Globalization has took its place on market industry, all product had just got the impact. And as the result firms usually start marketing their products in their own country, the domestic market. Once established as a known brand and accepted supplier of goods they need to diversify their markets and the first step in that direction is exports to another country. Excess production, which cannot find market in the country of origin, is the starting point of exports. Later on firms do take up special production of goods for exports.

Some others build an export bank (inventory) to avoid any clash with the demands of domestic market. Firms have to realize that the product, which is considered as giving value for money and fulfilling customer’s needs must do the same in overseas market. Once the firm wants to get established in the export market, it has to understand the business environment of the foreign country. The four Ps of host country Product, Price, Placement and Promotion may not have the same relevance outside.

In prehistoric times, the city-states traded through barter system. One state had one product while the other had some other product and they both needed the product, which the other had. The same type of advantage in tradable product in one country over the other works well even today, except the scene is much more complex with several countries, myriads of products having global access.

In India exports are firm’s imperatives due to following reasons:
• Partial convertibility of rupee, which gives foreign exchanging
to exporters they need for their imports for production
• Need to achieve economies of scale of production for lowering
costs and making prices competitive for exports too.
• With MNCs getting a foothold in India, firms need to have
greater markets, which India cannot provide.
• Intangible benefits are, bettering of product quality,
improvements in communication systems.
• Upgradation of technology.
• Cost reduction due to large scale manufacture.
• Utilization of human resources like in IT sector where India
has a large workforce.
• Internationalization of Indian brands.
Let us discuss the negative factors of going for exports, which are
as follows:
• Low image of the country as a supplier of quality goods. This
is gradually changing.
• Firm’s culture, which does not give the required fillip to exports.
• Inexperience of international business and the fear of the unknown
• Cultural differences in nations.
• Entry barriers in some countries, their governmental controls
and in some cases like the USA, quota system for exporting to
that country (e.g. textiles imports in to the USA).
There are some common factors as given below:
• Balance of payment between trading nations
• Stability of their currency
• Transportation costs
• Infrastructure status
• Quality control plans in each country and how these manifest
in international trade
• Trading blocks like Euro, NAFTA, ASEAN
• WTO the world body that regulates international trade and
settles trade disputes.
• Political instability in some regions
• Economic upheavals of the far east, Japan