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

State advantages and disadvantages of quota sampling, State advantages and ...

State advantages and disadvantages of Quota sampling These quotas are assigned in a way that there remains resemblance between quotas and populations with respect to characteri

General provisions regarding exports and imports, GENERAL PROVISIONS REGARD...

GENERAL PROVISIONS REGARDING EXPORTS AND IMPORTS : As you know that the policy aims at promoting the exports and liberalising the imports. Let us first study the general provisi

Non response error, Non Response Error: It is almost impossible to obtain d...

Non Response Error: It is almost impossible to obtain data from each and every respondent covered in the same. There are always some respondents who refuse to give any information.

Basic aspects of buying centre, The basic aspects to be noted about the buy...

The basic aspects to be noted about the buying centre are that: --The influences across the centre can differ from one product category to another. --The composition itself

Response hierarchy models, These models are examined giving attention to th...

These models are examined giving attention to their origin and implications and include: The Action desire interest attention (AIDA) Model The Hierarchy-of-Effects Model -

Risk as an importer, Risk as an Importer : The position is entirely oppo...

Risk as an Importer : The position is entirely opposite of what it is for the exporter. If the importer is billed in rupees, he does not stand to loss at all whether the foreign

Jobbers, total jobbers in India ?

total jobbers in India ?

Rephrasing the research problem, Rephrasing the Research Problem: Finally t...

Rephrasing the Research Problem: Finally the researcher must sit to rephrase the research problem into a working proposition. Once the nature of the problem has been clearly unders

Newspaper of your choice, Using marketing theory and concepts critically as...

Using marketing theory and concepts critically assess the marketing strategy of a newspaper of your choice. You should start with a general evaluation of their marketing strategy a

Objectives-export finance, OBJECTIVES After Studying this unit, you s...

OBJECTIVES After Studying this unit, you should be able to: 1. Describe the procedure of Pre-shipment Credit; 2. Explain various types and procedure of Post-shipment Cr

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