Inadequate export marketing of products
Name(s):
Inadequate export promotion of small industry products
Undeveloped export promotional material
Nature
Effective exploration and exploitation of export opportunities requires certain supporting national organizations to carry out export promotion services on a continuing basis. Without these, a concerted and sustained national export promotion effort is not possible. In addition to the government level, the task of export promotion is requisite authority and responsibility for coordinating the formulation and supervision during the implementation phase of a cohesive national programme for export promotion. In most countries, there exist, long before import substitution is completed, numerous smallscale industries and handicrafts producing goods many of which, if certain conditions were fulfilled, could be directed towards the export market. Yet, with a few exceptions, even the countries having reached relatively advanced stages of industrialization are paying little attention to the export promotion of these goods.
The weaknesses and handicaps of small-scale industries and handicrafts create even greater obstacles to the export of their products than to their sale on the home market. The difficulties of producing, packaging, shipping and selling goods of a type, style, grade, quality and price fulfilling demand requirements and trade conditions in a variety of foreign countries, especially in the advanced ones, are indeed formidable for individual small entrepreneurs frequently unable to meet satisfactorily less exacting conditions in their own markets. In the absence of arrangements between small producers and specialized servicing institutions, these problems are usually solved - as far as the small entrepreneur is concerned - in a wasteful and uneconomic way by wholesalers, middlemen and export traders who provide them with materials and finance, give them some guidance on products and processes, and secure an outlet for their output.
Background
By conveying information to consumers, distributors and processors, and by speeding up adjustment to technological or economic change, market promotion reduces imperfections in market operations. It has a important role in the competitive process, increases consumer satisfaction and - by expanding demand- results in higher prices and/or a larger volume of sales for producers. Unlike "brand" promotion, which is aimed at expanding a given producer's share of the existing market, "generic" promotion is aimed at expanding the size of the market and so must be financed internationally. Existing international financial institutions, however, have not filled this role: very little has been done in terms of horizontal diversification to address the problem of commodities in global oversupply, no generic market promotion programmes have been financed, and generic research and development efforts have deliberately been concentrated on food crops. International financial institutions and individual developing countries are geared to looking at projects in a country rather than global commodity context. Besides, the financial institutes have been unable to lend to commodity organizations. Although in a few cases producers' associations have been able to carry out generic research and development and market promotion, in most cases financial resources and the necessary organizational structure has been lacking.
Incidence
[Developing countries] In fact, most small-scale industries and handicrafts in the developing countries turn out products of a type, quality and price which do not meet satisfactorily the requirements of the domestic market, let alone those of consumers in the advanced countries. In the less developed countries, the frequently noted preference for the imported product as against the corresponding domestic one, is more often than not due to appreciable shortcomings of the latter. These shortcomings are due to the well-known weaknesses of small-scale industries and handicrafts - lack of technological and managerial knowledge, inadequate skill of labour, primitive or antiquated equipment, unsatisfactory premises and working conditions, use of poor raw materials, lack of information on markets - which tend to perpetuate themselves for lack of financial resources and inadequacy or non-existence of assistance, servicing, training and financing facilities.
Claim
If the developing countries are to secure the foreign exchange they need, and achieve fuller employment, they must substantially increase their manufactured exports. It is here that world demand grows most rapidly. And there is a variety of products which these countries can produce at competitive cost; products that generally have either a high labour content, or that utilize domestic materials. Growth in exports of manufactured goods from the developing countries has already been rapid. They started, however, from such a small base that the share of the manufactured exports of the a small base that the share of the manufactured exports of the developing countries remains less than 20% of the manufactured imports of the developed nations, and one-third of one percent of their GNP.
Aggravates
Aggravated by
Type
(E) Emanations of other problems