ASSIGNMENT

ON
EXPORT IMPORT MANAGEMENT Submitted To:

Shegufta Haseen chowdhury

AHSANULLAH UNIVERSITY OF SCIENCE & TECHNOLOGY SCHOOL OF BUSINESS

Submitted by: MD. HABIBUR RAHMAN ID: 05.01.02.003 4th year 2nd semester

Date of submission: 20th nov, 2008

TERMS OF TRADE OR TOT:

The terms of trade measures the rate of exchange of one good or service for another when two countries trade with each other. For international trade to be mutually beneficial for each country, the terms of trade must lay within the opportunity cost ratios for both countries. We calculate the terms of trade as an index number using the following formula: Terms of Trade Index ToT = 100 x Average export price index / Average import price index If export prices are rising faster than import prices, the terms of trade index will rise. This means that fewer exports have to be given up in exchange for a given volume of imports. If import prices rise faster than export prices, the terms of trade have deteriorated. A greater volume of exports has to be sold to finance a given amount of imported goods and services. The terms of trade fluctuate in line with changes in export and import prices. Clearly the exchange rate and the rate of inflation can both influence the direction of any change in the terms of trade.

what is the balance of payments?

The Balance of Payments records financial transactions between the UK and the international economy. The accounts are split into two sections with the current account measuring trade in goods and services and the capital account tracking capital flows in and out of the UK. This includes portfolio capital flows (e.g. share transactions and the buying and selling of Government debt) and direct capital flows arising from foreign direct investment Balance of Payments= Trade balance in goods+ Trade balance in services+ Net investment income+ Transfers= Current Account balance+ Capital Account Flows= Basic Balance of Payments
WHY THE BALANCE OF PAYMENTS MUST BALANCE

If a country is running a deficit on the current account then there must be a corresponding surplus in the capital account. This might be achieved by attracting direct foreign investment into the economy, or by the government running down official reserves of foreign currency. Another way of "financing" a balance of payments deficit on the current account is to attract short term banking flows into the financial system by offering an attractive rate of interest.

Market Share:
Market share can be defined as the percentage of all sales within a market that is held by one brand / product or company. Market share can be measured in several ways. However, the two most important measures are by: - Sales revenue - Sales volume (the number of units sold) Examples of market share Market share information on the UK clothing retail market is summarized below: Positio Brand Sales('m) Market Share n (%) 1 Marks & Spencer 2,743 10.2 2 Next 1,708 6.3 3 Arcadia 1,609 5.9 4 Debenhams 1,076 4.0 5 Asda 963 3.6 6 Matalan 776 2.9 7 Tesco 710 2.6 8 Bhs 631 2.3 9 New Look 552 2.1 10 John Lewis 482 1.8 Total of Top 10 11,250 41.8 UK Market 26,911 100.0 Source; Deutsche Bank 2002 Number of Outlets 315 333 1,603 97 215 137 588 163 573 25

Target Market:
Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small businesss success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities. So if, for instance, I open a catering business offering catering services in the clients home, instead of advertising with a newspaper insert that goes out to

everyone, I could target my market with a direct mail campaign that went only to particular residents. While market segmentation can be done in many ways, depending on how you want to slice up the pie, three of the most common types are:

Geographic segmentation based on location such as home addresses; Demographic segmentation based on measurable statistics, such as age or income; Psychographic segmentation based on lifestyle preferences, such as being urban dwellers or pet lovers.

GDP:
The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. GDP = C + G + I + NX where: "C" is equal to all private consumption, or consumer spending, in a nation's economy "G" is the sum of government spending "I" is the sum of all the country's businesses spending on capital "NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)

GNP:
GNP (GNP), term in economics used to describe in monetary value the total annual flow of goods and services in the economy of a nation. The GNP is normally measured by totaling all personal spending, all government spending, and all investment spending by a nation's industry both domestically and all over the world. Most industrialized countries now use the gross domestic product (GDP), which takes account of money earned from or by foreign economies, as their chief economic indicator. The GNP measures the value of all goods and services produced within a nation's borders regardless of the nationality of the producer. GNP can also be calculated by the income approach to national accounting, in which all forms of wages and income are added together, such as corporate profits, net interest returns, rent, indirect business taxation, and unincorporated income. Both methods produce the same result. From basic GNP and GDP totals, various other figures are derived that, in turn, describe different aspects of a nation's economy.

Dumping:
Dumping is an informal name for the practice of selling a product in a foreign country for less than either (a) the price in the domestic country, or (b) the cost of making the product. It is illegal in some countries to dump certain products into them, because they want to protect their own industries from such competition.

Tariff:
A tariff is a tax imposed on goods when they are moved across a political boundary. They are usually associated with protectionism, the economic policy of restraining trade between nations. For political reasons, tariffs are usually imposed on imported goods, although they may also be imposed on exported goods. The five main types of tariffs include revenue, ad valorem, specific, prohibitive and protective.

A revenue tariff increases government funds. For example, countries that do not grow bananas may create a tariff on importing bananas. The government would then make money from businesses that import bananas. An ad valorem tariff means that the tariff applies to a percentage of the import's value such as a set number of cents on every dollar of value. A specific tariff, on the other hand, means that the tariff is not concerned with the estimated value of the imported goods, but rather is based on specific amount of the goods. A specific tariff may apply to the number of goods imported or to the weight, volume or other measurement of the goods. A prohibitive tariff is one that is such as high cost that it keeps the item from being imported. A protective tariff is used to raise the price of imported goods as a protective measure against the competition from foreign markets. A higher tariff allows a local company to compete with foreign competition.

Exchange Control:
Restrictions on currency flows between countries, imposed by central banks or monetary authorities. A country may: (1) Prohibit residents from owning a bank account denominated in another currency or an account in a foreign bank; (2) Prohibit exporters from drawing against a bank account except for internal transfers; and (3) Limit bank trading in a domestic currency to discourage currency speculation.

Quota:
An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. For example, a country might limit sugar imports to 50 tons per year. Quotas, like other trade restrictions, are used to benefit the producers of a good in a domestic economy at the expense of all consumers of the good in that economy.