the benefit under one scheme, he shall be entitled to claim
benefit under
some other scheme.
(g) Newcomers. to be entitled for licences without any verification against
execution of Bank

Balance of Payment (BOP)

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Balance of Payment (BOP) - Concept & Definition

Most of exports and imports involve finance i.e. receipts and payments in money. An account of all receipts and payments is termed as Balance of Payments (BOP).

According to Kindle berger, "The balance of payments of a country is a systematic record of all economic transactions between the residents of the reporting country and residents of foreign countries during a given period of time".

The balance of payment record is maintained in a standard double-entry book-keeping method. International transactions enter in to the record as credit or debit. The payments received from foreign countries enter as credit and payments made to other countries as debit.

Balance of Payment is a record pertaining to a period of time; usually it is all annual statement. All the transactions entering the balance of payments can be grouped under three broad accounts; (1) Current Account, (2) Capital Account, and (3) Official International Reserve Account. However, it can be vertically divided into many categories as per the requirement.

Structure of Balance of Payment (BOP) ↓

1. Trade Account Balance

2. Current Account Balance

3. Capital Account Balance

4. Foreign Exchange Reserves

5. Errors and Omission

for details visit- http://www.mbachannel.blogspot.in/2014/05/balance-of-payment-bop.html

Foreign Institutional Investment or investors

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One who propose to invest their proprietary funds or on behalf of "broad based" funds or of foreign corporate and individuals and belong to any of the under given categories can be registered for FII.

Pension Funds
Mutual Funds
Investment Trust
Insurance or reinsurance companies
Endowment Funds
University Funds
Foundations or Charitable Trusts or Charitable Societies who propose to invest on their own behalf, and
Asset Management Companies
Nominee Companies
Institutional Portfolio Managers
Trustees
Power of Attorney Holders
Bank

for details visit- http://www.mbachannel.blogspot.in/2014/05/foreign-institutional-investment-or.html

International marketing (IM) or global marketing

2011-06-20T11:30:00.000+05:30

International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm.It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets.

According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives."

Introduction to International Marketing

International marketing is simply the application of marketing principles to more than one country. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term. For the purposes of this lesson on international marketing and those that follow it, international marketing and global marketing are interchangeable.

Differences between domestic marketing and international marketing

Please visit- http://www.mbachannel.blogspot.in/2014/05/international-marketing-im-or-global.html

Benefits of International Marketing

please visit- http://www.mbachannel.blogspot.in/2014/05/international-marketing-im-or-global.html

Problems facing India in WTO & its Implementation:

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One of the most dramatic events that have taken place in later part of 20^th century was culmination of GATT 1947 into WTO (The world Trade organization), which came into being on 1^st January 2005. This WTO has set expectations high in various member countries (by now 149 including latest addition of Saudi Arabia) regarding spurt in world trade where India has insignificant share in the pie-Only 0.75% at the most. Even in IT exports the share of Indian exporters is just peanuts in view of overall world market.

Since formation of WTO there have been regular meetings of Ministerial Conferences (Highest Policy level body of WTO) religiously every 2 years and 5 such meetings have taken place while world prepares for the Hong Kong meeting to take place shortly, the sixth one.

While 5^th meet at Cancun, Mexico was more or less failure, the earlier one at Seattle, USA was received with brickbats from environmentalist and Labor union Groups protesting against WTO regime.

It is statistical fact that world trade has definitely grown since 1995 thereby giving indicators that international trade reforms do play important role in boosting economic development of various countries.

Problems facing India in WTO & its Implementation:

please details visit- http://www.mbachannel.blogspot.in/2014/05/problems-facing-india-in-wto-its.html

MARKETING MANAGEMENT PROCESS

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The Marketing Management Process consists of analyzing market opportunities, researching and Selecting target markets, developing marketing strategies, planning marketing tactics, and implementing and controlling the marketing effort.

Analyzing Market Structure and Behavior

Researching and Selecting Market Opportunities

Developing Market Strategies

Planning Marketing Tactics

Implementing and Controlling the Marketing Effort

for details visit- http://www.mbachannel.blogspot.in/2014/05/marketing-management-process.html

Cost of Capital

2011-06-20T11:22:00.002+05:30

Explicit and Implicit cost of capital

Explicit cost of capital of any source is the discount rate that equates the present value of cash inflows that are incremental to the taking of the financing oppurtunity with the prsent value of its incremental cash outflows.It is the internal rate of return cash inflows and outflows.

Implicit cost of capital is also known as the opportunity cost of capital.It is rate associated with best investment oppurtunity .

Eg. Mr X has a choice of investing Rs 1000 in the shares or bank deposits.at 12%.If he invests 1000 in shares implicit cost of capital is 12%

for details visit- http://www.mbachannel.blogspot.in/2014/05/cost-of-capital.html