Trade Between Taiwan and Japan

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Introduction

International trade has facilitated movement of good and services. There are measures put in place to remove trade barriers among nations as well as having a controlled trade among them. One of the most used trade barriers are tariffs and quotas.

Recognizing the effects that these barriers have on international trade, World trade organization (W.T.O.) came up with a harmonized tariff classification code (HS. Code) which gives the rate of duty which countries should be charging on imports from other countries.

Taiwan and Japan are members of W.T.O. (Bōeki 33). They would like to engage in trade where Taiwan is to supply/export frozen eels to Japan. This paper offers an export plan which will be used in the trade.

Product description

The product to be exported from Taiwan is frozen eels. Eels are crustaceans’ species with a scientific name as Anguilla marmorata. In the trade deal, Taiwan will be processing them to finished food products which will be added flavors and transported under frozen conditions.

Tariff code

Under HS classification, crustaceans are in chapter three: fish and crustaceans/ aquatic life, either frozen or fresh. The Hs code of frozen eel is 0301929090. To calculate the tariff, weight is the one that is considered. Then customs value is calculated by taking a percentage of the value of the goods, plus insurance during freight and freight charges.

Tax payable = tariff code percentage [C.I.F. value]

CIF value = cost of the goods at country of origin (Taiwan) + cost of transporting the products + insurance cost to the port of destination (in Japan) (Bōeki 56).

Mode of transport

There will be two modes of transport which will be adopted during the trade; air transport and sea transport. The containers to be used will be refregenerated and of different sizes depending with the demand of a certain consignment. Transporting services will be contracted to Emirates transporters for plane transport and Maersk logistic company for sea transport. Taiwan does not need to have its own refregenerated containers’ but it will.

Target market

Crustaceans are human food. The target market is the general population of Japan; to reach the wide market, the goods will be packaged in packages affordable to the less fortunate and the poor. To venture in the market, supermarket and hotels from three stars will be contacted.

The market segment can be divided into two categories;

Individual customers
Institutional customers

Individual customers

There are those people who like eels. They will not be distributed to them as individuals but will be targeted from the consignments taken by supermarkets and other food outlets. To get the market, the packaging will be of small size and different prices affordable to different classes of individuals.

Corporate customers/individual

The target is hotel which cooks the food and sells to their customers. Their packaging in terms of kilograms and the way they will be treated will be different in that they will have a high packaging and one on one selling will be adopted by our selling staff. Any other institution that require large consignment to be repacked or cooked the way it is will be supplied as an institutional supply.

Market Entry strategy

To venture in Japanese market, Taiwan will utilize the long relations that the two countries have had. Taiwan embassy will introduce the product in Japan and embark on selling it to corporate and individuals. In trade fairs and other international shows, the products will be displayed and sold to the people.

Hospitality selling has changed from traditional selling strategies. Traditionally, sales were aimed at creating awareness of existence of a product in the market. However, functions of sales have increased to develop a company-customer relationship. Customer loyalty and building a strong brand name are the advanced objectives of sales. This will call for Taiwan to send representatives to Japan who understand customer based selling.

Another way that the country can adopt is having an international marketing and logistic company. The company should look for market to the products in Japan. Additionally, there will be use of multinational companies with branches at Taiwan and in Japan. They will be encouraged to advice their Japan based company on the produce (Blanchard 889).

Market penetration strategy

After establishing the market, the next move is massive advertising campaigns. This will be followed by continuous improvements of the goods to retain customer loyalty and confidence. One of the ways to enter in the target market is marketing mix. The 4Ps represent Price, product/service, promotion, and place. An effective marketing ensures that goods are available to the target customer, when they need them and they are affordable. The marketing company in Japan will ensure that goods are available at the right place in the right cost.

Price strategy

The eel’s products will be of different tastes and cost differently. On the other hand, they will be packed in different weights to ensure that all segments of the market can afford them. The price of a commodity is an element of total cost plus a profit margin. When a target market has been established, there is need to determine the price affordable to the customers.

A marketer should be aware of consumers’ trends and their potential. The social class that the product is targeted will influence the price of the products. The price parameter can be approached from the actual product price or the possibility that the product can be divided into smaller parts, not necessarily cheap, but to enhance affordability.

Place strategy

The target market in Japan can be divided into two; individuals and corporate. The market segment, that the marketer want to target, will influence the distribution that he is going to use. Where the customer is more likely to be found should be the place that the goods are provided. Products should be available in supermarkets and shopping malls where individual customers are likely to be found.

Corporate will be supplied from Japan’s warehouse and if the stock available cannot meet the demand, quick measure will be put in place to transport them from Taiwan.

Promotion

Promotions are done in the effort to either introduce a new product or increase the market segment. To engage in a promotion, the first thing to understand is the availability of the target customers. Where are they likely to be found? Are they free in the mornings, is it in the afternoon?

After realizing their availability and when they can give you time, and know the age of the market. If the promotion focuses on introducing a new product, then a lot should be invested in assuring the client of better quality than what is offered by the competitor. The existence of opinion leaders should be evaluated.

Customers are likely to follow the opinion leaders in making their decisions. The existence of groups in the society and their matching lifestyles can also be of great use. If the promotion is for an already existing product in the market, the approach should be from the angle that we are thanking our customers. If the customer feel appreciated and recognized he will develop loyalty and influence others to follow his way.

Product

When a company is developing a product, there is a need that the product is supposed to fulfill. The higher the utility the customer gets, the higher the demand for the product.

When products are developed, the team should always invest in offering something extra to the consumer. If target customers are aware of the expected ingredients, the campaigns should have a lot of emphasis in the ingredient used. On the other hand, if the customers are not much interested in the ingredients, or they even are not aware of the ingredients, the focus should be the outcome that the product will give.

The marketing campaigns should explain to the customer what benefit he will derive from using the goods. What does the target customers expect, what are they likely to be moved by? What is the age of the target customer? If the target customer are children- by extension the parents, the products should have attractive bright colors that are more likely to attract children (Blanchard, 884).

Sales forecast 3 years

with adequate campaigns and marketing strategy, the exports are expected to have increased sales. The following is the projected sales in pounds;

Year	Projected sales (in Million dollars)
YEAR 1	2,350,000
YEAR 2	4,650,000
YEAR 3	8,900,000

Proforma income statement

It is expected that there will be an increase in expenses as sales increases. The country policy will be to keep profit margin at 50%. The following is the expected

Proforma income statement

	Year 1	Year 2	Year 3
Sales 2	2,350,000	4,650,000	8,900,000
Cost of goods sold	1,625,000	2,325,000	4,450,000
Gross profit	1,625,000	2,325,000	4,450,000
Operating expenses plus tax	625,000	825,000	2,450,000
Net profit	1,000,000	1,500,000	2,000,000

Conclusion

Economic integration makes international trade easier through the removal of trade barriers and tariffs. With economic integration, good and services, labor and capital find their way in the country where they can be put into maximum use. Increase in mobility of factors of production faces some negative challenges especially because of the economic pressures in the global market.

Today, the global economy has increased to significant levels and all this have been facilitated by trade agreements. Globalization is at the center stage but it is affected by international trade, and free trade. A harmonized tariff classification code (HS. Code) which gives the rate of duty which countries should be changing on imports from other countries.

Taiwan and Japan are members of W.T.O. and they would like to engage in trade where Taiwan is to supply/export frozen eels to Japan. To venture in the market, Taiwan should embrace 4Ps marketing mix. It should use its embassy to assist it in entering the market. To remain a leader in world competitive market, the country should ensure that it continually improve its processes.

Works Cited

Blanchard, Emily J. “Trade Taxes and International Investment.” Canadian Journal of Economics 42.3 (2009): 882-899. EconLit with Full Text. EBSCO. Web.

Bōeki, Shinkōkai. Japan trade directory. California: Japan External Trade Organization, 2000.

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