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Chapter V   

International Marketing-mix

Market Characteristics of  Germany and the EU

Today,  Europe particularly Germany has a well established crafts and handicrafts  industry which include not only a large number of artisans operating as  manufacturers and traders but allied establishments that provide various services to the growth of the handicraft industry.   The foregoing  findings and practices  will give us a picture on  the EU market for handicrafts.

Consumer Taste and Fashion

• Fashion in the European sense is  very short-term since it has four seasons.  It is hard to tell who dictates or defines what is �in� or  what is �out�.  However, because Fashion is greatly publicized in TV, Magazines, Radio and other Multi-media forms, it tremendously influenced the buying public.
• Europeans are known to be very meticulous, they carefully investigate product quality and believes that if the product is inferior, it will not sell.
• Large number of consumers  prefer  novel and unique articles which are classified as high end.   These articles are successfully marketed as �limited edition� like the H�mmel/Goebel,  Sw�rovski Crystal Collection, WMF ( cutlery) or the so called � numbered edition�.
• Some companies also market their products as � series� or � collection� which are build around themes such as Asian Collection, Miniature World, Fantasy, Dream Palace and so on.  Remember that items in a collection can come from different suppliers in the different parts of the world.
• Big percentage of the handcrafted souvenirs supply the needs and requirements of the 600 million tourist in Germany (1998), a substantial figure as an export opportunities for  the handicraft sector.
• Tourists purchase souvenirs as a momento of a visit and are therefore a representative of a country or a region and its culture.  It should be noted that visiting German-tourists while on holiday may have little or no appeal to German or British consumers in their own country.  Instead, a local one or with cultural heritage is usually preferred  and bought for a particular purpose.

Semi-.finished or processed Crafts and Allied Products

• A number of market studies indicated that  market for Semi-processed and Semi-finished handicrafts may only have a limited market opportunity in the sophisticated German, British and the EU market as a whole due to the following reasons:
  1. customer preference for products made by their national craftsmen and artisans
  2. product design being unsuitable for the sophisticated market requirements
  3. cost of appropriate retail packaging and/or freight costs of articles in consumer packs is too high and seriously affects its competitiveness
  4. consumer packaging and labelling being unsuitable for the highly competitive domestic market
  5. tariff and non-tariff barriers that are obstacles to the import of finished articles from developing countries.

• Though there is also a significant market in Germany and Great Britain  for some particular semi-finished or processed handicraft such as  walking stick handles which are used to finish-off walking sticks made of local wood, fashion accessories ( bead, buttons, lace, etc. ) used for trimmings and/or finishing garments, curtain and cushion trimmings, metal furniture accessories like handles, locks, wigs for dolls made of human hair, items for making and/or restoring dolls, doll house components and accessories and other item components.
• There is also a  considerable demand for  material components, tools and equipment for those who produce handcrafted articles in Germany.

Industrial and Other End-users of Handicraft Items

• The significant volume of Handicraft items needed  by   the Building and  Decorating Architects are supplied by contractors and  wholesalers.  Mostly these items are used in furnishing prestigious public and commercial buildings, display areas, hotels, convention centers and the like, another area an exporter can look into.

Environment Concerns

• Western European consumers  are becoming much more conscious about the environment.  Recycled or re-usable items are the �in� for these customers. Example are gift items such baskets, christmas decors made from discarded papers, canisters,  etc.  Products such as trays, dishes and basket bowls are decorated with shells, fruits and other  nature themes.  Fashion Jewelry like earing and bracelets are made out of  coiled copper wire, old glass beads or stones.  Another sample are the armchairs which are covered in seagrass,  benches and garden sets which are made of discarded tree branches.
• For gift cards and Corporate Give-Aways,  a  sizeable  number of Europeans run for  items made out  handmade paper  and accessorized by tin cans, images torn from magazines, dried leaves and other waste which can be salvaged.
• To ensure that the buyer is aware that these articles satisfy environmental criteria, it is essential that they are marketed with suitable �eco-label�.  It is mandatory  in all the  members of EU that products must be properly  packaged and should conform to the  environment laws  set.  In Germany,  the �Gr�ne Punkt�  label in a product indicates that it conforms to the standard set.

5.1       The Handicraft Products

Considering that handicraft articles are non-essential products, we have to bear in mind that customer satisfaction plays a major role in  marketing these goods.  Knowing the volatility of the market will considerably give us an idea on how to  penetrate the EU market.  The customers� perception of quality or the so-called Taste vary from one group to another and according to the product range. Handicraft exporters to the European market, should therefore learn the European qualitative standards to be used as a tool in making an edge over and above the competitors.

5.1.1  Quality Standards

Stated hereunder are some important peculiarities on the European Quality Standards on some sectors of  handicrafts.  These are just few of them and it is therefore recommended to know other factors.

Metal and Stone Crafts

The Germans are known to be the best craftsmen  in these field.  They produced virtually unlimited  range of stainless steel  and made of alloy articles.  They have the advantage of modern technology in producing the most intricate designs.  Crafting of candle sticks, cutlery, toys, jewelry and sculptors are their forte. Germans, like many other Europeans, adorn their home with these products to make their environment  in accord with the past. Well-known manufacturers are the Solingen, WMF, Villeroy and Boch and many others. 

Fashion Jewelry

One should always bear in mind  that the usage of nickel as a raw material is totally unsuitable for European customers because high percentage of  them are allergic to nickel and react with skin rashes.

Baskets

Europeans would not use or carry shopping baskets without handle since they are not carried on the head like what the African women are doing.

Pottery and Ceramics

Primarily, the imported pottery are used as decorative items.  Europeans put great emphasis on smoothness, fineness and non-fading colours and prefer waterproof  vases for purposes of flower arrangements.  Preference to the folk art has retained its vitality and demand for these ceramic products are high, especially the bluish-grey salt-glazed pottery of the Westerwald.

Wooden Sculptures and Toys

Similarly, these products are preferred when surfaces are smooth, refined and polished.  Avoid material of strong and unpleasant odour for finishing like paints and varnishes.  As for wooden toys, the present trend is on bright and colourful components and at the same time have natural wood finish.  Wooden toys in traditional, stylized designs and comparatively large quantities are popular and preferred by the B and C market while the intricately designed toys which are available only in specialty shops catered to the higher income groups.

Leather items, textiles and tapestry

Although European customers  like these products that have been  produced in exotic countries, however they require quality standard similar to the one of machine-made.  Special attention must be given as to  practicality, colour-fastness, knot-stability and other  usability characteristics.

5.1.2  Design,  Packaging and Presentation  - Continuous Product Development

Design and Packaging play a very important  role in marketing the handcraft products for the reason that these articles are primarily used as decorative items next only to usability.  Not only the packaging  material  be attractive but it must be  eco-friendly.  Likewise, the packaging would need to  be designed to minimise the chances of breakage or damage during the shipment and handling.  In order to adopt to the European  demand requirements, here are  some of the do�s to be considered that need careful examination:

�         variation in product type: as to size, colour, shape, ranges, etc.(find out what the customers want, useless effort and money to produce articles which no one wants to buy)
�         consistency in quality and quantity of products
�         accept orders base on the company�s production  capacity
�         attractive packaging  along with a brief description in relation to its origin and cultural significance ( if there is)  as well the craftsmen who manufactured it.

The challenge, thus for the Exporters is how to project a Product-Plus Image. That means making the product more attractive for the consumers as well as to the trader in the distribution chain, thus it is a must to find out what the customers want.

Guidelines/Types  for  Handicrafts packaging

           Handicrafts are classified according to their need for Moisture Protection

�         Handicrafts requiring moisture-proof packaging, in some cases also physical protection are the Metal, Textile, Leather, Wooden, Paper and Glass products.
�         Products Requiring packaging for physical protection only are Ceramics, Lacquer ware, shell and stone products.    

Packaging Functions and Materials 

The table here shows the recommended packaging  techniques for handicrafts as practice in Europe.

Source:  ITC - Geneva

               Legend:

DPE   .- High Density  Polythylene

LDPE  -  Low.density polythylene
OPP    -  Oriented polyythylene
PE       -  Polythylene
PS       -  Polystyrene
PVC   -  Polyvinyl chloride

5.1.3   Environment Laws and the Washington Accord 

We are now in the time that the world is more and more concerned with the impact of the economic activities on nature and environment. The world believes that the living standards can only be kept by learning to live with and not against nature, and that the planet only offers limited resources.  Hence, more and more legislation for preventing the environment has been introduced in recent years.  Stringent regulations are strictly implemented concerning pollution of the air and water. Directives against the extinction of rare plant and animal species are promulgated.  Developed countries like Europe totally adhere and restrict or ban  trade of a particular kind of plants, animals and including material parts thereof that violates these law.

Detailed information on  the restricted  goods are outlined in the Handbook  called WASHINGTON ACCORD  or CITES Law  ( address in Appendix),  where one can find the comprehensive list of the  endangered species which is frequently updated by the European Union and is then implemented in the national legislation of the member countries.

In order to be accurate on the kind of products that are banned or not, it is recommended to refer to Inquiries Section or the CITES law or the EU office in the  respective countries of origin.  Addresses are included in the appendix.

5.1.3.1   Measures, Standards, Regulations and Laws

Just like in other parts of the world,  a great deal of bureaucracy is in store for Exporters dealing with the European customers.  Legal requirements, International Foreign Trade regulations which are very important for participation in international consumer or trade fairs are a must to know.

Weights and Measures

Except for Great Britain and Ireland, Metric system is used to describe weights and measures in all the European nations.  Listed below are the commonly used measurements in the handicraft trade:

Continental Europe                          UK & Ireland

Weight
1 kilogram(kg) = 1,000 grams               1 pound (lb)  =  16 ounces                 

                                                           (oz) = 0.4536 kilograms

Length
1 meter (m) =1,000 centimeters (cm)     1 yard (y) = 3 feet (ft) =

             =1,000,000 millimeters (mm)               36 inches = 0.9144 meters

Liquid Measure ( measuring vases, pots size)
1 liter (l) = 1,000 milliliters (ml)  1 gallon (gl)= 4 quarts (qt)=

                                                                       8 pints (pts)= 4.5461 liters

Standards

Western Europe has established a set of product quality standards which should be adhered by law. 

Hereunder are some samples:

�         Legislation on Toys: must comply with stringent health and safety standards:  non-toxic articles, should not have sharp edges, must conform to a certain size so that the object cannot be swallowed.
�         Legislation on maximum content of lead, cadmium in ceramics, thus ceramic items must be accompanied by an official laboratory certificates.

Another standard; called  Quality Standard Certificates ( ex. ISO) are not legally enforceable, however distributors and consumers will not buy products without the standard certificates.  The European Union is currently in the process of amalgamating national standards of the individual member countries into one set of European Standards, so it is advise to be always abreast with new directives.

5.1.3.2   International Trade Agreements

Exporting to Europe is entirely a different matter compared to Japan or the USA.  Hence,  knowing relevant information on the Western Europe Union bureaucratic environment and its laws will certainly be a plus factor  for handicraft exporters, and it is a challenge definitely worth  attempting.

World Trade Organisation  (WTO) formerly  (GATT)
as applied by the European Union

At present, the WTO/GATT  main objective is the regulation of world trade by reducing tariffs and creating a transparent trade environment.  It works on non-discriminatory basis which means that tariff concessions granted to one member country must automatically be granted to all other WTO member countries.  It also expects granting of concessions to be reciprocal, meaning that a granting country can expect some concession in return.  The reason why many developing countries joined WTO/GATT in recent years was that they were often exempted from these two principles.

Developing countries are granted preferential tariffs which are laid down in specialised documents, called the General System of Preferences (GSP).

                          GSP ( General System of Preference )

Within the framework of International Aid, all major industrialised countries agreed to encourage imports from developing countries by granting duty exemptions, thus enabling purchasers to buy products duty-free. As applied by the EU, almost all industrial and hand-made products from developing countries may enter the  EU member states duty-free,  however subject to certain quantity limitations ( tariff quotas).  In general, all handicraft items in the Asia-Caribbean-Pacific ( ACP �list in appendix) states can therefore export to EU member states duty-free on two (2) conditions:

1.       Certificate of Origin ( Form A) countersigned by the concerned authority in the origin country ( Department of Trade and Industry) is produced to customs authorities, confirming that the handicraft items has been primarily produced in the home country.
2.       The quantitative limit has not yet been used up by other exporters; all exports to the EU above the GSP limit are subject to customs duty.  Exceptions to the rule are exporters from one of the 47 countries with Least Developed Country (LDC) status  who are not subject to customs duty, even when the tariff quota had been exceeded.

There is always constant change on GSP schemes, so it is advisable to obtain the latest information on beneficiary countries, such as the excluded products, etc.  in the home country ITC Advisory service, or in Geneva at the European Union Infoline  ( see appendix).

Multi-Fibre Agreement

A major exclusion to  WTO/GATT are the provisions of the Multi-Fibre Agreement.  Textiles and Clothing are widely regarded  to be very sensitive national issue, which means that textile trade regulations under MFA are very stringent and do not constitute free trade altogether.  This is not regulated by imposition of tariffs, but is limited according to bilaterally negotiated import quotas above which no more trade may  take place.

A word of cushion  for handicraft items made out of textile or with fabric (examples: wall hangings, carpets, Fashion accessories made of  fabric, etc.), these are subject to MFA, thus will be subject to stringent export formalities and possible prohibition of further exports. It is again recommended to gather detailed information from relevant sources such as the EU Commission or at the ITC Advisory Center.

European Union Trade Agreement � The Lome Convention

The dissatisfaction  on some of the provision  of GSP  for International Aid,  and in order to encourage imports from currently 70 African-Carrbean-Pacific (ACP),  the European Community designed a comprehensive and easy to use trade preference system.  In return, the ACP countries also offer some concessions to EU member states in return. 

For handicraft products, this sector are entirely covered by the Lome Convention and does not have quantitative limits.  The only precondition for enjoying these trade concession is the procurement of an EUR1 Certificate of Origin which must be countersigned by the appropriate authority in  the country of origin ( Department of Trade and Industry).  This document serve as proof that products genuinely originate in developing countries and were not re-exported.

           5.2   Proper Pricing

One of the most important issues that must be considered in successful marketing is setting the  right price for  the products.  Careful planning on all the factors involved in the production.  One must always remember that PRICE is one of the major point of differentiation between the Exporter and the competitors� products that significantly influence the sales VOLUME. 

Here are some tips and practices  on how to properly price products entering Europe:

5.2.1     Price and Product Value Differentiation

The price is influenced by various external factors, some  of which are explained here:

Quality 

Generally speaking, Europeans are prepared to pay a higher price for products which they perceive to be of superior quality; the perception of quality in turn relates to both the core products and the product exterior, meaning the packaging as discussed earlier.

Promotion

In the field of  handicrafts where the actual usefulness of  a product is small in comparison with its decorative value.  Employing promotional measures will stress this distinction  ( ex. professional photographs in product catalogues, etc.).  This will increase the perception of value, and thus increase the achievable market price.

5.2.2     Distribution  Pricing

Although in reality,   price should closely relate to the demand structure of a certain product, calculation of the price must always start from the  BASIC:  cost of production or purchasing costs.  The basic pricing system will be discussed briefly: The concept of cost, margin, price and profit.

5.2.2.2  Costs

These includes all the costs in production and trade which were incurred within a certain period of time and which are directly related to the procurement of raw materials, production, administration and distribution of goods,  termed as Direct costs.  Other costs which are not directly incurred to the products is called Indirect costs or overheads.  These must be added to the total quantity of units produced to arrive at the allocated overheads per unit.    The direct and  overhead costs  per unit or called the unit cost of production must be lower than the selling price.

Another  very important  factor  to be considered in pricing is the UNIT PROFIT or UNIT MARGIN-  for profit allocation, this is a certain percentage which is to be added  in the unit cost of production in order to arrive at the Selling Price per Unit.  The price, therefore is accounted for by the sum of unit cost of production and profit margin.  The price times the sales volume of a certain product is called revenue.  All the revenue should then be used to pay off all the expenses that comprise the total cost of production.  The amount left (  Revenue minus costs) is called PROFIT in which  a part of  it can be used to re-invest for new machinery, expansion , etc.

5.2.2.2  Different  Bases for Quotation

Another important point to consider is the concept of CHAIN OF DISTRIBUTION.  In Europe, there are more links of chain of distributor in between:  it can be an importer, agent, wholesaler, large retailer or sometime a small retailer working in one or more European markets.  

Knowing the different distribution methods being adopted in Europe is  an edge.

                        FOB  (Free On Board )

This is the most commonly used price denominator in foreign trade.  Quoting FOB price encompass all charges arising in the country of origin, but does not include any shipment charges, insurance, distribution  in the country and other  costs.  Here, the exporter will benefit more from quoting FOB since all costs included in the price calculation are under  his control ( ex. overseas shipment, insurance, etc.), all costs which are to be incurred after departure from  the port of origin are to be borne by the importer.

CFR ( Cost and Freight) and CIF ( Cost, Insurance and Freight)

Some buyers prefer that the exporter assume responsibility for all shipment charges to shipping companies/exporter and do not undertake other costs such insurance for the  duration of shipment up to the port of entry of destination.  This method is termed as CFR  ( without insurance) or CIF ( with insurance).    Most of  the bulk of potential customers in Western Europe will require quotation on the basis of FOB or CIF prices, simply because they want to ascertain the charges or expenses incurred arising from the transportation of goods from warehouse to airport/port, special packing, customs formalities, export taxes, port handling charges, freight, insurance, etc.  In rare cases, Buyers also ask to be quoted in DDP ( Delivered Duty Paid), representing the final price they have to pay without any other charges involved. 

It is discourage to price DDP, unless one knows the different charges involved.  hence, it is advisable to keep in constant contact with  carriers, haulage companies, customs officials etc. in order to obtain the latest information on rates, charges, duties, taxes and other expenses that are included in pricing CFR; CIF or DDP.

            5.2.3    Surcharges and Running Costs of a Business in Europe

                         The Concept of Additional Net Product 

For any distribution link, it is but normal that all the costs incurred in the  selling of  a certain product will be added in order to obtain the desired profit margin.  The longer the distribution chain in the European country of destination, the higher the increase in price, owing to the generally high cost level.  These includes  up to the  retailers , the final distribution chain, who also allocated a certain profit margin.  As a rule, the European purchasers use the Consumer Selling Price = 4 x FOB.  This is usually practice during Trade Fair conversation wherein Professional Buyers employ this rule in order to save time.  The wholesalers and importers  can easily determine whether the price is good when they know the FOB price.

This rule of thumb is used as a rough guide, eliminate all quotations which seems to be way out of the usual.  Below are some calculations that can be adopted by the wholesalers of handicrafts when discussing price with a customers:

Cost of Production and producer�s profit margin
+  30-50% handling cost, inland transportation, etc.

FOB
+ 15% Shipment charges

CFR
+ 5% insurance

CIF
+100% wholesale costs +profit margin

Wholesale Price
+ 150%-200% retailers� costs and profit margin

consumer selling price

This is just an example ( for fashion accessories), so carefully examine costs arising from trading in order to answer inquiries from customers.

                5.2.4    Price Acceptability

Customers generally do not care about the cost situation of a certain product, what they are after is for their own benefit, willing to buy the best value of their money.  The right approach therefore to pricing is to carry out the right costing of the product but with subsequent adjustment to the market situation

As an Exporter, the main interest is to obtain big orders, because costs for the distribution procedures are basically the same regardless of quantity of consignment involve.  It is therefore profitable to despatch large quantities to one or two importers than to a 100 buyers with  more or less the  same total volume of orders. To encourage customers to foster their interests,  the best method  to be used is the Graduated Pricing.  To avoid incurring more costs for one single order  than can be covered by resulting revenue,  a MINIMUM ORDER  quantity scheme can be adopted. Setting a minimum order could at times put off small   time buyers but this scheme would also ensure better profit margin for the company.

European buyers are used to graduated pricing and expect the exporters to negotiate a reduction in unit price to a large quantity orders.  To be prepared  when asked, one should  know or adopt a formalised system of gradual price adaptation.  The best method is to find out the most commonly ordered quantity (ex. minimum order is 100 pcs).  Hereunder is an illustration:

Order Quantity                              Quoted Unit Price ( Product A)
less than 100                                  no quotation
100 - 999                                       standard price, ex.  DM 16.50 per unit
1000 - 4999                                   standard price less 5%, ex DM 15.68
5000 - 9999                                   standard price less 8%, ex DM 15.18

  Correct and competitive pricing is the key to be successful in foreign trade.

     5.3  Sales and Sales Promotion

Conveying the company image and keeping customer contacts are essential  for the handicraft business.  Establishing medium and long term trading links need  an application of appropriate method in order to succeed  in the highly competitive global market.  Customers good perception not only on the product but also on the company as a whole is already an edge over other competitors.   It must be noted, especially in foreign trade that direct contacts is very seldom, hence it is a must that the exporter must ensure that all forms and means of contact to the buyer must speak of success.  Trade contacts through written documents in any form like telephone calls must be well taken cared off  since this  will pave the way  for establishing special bonding with  customers. 

            5.3.1     Promotional Catalogues

Listed below are successful measures in gaining the loyalty of buyers:

Promotional  Activities

There are 3 ways to present a product to a potential foreign customers:   distribution of catalogues,  trade fair display,  and distribution of samples.

Catalogues

Since production of catalogues entail  costs, hereunder are some do�s and don�ts in the catalogue design  to be effective.

1.       Should contain  brief  description such as concise product description, raw materials used, country of origin, size, diameter, length ( if applicable) in cm and reference number.
2.       Always produce catalogues with professional photographs, since the photos would compensate for the actual product. Every product  should be photographed from its most important angle. ( e.g. inside of a basket is more important than inside of the base)
3.       Allocate a unique reference number to every product for easy reference  by the manufacturer and the buyer as well.
4.       Should contain a title page to draw the interest of  a target group and save time for them.   If possible, always indicate the Company logo,  address, fax, phone, email.
5.       Include a brief editorial about the  company to describe it to new or potential customers.
6.       Do not include other items not belonging to the sector.  It will  turn-off customer whose interest is focus on handicraft.
7.       If possible, produce catalogue that will cater to the European  taste, trend and fashion.   Watch seasonal differences in the pattern of  demand.
8.       Only include articles which  you consider to achieve high sales volume and which  the manufacturer  is certain to have the capacity to produce.
9.       In order to communicate all information to European buyers, it is best to produce a catalogue in 2 or 3 languages:  English, French or  German languages, especially if  there is a similar demand in several  European countries.
10.   Do not overload the catalogue; it is easier to acknowledge the products if only a few are displayed on the page.  Do not exaggerate its size, especially if they  are use as an order document.
11.   It is best not to include the prices in the description of  product or in the product catalogue, since it vary according to cost structures, demand and competition.  It is better to use a separate price list as an addendum to the actual catalogue, saves money.
12.   It is better to produce a catalogue in folder form with loose sheets, this can be replaced and supplemented later, thus saves money and the content can be changed according to the need of the customer.

5.3.2     Price list and Quotation

As mentioned earlier,  a separate comprehensive price list  should be distributed together with the catalogue.  Remember to stick to the price stated in the price list received by the buyer.  In all cases, an importer when face with a price rise has all the right to cancel his order.

Included in here are elements that should be included in a price list:

�         Heading with company logo, name, address and catalogue title
�         Date of production and date of price list
�         Reference number
�         Product Description
�         Unit price

The unit price must be quoted according to the graduated pricing system as discussed earlier.  Due to strong currency fluctuation of developing countries like the Philippines and India, it is generally safer to quote prices either in Euro or US Dollars.  There are two reason why quotation in foreign currency is better.  The burden on the risk of domestic currency and for the customers not to obtain little-used types of currency.  Also include the minimum order  acceptable and whether  quoting in  ex-works, FOB, etc.

5.3.3     Order Sheets

A standardise order documents to be used by the buyer is suggested  for easy processing.  Here are some of the most important content of an order sheet:

�         Appropriate heading
�         Reference Number
�         Product description to avoid mistakes from the buyer�s side
�         Order quantity
�         Total
�         Grand Total
�         Account Number
�         Branch Code and Bank
�         At the back:  indicate the Terms  of Payment and conditions

5.3.4     Business Cards and Letter  Head

It is necessary to produce a standardise, professional  letter head so that the potential  customer  will acknowledge that they are dealing with professional company.  Also,  on further contact customers can identify the company just by recognising the letter head.  Basic information to be included are:

�         logo, company name, office/email address, phone and fax
�         name of  Directors or Incorporators if applicable
�         bank account number, bank code, company registration number
�         Place of jurisdiction

The company will benefit  a lot in having an accurate and meticulously done promotional material.  It will convey a positive image to the highly competitive market and will indicate a sign of professionality of the company.

5.3.5     Maintenance of  Customer Data base

Establishing  a long term trading relationship is difficult when there  is no system adopted.  This can be achieved if one has a well keep a record of all the Western European  business contacts.  In the absence of a computer,  a good and effective filing system where all the information about specific European companies is stored. 

The following data that must be stored are:

�         Accurate Company name,
�         Take note of changes in company status since European companies usually change their legal status, to properly address the right firm in the future.
�         accurate company address
�         Keep track of any changes, not knowing the change in address or telephone number will lead to losing the customer.
�         business correspondence
�         Keeping  customer correspondences in  individual files is good for long time trading links, not only for legal requirements.
�         classification
�         Sorting the company buyers according to size  or by categories facilitate easy access and reference.
�         current business contact
�         Keep  a record of the relevant people and their internal position in the European company, as they may be a change in internal promotion

5.3.6     Commercial Fairs

In Europe,  joining specialized Fairs is one of the most important opportunity in trade promotion to expand exports.  European fairs is famous for its reliance and concentration on fairs, where all major purchasers place bulk orders undertaken in the handcrafts market.  It also gives the opportunity  in observing the competitors� product  display, giving way for product or price adaptation.  Many of the participants consider the chance to keep up to date on international competition and product development is very vital for attending the fair.  Thus, Commercial fairs are regarded as the main �port of entry� to international market.

European fair is very complex for newcomers to undergo,  so as  new participant it is important to know  the salient information and the do�s and don�ts  to avoid  incurring great loss.  Institutions like the Department of Trade and Industry or any export promotion organisations who are detailed to be expert on European commercial fairs can be tapped.

            5.3.6.1  Choosing the Right Fair

Trade fair participation in other country entails substantial costs  unless some institutions subsidize the participation. It is therefore necessary to properly plan and select which fair to attend in order to achieve the highest return on investment.  It must be remembered that European fair organisations generally allow exhibitors only to present product ranges which comply with the theme. Fair administrators has the right to exclude certain products from the stalls.  Products allowed to be exhibited  are listed in the registration forms and fair catalogues which can be obtained at fair administration offices.  (Addresses of most important European handcraft fairs, AUMA and other offices detailed to give info on fairs is in appendix)

�         Trade Fairs

European trade fairs are characterised by the prohibition of the sale of goods or samples at the fair venue. 

The purpose of which are to:

�         exhibit sample product lines
�         attract interested customers to the fair stall
�         establish medium and long-term trade contacts
�         Order  Taking Fairs

Fair wherein potential buyers inspect the product portfolio and immediately order a certain quantity to be dispatched in the near future.  However, in most cases,  purchasers  ask for sample consignment so that they can decide on the order volume when there is more time or after having tested the samples by showing them to the customers.  Only re-sellers are allowed to attend order fairs, hence be prepared to deal with professional buyers who have extensive product and market knowledge.  Since, it is not allowed to sell samples at the venue, thus creating additional costs to return these back to the country, the most common practice is to promise delivery of samples to some certain customers immediately after the fair, or arrange storage in the trade fair country ( Philippine Trade and investment Offices in Europe) if promising contacts point towards future business. Bear in mind that usually no direct revenue will be received on the occasion of the fair,   only trade links established at the fair will result to monetary return in the future.

�         Well-known and important European Fairs

v     Frankfurt �Premiere Fair�              January
v     Frankfurt �Ambiente Fair�            February
v     Frankfurt Autumn Fair                  August
v     Formland, Denmark                      February, August
v     MIC, Paris                                    February, September
v     MACEF, Milan                             February
v     Int�l Spring Fair, Berrmingham       February
v     Int�l Autumn Fair, Bermingham      September
v     IHM Internationale

      Handwerksmesse, Munich             March

( See appendix for  fair  administrator addresses)

�         Consumer Fairs

In contrasts to order fairs, this is the direct  sales, called  Consumer fairs which allow the sale of products and samples at the fair venue.  Exporters can accumulate minor revenue by selling to customers directly at the stall.  As a word of cushion, be prepared for  most stand visitors to be consumers with only limited number of commercial purchasers among them.  This kind of fairs are most common in Germany.

Although the advantage  of this European consumer fairs lie in the fact that an exporter can market test his product.  This is an opportunity to gain  first hand knowledge about the European  taste, fashion, and price acceptability, thus creating basis for product promotion and price adaptation.  Pro-trade recommends participation in consumer fairs in order to test the market acceptability for a certain product.  Once the sales level is satisfactory,  it is an indication of  more success when participating in more sophisticated fairs.

Some Well-known European Commercial Fairs

v      Heim und Handwerk, Munich               December
v      PdF Import Fair, Berlin                        June

                                                                 5.3.6.2  � MUST-KNOW�  Fair Information

For  an exporter before joining in any fair, it is  basic and of vital  importance  to  know and  learn the basic facts  ( see list) and decide  which  will best benefit the company before joining in any international fair-

�         Tips:   Is it a ???
�         Consumer fair or trade fair
�         European, national or regional fair
�         How many number of foreign exhibitors in previous years
�         General reputation of the fair  ( evaluation and feedback)
�         Fair theme
�         European Fairs tend to be product-oriented (eg.  Consumer goods in general, leather goods, jewelry, toys, etc.; however there are some exceptions like the PdF in Berlin, a specialised import fair) which are country oriented.
�         Location of  the fair
�         Choose very well the fair location which best suits the product portfolio, since European countries vary considerably  with one another in  taste.
�         Fair date
�         Consider the time of year when to join in exhibit since European demand for handicrafts products is highly  dependent on fashion and subject to seasonal variation.
�         Cost of participation
�         It must be noted that participation in  international fairs is expensive, hence for booth sharing is recommended to minimize costs; however exhibits should beforehand discussed in order to avoid internal competition.
�         Stall size and stall location in the exhibit hall
�            How much  a specific  Trade Fair participation  cost?

As discussed earlier, trade fair participation  entail considerable expense.  The return on investment cannot be immediately recovered.   Participant can expect to make loss within the year of participation, break even in the second break  and make profit in the third year.  Though, this may not be entirely true to others, however it is to be expected that profitability increases every year on one individual fair as successful products are recognised, less successful products are adapted and firm trade links are established.  It is therefore, advise to seek information to the  Chamber of Commerce or  any Export Promotion organisations  ( see appendix) on the detailed costs involved and what products may sell in a particular fair. 

�         Preparation to be done in  Trade fair participation

Careful preparation is the next step, once it has been decided what particular fair to participate.  The following steps are recommended:

                        Application formalities

It  is quite difficult to get as a stall  for any  major European nation fair for they strong demand.  It is therefore necessary to book in advance, however,  some concessions are available for developing countries.  So, in order to enjoy concessions, keeping  regular contact with the office responsible for foreign trade is a must.  Fair Administrators are strict in the application deadlines, hence it is more favourable to register in advance to have a good chance of getting a good stall location.

                        Carriers and Forwarders

Keeping an up-to-date list and having regular contact with various carriers and forwarders  will give a picture on which is the best firm  that gives reasonable charges.  As a good practice, it is better to deal with one single forwarder that will take charge of transportation  of the goods from the port of origin t direct to the fair site and likewise  transporting it back.

                        Ancillary Bookings

To avoid delay, it is best to book flight and hotel accommodation ahead of time. In Europe, it is advisable to reserve hotel accommodation well ahead of time, since  it can be cancelled free of charge.   

However, it is better to allocate sufficient time before and after the fair for the supervision of stand construction, decoration and dismantling and follow-up bookings.

Know the  means of  public transport from hotel to the fair site or  evaluate the possibility of renting a car for the duration of the fair.  In some cases, fair administrator provide special accommodation and rental car services to exhibitors, however these are not  normally free of charge.

Arrange to hire a stand assistant with good command of the major languages if the company representative is not used to do business in other languages.

                        Choosing the right samples

Since NOT all products of the company can be displayed in the stall,  the principal objective therefore is to exhibit products that  has the potential and have reasonable chance on the export market.  European customers can be attracted to the stall if the overall product display corresponds to their perception of interest and quality.  It is better to have few product samples that caters to the European taste than  spoiling the picture by adding numerous samples of products  nobody is prepared to buy.  Be knowledgeable on European trends and fashion .

                        Invitation Mailings and Public Relations Work

As the main objective in fair participation is the establishment of trade links with European  buyers , it is best to start making moves of  attracting potential customers way ahead of the fair starts.  Inform  the potential purchasers about the company�s participation by sending them invitation  brochure to visit  the exhibitor�s stall..

                        Here are some guideline for the production of invitation brochures:

�         Print the invitation text  in English with French  or German  translation.  This will convey a highly professional image of the company,
�         It  should contain the following: name of the fair, fair  date and location, stand number, products, company and country of origin,
�         Include a REPLY form wherein interested parties can request further information,
�         Ensure that the address used are complete and correct,
�         Send letter/brochure one or two months in advance.

The main purpose for these is to make the company stand out among the droves of handicraft exporters.  This is  also advertising the trade fair participation of the company whenever  the occasion arises.

Getting addresses  of potential buyers from Export organisations and chamber of Commerce Offices, and from other sources such the European handcraft and giftware journals.  Ask for inclusion in the official fair catalogue, since this is used as a guide by majority of fair visitors.

                        Sample Shipment and Customs Formalities

Most fair Administrators operate their own forwarding company with special rates (delivery of samples from port/airport to fair venue), they will most invariable set a deadline for the latest arrival of sample products.  Check on competitive rates of various carriers and choose the one with the best reputation for reliability and best competitive rate.

It also a must to learn all the legal foreign trade constraints that apply to the product samples. 

These are the important  documents that must be prepared to accompany the sample consignment:

�         Pro-forma invoices (2), preferably in the language of the fair  country,         
�         Prices should be quoted either in the currency of the fair country or in US Dollars and  the quoted price ( eg. FOB; CIF, etc.)
�         Brochures, catalogues or other written descriptive material to help unambiguously identify the product samples.
�         Detailed packing list attached  to every package of consignment.  ( 4 copies)

There is no VAT charge to sample products when there is no sales involve and are just used for exhibit, thus will be again sent back to the country of origin. However,  in the case of sold goods,  a VAT will be paid.  To avoid fraud, some agents ask for a cash deposit amounting to the value of  VAT on the full invoice then will later be adjusted  after the fair.

Value Added Tax ( VAT) or Sales Tax

All merchandise imported in Europe is subject to a sales tax known as  VAT in  English or MWST in German, TVA in French with a rate ranging from 15% (slight variation from country to country).  The Clearing Agent who is responsible to receive the goods to be exhibited at the fair is also responsible for paying this tax to customs authorities.

In all cases, fair administrators employ clearing agents that specialises in importing fair exhibits with offices and warehouses in the fair venue.

However, for consumers fair, it is normal practice for the exporter to send the maximum volume of merchandise to sell plus a buffer in anticipation for more sales.  A special arrangement must be made with the customs authorities for unsold product that will be returned.

The foregoing steps  are to be done in case some goods which are not sold will be returned to the country of origin:

�         Upon arrival of consigned goods, the clearing agent will prepare the entry documents and calculate the VAT on the FULL INVOICE value,
�         Clearing agent makes a legal binding promise to the customs authorities to pay the FULL VAT in behalf of the exhibitor,
�         At the end of the fair, all goods sold are marked on a copy of the ORIGINAL INVOICE,
�         VAT is only payable on all goods SOLD, all  the remaining products will be invoiced and can be sent back to the country of origin without being subject to European tax.

Likewise for Trade Fair participation, NO VAT is payable on the samples consignment because no actual sales has taken place.

Fees for customs clearance carried out by the fair ground clearing agents are generally higher than standard clearing fees due to the extra work involved.  In practice, clearing agents collect their fees during or immediately after the fair.  Some agents ask for cash deposit amounting to the value of VAT on the full invoice value in order to cover for possible fraud.

Company Information Materials

It is also important that Display Leaflets, business cards as well as self-explanatory catalogues and price lists is accessible to potential customers especially when the  Marketing Representatives are busy negotiating with other customers.  These info materials will  attract trade fair visitors and hold the potential customers interest.  Still, the most vital thing that must not be overlooked is the personal conversation, this will in most cases produced positive results.

                        Designing Company Image

In most of the European fairs,  the exhibitor is quite free in designing the stand, except in some cases wherein  a free-fabricated stall installed, like there is already the side walls with wall paper or wall hangings.

The Exhibitor has the choice to hire a professional building contractor, or to build it by himself.  Normally,  there is a list of approved contractors approved by the fair organisation, these are generally employed when the budget allows for a sophisticated stand interior.  It is recommended  that negotiation with this contractors be done at least six (6) months before the fair date in order to provide ample time for plans to be prepared, discussed and revise if necessary.  In Europe, professional contractors are employed practically all stands on trade fair and 40% of all stands on consumer fairs.  Exhibitors with limited budget may build their stands with the help of small contractors made available through the fair organisations.

It is also possible to rent carpets, shelves, furniture, telephones and other things  needed on the stand.  Though, it must be remembered that the layout should be based on making the stand attractive, gaining the maximum advantage to project the products and providing easy access for customers to examine the goods.

It must be remembered also that the company image can only be established if the customers know they are dealing with the company, hence it is therefore important to put up signs of company logo and name for identification purposes.

                        Fair Proper

As in any fair activity, establishing personal contact is one of the most challenging and crucial job a marketing representative must face.  Here are some  well-accepted practices that  ought to be remembered:     

                        PROFESSIONALISM

This must be the image the company must convey to the European buyers, hence the representative should be equipped with the market and product knowledge.  He can explain well about the products, the material used, price negotiation and other related information that may arise.   Things to remember:

�         Take note of customers comments for future use ( eg. Price, design, etc.),
�         Collect business cards and annotate comments, if necessary
�         Have always a pocket calculator on hand especially for price negotiation

LANGUAGE

It is always an advantage to do business in the native language of the potential customer, however  majority of the European fair visitors speak either English or French, hence it  the representative does not have a good command of the language it  is advisable to have an interpreter available at any time.  In any event, a friendly look, a warm smile and a few polite words will almost certainly open doors to a possible order.

ATTITUDE

Make sure that the stand are properly cleaned-up and displays re-arrange before the fair officially opens.  To gain attention, make the effort to start sales conversation to potential customers.  Be open and friendly and take all questions seriously.  Wearing the native costumes is an added attraction instead of the usual  business attire.

                        Trade Fair Selling

In case of  sales; accepting bank payment in one�s own  country may take some weeks to clear.  Banks usually operate branches in the fair site, so it is better to open an account with one of this branches in order to pay in  the Euro-cheques and cash earned during the day.  Arrange to have the money sent to  bank account of one�s own country, in case the cheques have not been cleared before the end of the fair.  Also  consider introducing a  credit card payment on the stall, since more businessmen are now attuned with use of it.

Though it is tempting to reduce the price, especially on the last day in order to sell-off remaining stock, however this may  destroy in the long run destroy  establishing long term trade links to European customers, since they may not be prepared to pay a higher price in the future.

                        Follow-up Activities

Follow-up activities to fair contracts are considered very vital in successful fair participation. In general, the exhibitors obtain more information on contacts than visitors do; visitors therefore can be very interested in exhibitor�s product line, but may not picked up any promotional material, thus have no way of getting in touch with the exhibitor in a later date.  It is definitely up to the exhibitor to re-contact the potential buyer. 

�         Here are some �ALWAYS�  tips:
�         keep in contact with the people met in the fair,
�         keep tab of their calling cards and collate them,
�         never promise delivery of an order that cannot be done
�         send price quotation to customers who asked for them
�         immediate reply to any business letters or faxes received from potential customers.

            5.4    The Distribution Channel

In marketing, it is not only essential to obtain information on what products the customers want, but it is vital to find out where they buy them ( competitor??? ) and through       which distribution   channel  ( retailers??? )  they finally reach the consumer.  As practice in Europe, the following information will outline the different possibilities of distribution:

             5.4.1    Distribution Channels and its effects on Price

The distribution chain in foreign trade always start with the producer, which can be the company itself  who export the goods or another firm.  The production and trade capacity is dependent on whether  it is profitable to establish own internal export facility or whether to sell the products to a domestic trade company called the importer. In the European commercial circuit, these  are  the two typical distribution channels.

Type A:

Type B:

It is therefore very important to know the kind of buyers (Importers) the exporter is dealing with.

Here are the four (4)  types of importer.
( Some addresses of  Key Account Buyers are also included in the last chapter)

                         1   Importing Wholesaler

The company imports goods and distributes them to other commercial firms, mostly sales outlets.  The wholesalers are the major links in the Western European distribution chain which involve the flow of goods handled in Western European markets.  Many wholesalers (WS) specialise in certain product areas, thus have sound market knowledge which they applied with extensive databases on commercial customers.  Hence, trade negotiations with the WS will be hard and complex.  The exporter/manufacture  must be prepared to negotiate for heavy price reduction of large order quantities. In effect, there is a better chance of presenting the entire product  range to the WS company bearing in mind  always the exporter�s production capacity.

                        2   Large Independent Retailers

This kind of  firm has a large economies of scale which enables them to profitably import some of its product range without the involvement of a wholesaler ( eg  Harrod�s of London ).  The best  marketing scheme to this kind of  Distribution channel ( DS) is by pointing out the special features of a certain product.  Typical kind of this distribution link is the Department Store which has a specific purchasing department under one company roof.  So, it is advisable to present to the purchasing department an array of assorted items.  However, the same thing to be expected, the graduated pricing  should be in effect since it is expected to order for large volume.

                        3   Retail Chain  (RC)

Company with numerous sales outlets spread around a certain region is termed as Retail Chain.  Normally this has the same product range on display, wherein a central buying station is in charge of  procuring goods which are then sold from all the outlets. These RC are large companies and have their product specialisation,  therefore carefully select the products to be presented to the purchasing department and expect for volume orders, thus the graduated pricing should be employed accordingly.

In addition to the aforementioned distribution chains, there are the so-called hybrids of both, termed as Department store chains.  As the name implies, this company order vast volumes, so  producers with limited production capacity has little chance of success.

                        4   Mail Order Company/Internet Shopping

This is the latest distribution scheme that is sprouting in the rich countries of the western hemisphere.  The  idea is to make shopping convenient for the consumer as  much as possible, so a person can  purchase goods at home or office without being able to see the actual products.  There are several means by which sales are achieved:

Sending out Catalogues

Catalogues with products illustrated in colour ad with  an extensive product descriptions.  The consumer then looks at the catalogue, ordering article according to the reference number, and these are then sent by post.  Mail order houses usually serve a vast number of households, therefore order large volume, however there are a number of them that specialised in handcraft products which purchase volumes feasible for small and medium sized exporters ( eg. Manufactum in Germany).

A variation or a combination of this type is  the  Internet-Shopping, although not yet widely known, but a growing percentage of consumers, called the generation X, ( who are into computer and internet) are starting to crop up in Europe. The idea is like in the order catalogue, the only difference is  that products can be seen and illustrated in the internet where it has more visual effects, thus exporters should be aware of these type of buyers and be ready  particularly with  good product photos and description.

                        5.4.1.5   Fair Trade or Alternative Trading Organisation ( ATO)

This is a  special feature of commercial trading, wherein PROFIT is not  the principal concern of the company.  ATO`s  purpose lies in the field of business ethics.  These are  usually Non-Government Development Organisations ( NGOs) ( pioneered by the Church in Europe)  giving the opportunity and assistance to small producers develop their business.

It aims to help the producers from developing countries to sell more to richer countries, like Europe, thus ultimately be able to employ more people, raise the per-capita income and improve the quality of life of the people.

ATO deals with organisations, which they believe to work on ethical basis related to treatment of workers.  ATO`s procedures  are so complex that require a lot of preliminary internal information before one can be included in the rooster of suppliers.

Different distribution concepts have different effects on price.  So more links in the Distribution Channel means higher overall handling charges since every links need to gain financial compensation.

5.4.2     Transportation and Despatch

These are the different legal regulations that must be  studied in the foreign trade distribution:

5.4.2.1  Documentation Process

Official Authorities both  from the country of origin of the goods and its destination require and check compliance to all the legal requirements imposed and likewise  the duties and taxes levied.  Listed hereunder are the required documentation that are needed to be prepared and sent to the importer.

�         Invoice

       Contains full description of the goods, prices, terms of delivery, content per package, other costs details, specification of special documentation ( if required).

�         Packing List

       Separate packing list for every package of consignment.  Customs of the importing country check the correctness of contents as stated in the packing list.

�         Shipping Document

The package should  have the Proof of receipt, Contract transport and document of title ( Airway Bill or Bill of Lading)  when it will be handed over to a carrier en route to the destination country.

�         Certificate of Origin   ( CO)

To enjoy customs duty reduction or exemption, this certificate must be prepared for approval by the government of the exporting country and examined by Customs of the importing country.

Two Forms: 

1.  WTO/GATT:  Generalised System of Preferences (GSP) with CO Form A
2.  Lome Convention/European Union: EUR1 Movement Certificate

�         Specialised import/export documents

These are specialised documentary requirements for different products that Custom Authorities of importing country may impose.  (eg  Textiles  cf: Multi-Fibre Agreement, certificates on health, safety, import/export licenses, etc.) 

             5.4.2.2   International Shipment

             There are three (3)  ways of transporting goods. 

                        Differentiation              Cost                 Documentation/Prep.        Delivery Period

                        1.  sea freight          cheapest             Bill of Lading (complex)    long

                        2.  air freight           expensive            Airway Bill  ( simple)        short

                        3.  parcel post         medium               -                                      meduim

            5.4.3      Packing, Packaging and Marking

                        5.4.3.1  Packing and packaging

Different kinds of handicraft articles require different  forms of  packing and packaging.  (Refer to 5.1 pages 3-5 for the different packaing methods)

Here are some tips to remember:

�         take special care in wrapping parts of the products which are prone to breakage,
�         protect all surface of the products.  All single article should be individually wrapped or packaged with the appropriate wrapping material.
�         stuff sufficient packaging material in between each other to avoid breakage,
�         Use  sturdy and appropriate quality for the outer container,
�         Appropriate chemicals  to prevent moisture and packaging materials are already discussed.

                        5.4.3.2  Markings

Every package must be properly mark.  Include the name and address of the consignee and include specialised marking the customers  might request.

            5.4        Payment   Scheme

                        5.4.1    Terms of  Payment

There are several methods of  payment.  However it is noteworthy to know the implications of each of the different mode of payment,  each has its own positive and negative side.

�         Payment by Invoice
Only upon receipt of Goods and INVOICE, customer  will remit the invoiced amount to the clearing bank or bank specified by the exporter.  This save paying additional charges.   Adopt this strategy only if  there is a complete trust to the customer.

�         Documentary Collection
A safe way to deal with customer.  The goods and documents are consigned to the specified bank of customer and the exporter which then in turn must not hand in the goods or documents to the customer unless he promised( binding) to pay the invoice.  The danger here is when the customer for some reason may refuse to accept the consignment.

Steps to be followed;

1.  Despatch of goods and documents at the same time the BILL OF EXCHANGE (  form of payment claim similar to documentary collection ) is sent to the Importer�s bank .

      2.  Importer�s bank remits the amount stated in the invoice to the exporter�s bank.  There are two types of bill of exchange.  Documents against

            payment, presents a bill of exchange payable at sight or the documents against acceptance,  payable at a specified date.

�         Letter of Credit

This is the safest approach to payment in foreign trade.  The customer�s bank promises in a legally binding way to pay for the consignment at the time of shipment to the destination country. LC�s payment terms are drawn so that the exporter receives payment from his own bank on presentation of the export documents. 

Steps:

1.  Upon confirmation of order, the importer asks his bank to open a credit in favour of the exporter�s bank,

2. Upon  shipment of goods, the exporter can now present all the necessary documents to the bank for payment..

3. The exporter's bank presents documents to the importer�s bank and receives payment.

4. Importer  receives documents from his bank upon  payment or promise to pay

There are several types of LCs.. Confirmed, uncomfirmed, revocable or irrrevocable.

�         Payment  in Advance

This is a common  scheme in the handcraft trading wherein the exporter ask for  a partial or total payment of orders.  European buyers are quite used to give payment in advance, especially when ordering samples.  The exporter has to send a pro-forma invoice and once paid the exporter despatches the sample order.

Listed in descending order  are the type of payment favourable to the exporter:

1.  Total prepayment                                  -  not commonly used, only ATO
2.   Partial Prepayment                               -  established trust & confidence
3.   Confirmed letter of Credit                     -  secured but costs involved
4.   Unconfirmed LC                                  -  same from  3 to 7
5.   D/C: documents against payment          -
6.   D/C:  documents against acceptance     -
7.   Payment against Invoice                       -  OK,  guarantees prompt pay�t

                        5.4.4.2  Actual Payment

It is very essential in foreign trade to negotiate which channel  of payment should be effected.  Here are the different forms of  payment.

�         Bank Transfer
Remittance to overseas countries via Bank. The safest way to transfer money.

�         Bank Draft
This works like a check and is drawn in the currency of the invoice.  Low in administrative cost but  has an element of uncertainty.

�         Cash
Usually done in consumer fairs; however it is recommended to use a temporary European Bank to hold money and remit it direct to the account in the home country at the end of the fair.  It is unsafe to carry  or send by check  through  the post.

�         Counter trade
Payment of goods  not with money but in kind equivalent to the amount of the export invoice.  This is very complex.

                        5.4.4.3  Terms of Delivery

European purchasers order the products according to a buying cycle, hence it vary significantly according to the seasons.  As commonly practice, approximately purchasers order the goods six months advance for the season. Maximum order cycle is as long as one year.  To avoid order cancellation,  it is a must to deliver the goods on the specified period stated by the purchaser.

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