Month: September 2022

There can be a temptation to go too broad

Linked to this, sometimes when companies set out on international marketing research projects, they make the mistake of going too broad and trying to understand a region as a whole. Another error we see is firms commissioning research to target one market and then using this as a jumping off point into others with “similar” attributes. This inevitably leads in costly mistakes as brands map their assumptions about one market onto another.

To avoid this, be clear on the emphasis of your research. Where are you looking to focus? Why? Looking too broadly across a region of different markets, or exploring how an entire product range might perform, can cloud the picture.

International markets are incredibly diverse

Some business fails to appreciate the diversity within a region or indeed a country. Only by rooting out the nuances of different geographical areas, cultures and consumers, can you get an accurate picture of what people value and whether your products and services might succeed.

Customer Understanding

In particular trying to understand the customer or the consumers in an international market. Often, we have to conduct international marketing research. That does come with some specific challenges or hurdles that we have to overcome.

Language Issues

One language issue is translating our materials. Whether it’s a survey or interview questions or even an advertisement, translating those things into the native language in another country can prove really challenging. Often, things just don’t translate literally. So, we have to translate and then back translate to make sure that the meaning doesn’t change. That can be really critical to getting our message across.

Cultural Issues

Another issue that we have to consider are just broad cultural issues. People from certain cultures are going to be much more willing to engage in discussions with us about our product or our brand or other marketing issues than certain people from other cultures. That is, some cultures are reluctant to answer fully or tell you what you want to hear.

Finding the right research partner

The next big question is whether you have the research capabilities to conduct meaningful projects internationally. Most brands and their research partners can run domestic research projects with ease. But if you’re in the UK, say, even going as far afield as France or Germany requires different sensibilities and capabilities. The more international you get, the harder you need to look for that kind of experience and expertise.

Technical Issues

We don’t have the same levels of technology everywhere in the world. While that level of technology is probably rising almost everywhere, we’re not all starting from the same place.

So, if we plan to use any real level of technology in conducting our marketing research, we’d better make sure that that level of technology is supported in the market that we’re going into.

Ensuring that the project is realistic from the outset

This is where all the other challenges in international marketing research come together: which markets, what purpose, the capabilities available, and the effectiveness of the output all within a budget that makes sense. There are always going to be limits to what’s practical and the last thing any client needs is to be spending large sums testing international markets to no effect.

Bringing together local and global expertise

This is one of the biggest challenges in international marketing research and there has to be a collaborative effort and a shared understanding of the mission, the methodology and the insights to overcome this. A research team at HQ might work with a local marketing team to understand how to position a product for success in an emerging market. But if the teams are siloed and don’t have a consistent understanding of the brief, their approach to researching the market and their findings might not actually help deliver on the challenge at hand.

Faced by research:

Problems with secondary data:

Secondary data are not available in adequate volume. Further, the secondary data collected are unreliable. They suffer from lack of comparability of data.

Multiplicity of markets:

Problems of numerous markets are always experienced in overseas market research. Research project covers a number of foreign markets. This ultimately augments the costs and problems involved in overseas market research.

Problems of communication:

Different countries have different languages. They create problems of translation and communication. Consumer market research is met with more communication problems than industrial market research, because of the fact that industrial market research focuses on technical factors alone. But consumer market research takes care of every pertinent detail related to market conditions.

Problems in collecting primary data:

Buyer behavior of customers varies from country to country. As people behave differently, collecting primary data from them is comparatively difficult.

Pricing and costing are two different things and an exporter should not confuse between the two. Price is what an exporter offer to a customer on particular products while cost is what an exporter pay for manufacturing the same product.

Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However, there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency.

Export Pricing can be determined by the following factors:

• Prompt deliveries and continuity in supply.
• After-sales service in products like machine tools, consumer durables.
• Product differentiation and brand image.
• Frequency of purchase.
• Range of products offered.
• Specialty value goods and gift items.
• Credit offered.
• Preference or prejudice for products originating from a particular source.
• Aggressive marketing and sales promotion.
• Presumed relationship between quality and price.
• Prompt acceptance and settlement of claims.
• Unique value goods and gift items.

Export Costing

Export Costing is basically Cost Accountant’s job. It consists of fixed cost and variable cost comprising various elements. It is advisable to prepare an export costing sheet for every export product.

As regards quoting the prices to the overseas buyer, the same are quoted in the following internationally accepted terms which are commonly known as Incoterm.

The following players are part of distribution channels:

A producer: Can be any company working with a primary product, such as agricultural products, to a manufacturer making products from (primary) materials, for instance a garment manufacturer using organic cotton, yarn, buttons and other accessories.

A specialised exporter: May export the goods, if the producer does not do it by his/herself. The exporter takes care of logistical arrangements and ships the products to his/her counterpart in the target market, the importer.

The importer: Receives and puts the products on the target market.

Agents or Distributors: Can help put the product on the target market, if not done without intermediators. In fact, the importer may also be a retailer, in which case the importer is the final step before the end consumer. More commonly, however, the importer/distributor transfers the product to a retailer, for instance in the case of final products where no further processing is needed.

The Retailer: Sells products to end consumers.

Wholesalers: May be an extra stop between retailer and importer, as wholesalers supply several businesses.

The processing industry: Is a player if the product is used in its production, such as ingredients used in bakery products (chocolate in energy bars for instance), bulk foodstuff repacked in consumer packaging (seeds and nuts for example) or fabrics used for textile products made in the target market.

Packaging:

Language

A package does promotion functions too. The literature printed on the package material must be in local language. Then only a majority of the users can understand the product information the package label bears. Thus, language is one of the important considerations to be borne in mind while designing export packaging.

Buyer’s specifications

Sometimes, buyers specify their requirements with regard to packaging. They may like to purchase the product in a specific form which may be convenient to them. When the package is in the form of a tube rather than a jar, it would be easy for the buyers to handle the package of the product till it is used up.

Regulations in the foreign countries

Packaging is subject to government regulations in foreign countries. Packaging standards are specified for certain commodities. If packaging does not comply with foreign regulations, it may attract punitive action.

Length of the distribution channel

Channel distribution is the pathway of reaching goods to the ultimate consumers. A lengthy distribution channel involves too many middlemen taking a longer time between production and final consumption. Then the package must endure the rigors of travel and handling in the long distribution channel. Stronger packaging is preferred in such cases.

Depending upon the time factor involved in the distribution channel, packaging must be designed. A package should be capable of withstanding the stresses of handling in transport and storage.

Disposability of packages

Generally, consumers in developed countries prefer disposable containers. If the package is disposable immediately after use, then due care must be given to the package material. The package material should not cause environmental hazards. It would be better if the material could be recycled.

Environmental factors

Environmental factors like weather and climatic conditions greatly influence the package design. A tropical country requires different packaging than for a country with cold climate.

Size of package

The size of the package is one of the important considerations in designing packages. It depends upon the buying characteristics of consumers. If buyers purchase regularly at short intervals, then the size of the package can be small. On the other hand, buyers with freezers at home may prefer big packages.

Identification and selection of markets is the first stage in international marketing. Before making an entry in the international market, a firm has to identify those markets in which it can sell its products easily. To take this decision, firm has to analyse the potentials of various foreign markets and their respective marketing environments. Some markets may not be potentially good, and the firm’s objectives and resources may not allow it to operate in some other markets.

Therefore, a proper analysis is necessary for selecting the proper and appropriate foreign market. One market differs from another but still in one respect or the other, they can be grouped in different segments. It is important for the firm entering the world market to segment them in such a way that it is able to effectively meet their requirements. No matter how much attempt is made, the firm will not succeed unless it is marketing right product in the right market.

It costs lot of time and money to find out a suitable foreign market for a product. No firm has unlimited resources. Proper selection of markets would avoid waste of time and effort. One product may be more acceptable in some countries than in others. It would, therefore, be better to concentrate on a few markets than in more markets.

Key Factors in Product Selection

• If possible, avoid products which are monopoly of one or few suppliers. If you are the manufacturer make sure sufficient capacity is available in-house or you have the wherewithal to outsource it at short notice. Timely supply is a key success factor in export business.
• The product should be manufactured or sourced with consistent standard quality, comparable to your competitors. ISO or equivalent certification helps in selling the product in the international market.
• The price of the exported product should not fluctuate very often threatening profitability to the export business.
• Carefully study the various government incentive schemes and tax exemption like duty drawback and DEPB.
• Import regulation in overseas markets, especially tariff and non-tariff barriers. Though a major non-tariff barrier (textile quota) has been abolished – there are still other tariff and non-tariff barriers. If your product attracts higher duty in target country – demand obviously falls.
• Strictly check the government policies related to the export of a particular product. Though there are very few restrictions in export it is better to check regulatory status of your selected product.
• Registration/Special provision for your products in importing country. This is especially applicable for processed food and beverages, drugs and chemicals.
• Seasonal vagaries of selected products as some products sell in summer, while others in winter. Festive season is also important factor, for example certain products are more sellable only during Christmas.
• Keep in mind special packaging and labelling requirements of perishable products like processed food and dairy products.
• Special measures are required for transportation of certain products, which may be bulky or fragile or hazardous or perishable.

Pricing can be the most challenging due to different market forces and pricing structures around the world.

The pricing is based on estimation, evaluation, size and standard. The price in the market is the exchange value of goods and services expressed in terms of currency. Accordingly, pricing simply means determining the price for a good or service. It is an activity that needs to be repeated and is a continuous process. This continuity is due to environmental changes and the lack of stability in market conditions, which justifies the need to repeat this process.

Although price competition is one of the major issues that companies face it in international markets, but many companies cannot solve this problem efficiently. Price is one of the most important and effective factors that helps companies to attract customers and keep up their loyalty and satisfaction because the quality of the goods and services from different companies is booming, and the competition among different companies are intensifying.

Pricing on global markets is more difficult than pricing in domestic markets. In the domestic market, the manager knows the effects of the cultural and economic environment on pricing policies. But in the international markets, due to the lack of familiarity with foreign markets and the variety of those markets, it is not easy to decide on pricing policy.

In international markets there are fierce problems in pricing: the difference in customer response to pricing strategies by commodity in different markets, the limits imposed by governments on the level of profits and prices, the competition that determines price changes in the market, and the existence of different rules. But despite these problems, a company that wants to compete effectively and reach its goals in terms of sales and profits should consider pricing, local conditions and coordination with other elements of marketing mix. In international pricing, in addition to factors affecting domestic pricing, other factors should be considered, such as exchange rate fluctuations, currency with which prices are announced, government control over tariffs, and a group of economic and cultural factors that are found in different markets and differ with each other.

Pricing Considerations 

• What type of market positioning (i.e., customer perception) does your company want to convey from its pricing structure?
• Does the export price reflect your product’s quality?
• Is the price competitive?
• What type of discount (e.g., trade, cash, quantity) and allowances (e.g., advertising, trade-offs) should your company offer its foreign customers?
• Should prices differ by market segment?
• What should your company do about product-line pricing?
• What pricing options are available if your company’s costs increase or decrease?
• Is the demand in the foreign market elastic or inelastic?
• Is the foreign government going to view your prices as reasonable or exploitative?
• Do the foreign country’s antidumping laws pose a problem?

7 C’s of International Pricing Strategy

Pricing strategy brand depends on three primary factors: your cost to offer the product to consumers, competitors’ products and pricing, and the perceived value that consumers place on your brand and product vis-a-vis the cost. These three factors can be referred to as the 3 C’s of Pricing Strategy and are relevant both domestically and internationally.:

Competitors: Comprehensive and up-to-date analysis of your competitors’ in the international marketplace competing products, brand, and prices as well as where your brand is positioned relative to those competitors.

Costs: Comprehensive understanding of all costs related to offering the product, including development, creative, production, distribution, storage, advertising, manpower, and so on. International transportation and related costs like freight, insurance & handling lead to increase in costs. And then there is TAX.  There could be custom duty and turnover tax like the local GST or VAT which could result in an escalating price.

Customers: Customers overseas will have a different perception of the value of the product as compared to domestic markets due to many differential cultural and other factors. It should also be noted that customers today are able to instantly compare their prices with domestic prices on the internet.

Besides the primary factors (3 c’s) that determine international pricing there are a range of secondary factors which are unique to each international market. These make the pricing decision much more complex in international marketing.  When a firm crosses its domestic borders and enters a foreign country it encounters many unique international dimensions. These factors affect the pricing decision and consequently in case of international pricing we have expanded the 3 C’s of pricing to 7 C’s of International Pricing by adding the following additional 4 C’s:

Channels of Distribution: Lengthening channels of distribution means that more people are going to be handling your product including importers and wholesalers which causes not just cost escalation but increases distribution complexities.

Cultural Differences: The international pricing decision requires a comprehensive understanding of the overseas markets culture as well as the wants and needs of its inhabitants, including their perceptions of the value of your brand and products and your competitors’ brands and products.

Currency Rates: The complexities of multiple currencies which are subject to exchange rate fluctuations plus conversion costs.

Control by Government: Governmental and bureaucratic controls and regulations can be onerous and complex, like in China and even some European countries. Some countries have price control over some products like pharmaceuticals, fuel and food.

A key factor in any export business is clear understanding and detail knowledge of products to be exported. The selected product must be in demand in the countries where it is to be exported. Before making any selection, one should also consider the various government policies associated with the export of a particular product.

Whether companies are exporting first time or have been in export trade for a long time – it is better for both the groups to be methodical and systematic in identifying a right product. It’s not sufficient to have all necessary data ‘in your mind’ – but equally important to put everything on paper and in a structured manner. Once this job is done, it becomes easier to find the gaps in the collected information and take necessary corrective actions.

There are products that sell more often than other product in international market. It is not very difficult to find them from various market research tools. However, such products will invariably have more sellers and consequently more competition and fewer margins. On the other hand a niche product may have less competition and higher margin – but there will be far less buyers.

Fact of the matter is all products sell, though in varying degrees and there are positive as well as flip sides in whatever decision you take popular or niche product.

Factors in Product Selection

• The product should be manufactured or sourced with consistent standard quality, comparable to your competitors. ISO or equivalent certification helps in selling the product in the international market.
• If possible, avoid products which are monopoly of one or few suppliers. If you are the manufacturer make sure sufficient capacity is available in-house or you have the wherewithal to outsource it at short notice. Timely supply is a key success factor in export business
• The price of the exported product should not fluctuate very often – threatening profitability to the export business.
• Strictly check the government policies related to the export of a particular product. Though there are very few restrictions in export it is better to check regulatory status of your selected product.
• Carefully study the various government incentive schemes and tax exemption like duty drawback and DEPB.
• Import regulation in overseas markets, specially tariff and non-tariff barriers. Though a major non-tariff barrier (textile quota) has been abolished – there are still other tariff and non-tariff barriers. If your product attracts higher duty in target country demand obviously falls.
• Registration/Special provision for your products in importing country. This is specially applicable for processed food and beverages, drugs and chemicals.
• Seasonal vagaries of selected products as some products sell in summer, while others in winter. Festive season is also important factor, for example certain products are more sellable only during Christmas.
• Keep in mind special packaging and labeling requirements of perishable products like processed food and dairy products.
• Special measures are required for transportation of certain products, which may be bulky or fragile or hazardous or perishable.

Some factors to consider include:

1. Geographical Factors
   • Country, state, region,
   • Time zones,
   • Urban/rural location logistical considerations e.g. freight and distribution channels
2. Economic, Political, and Legal Environmental Factors
   • Regulations including quarantine,
   • Labelling standards,
   • Standards and consumer protection rules,
   • Duties and taxes
3. Demographic Factors
   • Age and gender,
   • Income and family structure,
   • Occupation,
   • Cultural beliefs,
   • Major competitors,
   • Similar products,
   • Key brands.
4. Market Characteristics
   • Market size,
   • Availability of domestic manufacturers,
   • Agents, distributors and suppliers.

Pricing on global markets is more difficult than pricing in domestic markets. In the domestic market, the manager knows the effects of the cultural and economic environment on pricing policies. But in the international markets, due to the lack of familiarity with foreign markets and the variety of those markets, it is not easy to decide on pricing policy.

In international markets there are fierce problems in pricing: the difference in customer response to pricing strategies by commodity in different markets, the limits imposed by governments on the level of profits and prices, the competition that determines price changes in the market, and the existence of different rules. But despite these problems, a company that wants to compete effectively and reach its goals in terms of sales and profits should consider pricing, local conditions and coordination with other elements of marketing mix. In international pricing, in addition to factors affecting domestic pricing, other factors should be considered, such as exchange rate fluctuations, currency with which prices are announced, government control over tariffs, and a group of economic and cultural factors that are found in different markets and differ with each other.

A company must have a clear understanding of the international marketing environment before deciding to expand its activities abroad. In an international pricing strategy, managers generally face a wide range of external and internal factors, and the main concern is how the managers come to terms with these factors and determine their final effect. Additionally, they should consider the political, cultural, linguistic, economic and legal differences in each market in global environment.

Penetration pricing in the International market

 Penetration pricing is the opposite of skimming in that the initial price is set very low to get the largest international market share. Internationally penetration pricing can allow profitable companies to gain access to market share in foreign countries. However, the trade policies of the foreign government would need to be considered as they might deem the low-priced products to be dumping or anti-competitive and in breach of their local legislation. As opposed to Apple, most manufactures of Android phones have a strategy of penetrating the International market.

Pre-emptive and extinction pricing strategies

Preemptive and extinction strategies are similar to penetration pricing policies in that they set the price very low in order to fight competition. Pre-emptive international pricing strategy sets the price very low so that new entrants to the international market find it uneconomical to enter that market. The example of Nintendo Wii which was first to enter the gaming market, intentionally set a low price to capture the market as a pre-emptive strategy against Sony which was to launch its Playstation. Extinction international pricing strategy is a strategy of driving away existing competitors by setting a low price that makes the business of competitors unviable. This could lead to a price war and is a risky strategy it could also lead to breaching of ‘anti-dumping or fair competition’ legislation in some countries.

Differential Pricing in International markets

As discussed above, customers in different international markets have differing value perceptions of a product as well as differing purchasing power. Besides this there could be other local factors discussed above which could affect the pricing of a product. A differential pricing strategy is a ‘horses for course’ approach allowing the firm to charge different prices across different international segments.

Differential pricing can be used by a multinational firm where it wants to pursue different pricing strategies in different markets. For example, a firm using differential pricing may pursue skimming in one geographical market and penetration pricing in another.

Components:

Costs 

The actual cost of producing a product and bringing it to market is key to determining if exporting is financially viable. 

Cost-plus method is when the exporter starts with the domestic manufacturing cost and adds administration, research and development, overhead, freight forwarding, distributor margins, customs charges, and profit. However, the effect of this pricing approach may be that the export price escalates into an uncompetitive range once exporting costs have been included. 

Marginal cost pricing is a more competitive method of pricing a product for market entry. This method considers the direct out-of-pocket expenses of producing and selling products for export as a floor beneath which prices cannot be set without incurring a loss. For example, additional costs may occur because of product modification for the export market. Costs may decrease, however, if the export products are stripped-down versions or made without increasing the fixed costs of domestic production.

Other costs should be assessed for domestic and export products according to how much benefit each product receives from such expenditures, and may include:

• Fees for market research and credit checks 
• Business travel expenses 
• International postage and telephone rates 
• Translation costs 
• Commissions, training charges, and other costs associated with foreign representatives 
• Consultant and freight forwarder fees 
• Product modification and special packaging costs 

After the actual cost of the export product has been calculated, you should formulate an approximate consumer price for the foreign market. 

Market Demand

For most consumer goods, per capita income is a good gauge of a market’s ability to pay. Some products (for example, popular U.S. fashion labels) create such a strong demand that even low per capita income will not affect their selling price. Simplifying the product to reduce its selling price may be an answer for your company in markets with low per capita income. Your company must also keep in mind that currency fluctuations may alter the affordability of its goods.  

Competition

In the domestic market, U.S. companies carefully evaluate their competitors’ pricing policies. You will also need to evaluate competitor’s prices in each potential export market. If there are many competitors within the foreign market, you may have to match the market price or even underprice the product or service for the sake of establishing a market share. If the product or service is new to a particular foreign market, however, it may actually be possible to set a higher price than is feasible in the domestic market.

Pricing Summary

It’s important to remember several key points when determining your product’s price: 

• Determine the objective in the foreign market.
• Compute the actual cost of the export product.
• Compute the final consumer price.
• Evaluate market demand and competition.
• Consider modifying the product to reduce the export price.
• Include “non-market” costs, such as tariffs and customs fees.
• Exclude cost elements that provide no benefit to the export function, such as domestic advertising.

International communication consists of those activities which are used by the marketer to inform and persuade the consumer to buy. A well-designed promotion mix includes advertising, sales promotions, personal selling, and public relations which are mutually reinforcing and focused on a common objective.

Developing an international communication strategy involves five steps:

1. Determining the promotional mix (the blend of advertising, personal selling, and sales promotions) by national markets.
2. Determining the extent of worldwide standardization.
3. Developing the most effective messages.
4. Selecting effective media.
5. Establishing the necessary controls to assist in achieving worldwide marketing objectives.

Communication is the side of international marketing with the greatest similarities throughout the world. Paradoxically, it may also have the distinction of involving the greatest number of unique culturally related problems. Adapting promotional strategy to cultural peculiarities which exist among the world’s markets is the challenge confronting the international market.

Advertising is usually the most visible component of communication, but it is not the only component of communication. To communicate with and influence customers, several promotional tools are available. Marketers have at their disposal the major methods of promotion i.e. advertising, sales promotion, publicity, pubic relation, personal selling and word of mouth.

Taken together these comprise the promotion mix. But in the present scenario, the promotional tools have widened their scope and number of types. There are many other promotional tools also which are considered under the promotion mix such as e- commerce/internet marketing, sponsorship, exhibitions, packaging, point-of-purchase displays, corporate communications/ identity, event marketing, trade shows, and customer service.

When these tools are integrated in a harmonious manner to reach and exceed the promotion objective, the outcome is called Integrated Marketing Communication (IMC). IMC has been adopted as the best possible way to promote one’s offering according to the situation.

Export

An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an exporter; the foreign buyer is an importer. Services that figure in international trade include financial, accounting and other professional services, tourism, education as well as intellectual property rights. Exportation of goods often requires the involvement of customs authorities.

International agreements limit trade-in and the transfer of certain types of goods and information, e.g., goods associated with weapons of mass destruction, advanced telecommunications, arms and torture and also some art and archaeological artefacts:

• Nuclear Suppliers Group limits trade in nuclear weapons and associated goods (45 countries participate).
• The Australia Group limits trade in chemical and biological weapons and associated goods (39 countries).
• Missile Technology Control Regime limits trade in the means of delivering weapons of mass destruction (35 countries).
• The Wassenaar Arrangement limits trade in conventional arms and technological developments (40 countries).

Promotion

Using various online and offline outlets, sales promotion creates limited time deals or promotions on products or services in order to increase short-term sales. It can include sales, coupons, contests, freebies, prizes and product samples.

When conducting a sales promotion, it’s important to consider:

• how much it costs and whether the volume of sales will make up for the lost revenue
• whether it will build loyalty or just attract one-off purchasers
• if the promotion fits with the brand’s image

Organization trade Fair

A trade fair, also known as trade show, trade exhibition, or trade exposition, is an exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products and services, meet with industry partners and customers, study activities of rivals, and examine recent market trends and opportunities.

In contrast to consumer fairs, only some trade fairs are open to the public, while others can only be attended by company representatives (members of the trade, e.g. professionals) and members of the press, therefore trade shows are classified as either “public” or “trade only”. A few fairs are hybrids of the two; one example is the Frankfurt Book Fair, which is trade only for its first three days and opens to the general public on its final two days. They are held on a continuing basis in virtually all markets and normally attract companies from around the globe.

The India International Trade Fair, ever since its inception in 1980, has evolved as a major event for the business community. It is a premier event organized by the India Trade Promotion Organization, the nodal trade promotion agency of the Government of India. The event is held between 14 and 27 November every year at Pragati Maidan, New Delhi, India.

The Theme of IITF 2020 was  Aatmanirbhar Bharat

Significance

IITF is a major tourist attraction and lakhs of people visit the fair every year. This annual event provides a common platform for the manufacturers, traders, exporters and importers. The fair displays comprises a wide range of products and services including automobiles, coir products, jute, textiles, garments, household appliances, kitchen appliances, processed food, beverages, confectionery, pharmaceuticals, chemicals, cosmetics, bodycare & health care products, telecommunication, power sector, electronic sector, furniture, home furnishings, sporting goods, toys, and engineering goods.

The participation figures verify the huge worldwide response of IITF. The 26th edition of IITF (2006) had around 7500 national and 350 international exhibiting companies. The fair attracted a huge audience of more than 3 million general visitors & 2,75,000 business visitors including 91 delegations from 53 countries. In fact, all business avenues will be encouraged to participate, to represent India in its totality and open fresh avenues for major business expansion.

IITF 2019 included 8800 exhibitors displayed in an area of 94,300 square metres (1,015,000 sq ft). (gross) with 30 States and Union Territories participated in as exclusive pavilions. In this edition 299 foreign companies from 25 foreign countries displayed their products. Around 40,000 domestic business visitors and foreign trade delegations from Afghanistan, Angola, Australia, Bangladesh, Brunei, Burkina Faso, Canada, China, Costa Rica, France, Germany, Ghana, Hong Kong, Iran, Indonesia, Japan, Kenya, Lesotho, Malawi, Malaysia, Mexico, Nepal, Nigeria, Oman had visited the fair. Over one million general visitors visited the fair.

Exhibitions

An exhibition, in the most general sense, is an organized presentation and display of a selection of items. In practice, exhibitions usually occur within a cultural or educational setting such as a museum, art gallery, park, library, exhibition hall, or World’s fairs. Exhibitions can include many things such as art in major museums and smaller galleries, interpretive exhibitions, natural history museums and history museums, and also varieties such as more commercially focused exhibitions and trade fairs.

In British English the word “exhibition” is used for a collection of items placed on display and the event as a whole, which in American English is usually an “exhibit“. In both varieties of English each object being shown within an exhibition is an “exhibit“. In common usage, “exhibitions” are considered temporary and usually scheduled to open and close on specific dates. While many exhibitions are shown in just one venue, some exhibitions are shown in multiple locations and are called travelling exhibitions, and some are online exhibitions. Exhibitions featuring especially fragile or valuable objects, or live animals may be shown only during a formal presentation, under the close supervision of attendant or educator. Temporary exhibits that are transported from institution to institution are travelling exhibits.

Though exhibitions are common events, the concept of an exhibition is quite wide and encompasses many variables. Exhibitions range from an extraordinarily large event such as a World’s fair exposition to small one-artist solo shows or a display of just one item. Often a team of specialists is required to assemble and execute an exhibition; these specialists vary depending on the type of said exhibit. Curators are sometimes involved as the people who select the items in an exhibition. Writers and editors are sometimes needed to write text, labels and accompanying printed material such as catalogs and books. Architects, exhibition designers, graphic designers and other designers may be needed to shape the exhibition space and give form to the editorial content. Organizing and holding exhibitions also requires effective event planning, management, and logistics.

International marketing refers to marketing which is done globally in several nations. It is a marketing which is done across national borders for fulfilling the needs of peoples worldwide. International marketing is also known as global marketing. It is the one which enables companies in reaching out to customers internationally.

International marketing is not as easy as domestic marketing. International marketing environment poses a number of uncertainties and problems. As against, national markets, international markets are more dynamics, uncertain, and challenging. Especially, cultural diversities and political realities in several nations create a plenty of barriers that need special attention. In the same way, geographical constraints cannot be totally undermined. Widespread terrorism has created a new threat to international trade.

Though the world is advancing in terms of information technology, innovative and superior methods of organizing marketing efforts (like horizontal organisation, network organisation, virtual organisation), global efforts for smooth international trades, and so forth, yet international marketing is not that much easy to pursue, it has become a challenge to accept.

Tariff Barriers:

Tariff barriers indicate taxes and duties imposed on imports. Marketers of guest countries find it difficult to earn adequate profits while selling products in the host countries. Sometimes, to prevent foreign products and/or promote domestic products, strategically tariff policies are formulated that restricts international marketing activities. Frequent change in tariff rates and variable tariff rates for various categories of products create uncertainty for traders to trade internationally. Antidumping duties levied on imports and defensive strategies create difficulty for exporters.

Administrative Policies:

Bureaucratic rules or administrative procedures both in guest countries and host countries make international (export and/or import) marketing harder. Some countries have too lengthy formalities that exporters and importers have to clear. Unjust dealings to get the formalities/ matters cleared create many problems to some international players. International marketers have to accustom with legal formalities of several courtiers where they wants to operate.

Considerable Diversities:

Different countries have their own unique civilization and culture. They pose special problems for international marketers. Global customers exhibit considerable cultural and social diversities in term of needs, preferences, habits, languages, expectations, buying capacities, buying and consumption patterns, and so forth. Social and personal characteristics of customers of different nationalities are real challenges to understand and incorporate. Compared to local and domestic markets, it is more difficult to understand behaviour of customers of other countries.

In the same way, as against domestic markets, to design and modify marketing mix over time for international markets seem more difficult. Market segmentation, product design, pricing, and distribution need more information and efforts. Promoting products in international markets is a formidable task. Message preparation and execution in suitable media in international markets is not easy game to play.

Language and religious diversities are the real challenge for international business players. There are 6000 languages in the world. China (20%) is the largest in term of native speakers, followed by English (6%), and followed by Hindi (5%). Yet English is recognized as global business language.

English speaking countries can contribute the largest share (40%) in global business. Religious diversities seem difficult to cope with as they determine needs and wants of people. At present Christianity is the largest in the world (1.7 billion), followed by Islam (1.0 billion), followed by Hinduism (750 millions), and followed by Buddhism (350 millions).

Political Instability or Environment:

Different political systems (democracy or dictatorship), different economics systems (market economy, command economy, and mixed economy), and political instability are some of real challenges that international markers have to face. Political atmosphere in different courtiers offer opportunities or pose challenges to international marketers.

Governments in different nations have their priorities, philosophies, and approaches to the international trades. They may adopt restrictive (protectionist) or liberal approach to international business operations. Especially, political approaches of dominant nations have more influence in international marketing activities.

Long-term trend of global political environment is unpredictable and uncertain. Economic policies of different nations (industrial policies, fiscal policies, agricultural policies, export-import policies, etc.,) do have direct impact on international trade. Drastic change in these policies creates endless difficulties to international traders. While dealing with international markets, international political and legal environment needs a special attention.

Place Constraints (Diverse Geography):

Trade in foreign countries of far distance itself practically difficult. In case of perishable products, it is a real challenge. Exporting and importing products via sea route and making arrangements for effective selling involves more time as well risks. Segmenting and selecting international markets require the marketers to be more careful.

Variations in Exchange Rates:

Every nation has its currency that is to be exchanged with currencies of other nations. Currencies are traded every day and rates are subject to change. Indian Rupee, European Dollar, US Dollar, Japanese Yen, etc., are appreciated or discounted at national and international markets against other currencies. In case of extraordinary and unexpected moves (ups and downs) in currency/exchange rates between two courtiers create serious settlement problems.

Norms and Ethics Challenges:

Ethics refers to moral principles, standards, and norms of conduct governing individual and firm’s behaviour. They are deeply reflected in formal laws and regulations. In different parts of the world, different codes of conduct are specified that every international business player has to observe. However, globalization process has emphasized some common ethics worldwide. Corruption is another issue relating to business ethics.

Terrorism and Racism:

Terrorism is a global issue, a worldwide problem. People of the world are living under constant fear of terrorists attracts anywhere in the world. To trade internationally is not economically risky, but there is the threat to life. Racism also restricts international trade activities.

The apex body of the department is the Central Board of Direct Taxes (CBDT). CBDT functions as a division of the Ministry of Finance under the Department of Revenue. Its functions include formulation of policies, dealing with natters relating to levy and collection of direct taxes, and supervision of the functioning of the entire Income Tax Department. CBDT also proposes legislative changes in direct tax enactments and changes in rates and structure of taxation in tune with the policies of the Government.

The Board comprises of the Chairman and six Members. The Chairman is the co-ordinating head and each of the members has been assigned a specialized function. They are assisted by Joint Secretaries, Directors, Deputy Secretaries, Under Secretaries and ministerial staff for carrying out their day-to-day functions.

The Investigation Directorates and the Central Charges of the department, which are headed by the Directors General of Income Tax (Investigation) and the Chief Commissioners of Income Tax (Central), function under the supervisory umbrella of Member (Investigation) in the CBDT. The Chairman and other Members have been assigned territorial zones for the purpose of supervising and monitoring the work of field formations.

For the effective discharge of its functions, the CBDT is assisted by a number of attached offices known as Directorates. These directorates have been assigned specific functions like vigilance, inspection, judicial, recovery, maintenance of statistics, printing and publications, publicity, conducting of departmental examinations, imparting of training to officers and staff, etc. These functions are performed by the directorates at the all-India level.

The Chairman and members of the CBDT are selected from the Indian Revenue Service (IRS), whose members constitute the top management of the IT Department. The Chairman and every member of CBDT are responsible for exercising supervisory control over specialized functional categories at field offices of IT Department. Various functions and responsibilities of the CBDT are distributed amongst Chairman and six members, with only fundamental issues reserved for collective decision by the CBDT. The areas for collective decision by the CBDT include policy regarding discharge of statutory functions of the CBDT and of the Union Government under the various direct tax laws.

Taxation law is not only very complex as it requires specialized knowledge and expertise to implement, but also it necessitates various kinds of deterrent actions to ensure compliance by taxpayers.

• Assessment: Assessment is done to ensure correct estimation of total taxable income of an assessee (i.e. taxpayer) and it determines amount of tax to be payable by (or to be refunded to) assessee.
• Fines and Penalty: These are financial punishments for non-compliance with any specific provision of the Income-tax Act.
• Surveys: ITD can survey any business premises for physical verification of records and other valuables.
• Search and Seizure: ITD can search residential and business premises of any taxpayer to check records and valuables to ensure that no evasion of tax is taking place.
• Prosecution: Certain actions of taxpayers, for example wilful evasion of tax, are considered as criminal offence by the Income-tax Act and hence these offences result in prosecution.

Functions

• Administrative planning of the Income Tax Department.
• Act as advisor and conscience keeper of the Indian Revenue Service.
• Handle senior appointments.
• Represents the Finance Ministry at important tax-based conferences at UN and OECD.
• Transfers and postings of officers in the cadre of Chief Commissioner of Income-tax and Commissioner of Income-tax.
• Matters dealt with in the Foreign Tax and Tax Research Division, except matters under Section 80-O of the Income-tax Act, 1961.
• Ensure that the Cabinet decisions are implemented
• Advise the Finance Minister of India.
• All matters relating to Central and Regional Direct Taxes Advisory Committees and Consultative Committee of the Parliament.
• Public Grievances.
• Provide an element of continuity and stability to administration during crises.

CIT

• The existing role and functions of CIT(CO) had been defined with reference to erstwhile Regional Computer Centres (RCCs) and they were also acting as Nodal points for distribution of hardware etc. in the initial phases of Computerisation in the Department. Post consolidation of Regional Data Bases stabilized Taxnet and PDC, BCP & DR Sites becoming fully operational, redefining and recasting the role and functions of CIT (CO) had become imperative. Deliberations in the Directorate were ongoing to recast the same so as to align it in the new environment.
• Accordingly a Committee was constituted with DIT(S)-I, DIT(S)-II and DIT(5)-V as Members and CIT (CO), Kolkata as invitee. Report of the Committee deliberated on the Role and Functions of CIT( CO) in the new environment and also received inputs from field formations.
• Based on the report of the Committee, the Functions and Role of CIT(CO) were re-defined and recast so as to ensure, they were relevant and meaningful in the new environment. The same has since been approved by the Board.
• Revised role and functions of the CIT (CO) is annexed for kind information and necessary action.
• This issues with the approval of DGIT (Systems).

Assessing Officer

Tax returns that are either processed or unprocessed by CPC may need more detailed inquiry in order to be sure about the correctness of returned income and also to discover intentional/unintentional errors if any.

The process of in-depth interrogation of return of income is called ‘assessment’. An officer of the Income-tax Department who has been given this task of assessment is known as ‘Assessing Officer (AO)’. An Assessing Officer is an income tax officer who has the power to make an assessment of a taxpayer who is liable to tax under the Act.

The Assessing Officer appointed by the Central Board of Direct Tax to your return may vary depending on the size of your income/nature of your business (CBDT or Board).

Powers of assessing officer Under Section 131

The Income Tax Authorities (income tax officer / assessing officer) will have the same powers as are given to a court of law under the code of civil procedure 1908 (5 of 1908) when trying a suit in regards to the following matters –

• Discovery and inspection
• Requesting the attendance of any person, including any officer of a banking company, and examining him on oath
• Assembling the production of books of accounts and other documents
• Issuing commissions

The safety valve here is that any tax authority will not

• Take any books of accounts or other documents without recordings of his reasons for doing so.
• Keep in his custody any such books or documents for more than fifteen days (exclusive of holidays) without obtaining the approval of Chief Commissioner or Director General or Commissioner or Director.