Risk as an exporter, Marketing Research

Assignment Help:

Risk as an Exporter : you may draw your export bills either in rupees or in foreign currencies. If you have drawn your export bills in Indian currency i.e., rupees, you will not suffer any loss by any ask able depreciation of foreign currencies or of Indian rupees. You are sure to receive the Indian rupees for which you have invoiced your goods. But it may not always be possible for you to invoice your goods in rupees. Firstly, the foreign importer may insist that he be billed in his local currency. That will make the cost of goods imported by him certain in his own currency.

Again, it is a matter of courtesy to the exporter to bill the importer in the currency of importer's choice. It is a good marketing strategy also. Moreover, the Government of India has now directed that exporters bill their importers in foreign currency only.

If you have billed your importer in a foreign currency, there is an equal possibility that the foreign currency may appreciate or depreciate by the time you are likely to receive payment. As a result, you may receive more or less in terms of rupees than you bargained for. Let us understand this by means of an example. Suppose you export goods worth US$10,000 on January 1, when the value of $1 is Rs.35. You thus, expect a payment of s.3,50,000. But the payment is due to be received by you on May 1. Suppose the value of the dollar decreases to Rs.34 on the day. You will now receive only Rs.3,40,000. The fact that Indian exporters operate on a very low margin, may mean that whatever profit he expected may be wiped out due to a decline in the value of the dollar. But if the value of the dollar increases to Rs.36, the exporter will get Rs.3,60,000 and may earn a profit that he never expected. Thus while there is a possibility of the exporter making a windfall profit, there is a definite risk lo which the exporter is exposed. The larger the depreciation of the foreign currency, the larger is the risk to which the exporter is exposed.

 


Related Discussions:- Risk as an exporter

Internal and external criterai of research problem, AskWhat are the interna...

AskWhat are the internal and external criteria of selecting a research problem?

Discuss the steps in creating a customer service strategy, Problem: A m...

Problem: A major differentiating factor for companies is the quality of Customer Service. (i) Give the reasons which justify the inclusion of Customer Service as an e

Institutional framework , INSTITUTIONAL FRAMEWORK : Institutional framewor...

INSTITUTIONAL FRAMEWORK : Institutional framework for providing finance comprises Reserve Bank of India, Commercial Banks, Export Import Bank of India and Export Credit and Guaran

Attitude change strategies - consumer behaviour, Attitude Change Strategies...

Attitude Change Strategies . Changing attitudes is in general very difficult particularly when consumers suspect that the marketer has a self-serving agenda in bringing about thi

Interviewer bias, This error occurs on account of interview influence in co...

This error occurs on account of interview influence in conducting an interview or wrong recording by him. By putting emphasis on a certain word or phrase in a questionnaire intervi

Name five types of general insurance, ? OVERSEAS INSURANCE ? LIVE STOCK ...

? OVERSEAS INSURANCE ? LIVE STOCK INSURANCE ? GLASS INSURANCE ? FIDELITY INSURANCE ? KEY MAN INSURANCE

Explain the marketer role, Q. Explain the Marketer role? _ Marketers t...

Q. Explain the Marketer role? _ Marketers try to create products as well as services that will provide the desired benefits that permit the consumer to reduce the tension.

Explain quantitative and qualitative research techniques, What is the major...

What is the major difference between quantitative and qualitative research techniques? One of the key aims of qualitative research is to gain preliminary insights into decisio

Explain search stage in organisational buying, Q. Explain Search stage in o...

Q. Explain Search stage in organisational buying? Search stage: This stage comprises information search regarding vendors their credibility their compatibility with the requi

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd