Academic journal article Global Economic Observer

Trade Promotion Organizations (TPOs) Role in Laying the Groundwork for an Export Promotion Program

Academic journal article Global Economic Observer

Trade Promotion Organizations (TPOs) Role in Laying the Groundwork for an Export Promotion Program

Article excerpt

1. Introduction

Trade promotion activities are a function of several entities in any country. There is usually one central governmental export promotion body to provide the policy framework and mechanism for co-ordination and consultation among the various sectors or organizations involved in foreign trade. Such TPOs can specialize in a few key functions or perform a broad range of services. The type and extent of their activities depend on the resources available to them, such as the experience of the organization, the quality of its work force, its network of linkages and financial resources. The TPO's ability to identify changing conditions and requirements of its primary clients - the exporters - and then adapt trade promotion services accordingly is more important than the variety of services offered.

The aim of this paper is to outline the procedures and methodology for identifying products focused on company-product selection and the identification of exporters' needs.

2. Identification of products and markets

Most countries focus on strategies for export development and promotion, given the importance of national goals and, in many cases, limited resources. A TPO has a significant role in laying the groundwork for an export promotion program. The TPO can give methodological and technical assistance to the national business colectivity by doing the necessary studies to identify what products to promote and decide which markets offer the greatest opportunity for export growth. Moreover, the TPO could participate in designing and developing marketing strategies for specific sectors and products, incorporating into these strategies all recommended measures and actions for achieving export targets.

The main thrust of the export promotion and marketing efforts is to attract the attention of targeted markets abroad and to project the desired image for the country as a source of products. Trade promotion activities abroad are thus crucial functions for most TPOs. The TPO can provide a lot of services to exporters by intensifying its promotional efforts in selected foreign countries. Activities related to trade fairs, sellers' missions, inviting foreign buyers to visit local manufacturing plants and facilitating subcontracting arrangements are some examples of a TPO's efforts. Specialized export services aim at providing exporters with skills in various foreign trade techniques, thus helping them to become more competitive in the international market.

Two different approaches may be considered:

* the "integrated approach", in which several special services and overall advice to client companies are provided by a group of trained staff; or

* the "specialist approach", in which such services are offered by a specific group of specialists.

A useful and practical approach is to adopt the product-market framework for an export promotion program. As the term suggests, each program concentrates on a specific product or group of products. Activities are directed mainly at helping the specific sector or a selected group of companies to gain entry into certain markets.

The advantage of this approach is that it makes a relatively low demand on the workforce and on financial resources, which may be limited in some developing countries. The product-market framework means allocating resources to focused activities for maximum impact designed to achieve export targets. Three features of this approach are:

* Products are identified for the purpose of designing a marketing strategy for a specific sector, including all necessary action and support activities that help generate or increase exports.

* A program based on the product-market framework can address specific concerns of the sector, putting into evidence particularly obstacles to export growth, and providing the basis for coordinated or co-operative actions, including joint export promotion and marketing activities. …

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