Ensuring the quality of exported products

The traditional thinking is that business success depends on supplying products cheaper to consumers compared to rival producers. But this can be a shortsighted approach to production and management. Experiences over the last three or four decades have proved conclusively that price is only one of the factors that influence consumers’ decision. More than price, other factors vitally affect consumers’ choice such as quality of the product, its packaging, its innovative features, how far the producers respected environmental guidelines in producing it, et cetera.
The appeal of lower price still have some relevance at the low end of markets dominated by common people with their limited purchasing power. But even at this low segment of the market, intense competition between rival producers both within a country and outside have started creating the pressure on producers to go for improved quality, new product development and paying attention to environmental and other factors.
Besides, the real good profits or high profits are seen reserved for producers of high quality products for the upper segment of the market who have higher purchasing power. For example, a business firm that spends well on research and development (R&D) and creates a new model of a product, can expect to have an unrivalled market for it. Consumers at the lower segments of the market will not buy it or cannot afford it. But buyers at the upper end of the market who have enough resources will likely buy the product with zest notwithstanding that a high price tag is attached to it.
Successive governments in Bangladesh have emphasised the export led growth strategy. But the success of this strategy in today’s highly competitive international trade depends crucially on the quality aspect. Relying only on comparative advantage of labour costs, Bangladesh so far could go some way in producing and marketing for the international market a few items. But to raise earnings from exports it has to diversify and to that end it must create export opportunities for agro-based industries, leather industries, ceramic industries, horticulture, floriculture. etc. But in these new ventures its success will essentially come from sustaining in quality and safety of products and even maintaining an edge over its rivals in these areas.
The importers of such products are very likely to be keen about the quality of agriculture oriented products or food products from Bangladesh. Thus, exporters of food products from Bangladesh must be exceptionally conscious from the outset to build up an unassailable reputation to these ends in order to get a foothold in these markets and go on increasing their market shares on a sustainable basis.
It is imperative for the firms — which are about to try their hands at exporting agro-products– to acquire right from the start of operations quality control and safety mechanisms of the highest international standard and go on using them unfailingly. Besides, the Bangladesh Standard and Testing Institution (BSTI) ought to be also playing its expected role . It should apply itself rigorously and regularly to testing the standard of export products. Reportedly, this organisation lacks suitable manpower and testing facilities. Therefore, this vital organisation will have to be made stronger with equipment and personnel– where necessary– and also obliged to work regularly in the clearly defined areas.
Some entrepreneurs in Bangladesh are trying to build up an export market for locally produced medicines. Continuation of success in this sphere also depends to a large extent on maintaining the expected quality of the medicines to be exported. Charges have been made locally by consumers that the producers of medicines in some cases are not paying adequate attention to standard or quality control. The charges need to be investigated by BSTI for the sake of the export business in medicine as well as the health interests of local consumers.
Makers of various products in Bangladesh, or potential such producers, frequently complain about not having a level playing field and they maintain that they are tormented by anomalies in tariffs, bad law and order situation, smuggling and other factors. While there is substance in their grievances, it is equally true that in many cases local producers fail in the competition with foreign products because of their lack of attention to upgrading production processes, for their failure to undertake research and development, inadequate quality control, less attention to safety of products, insufficient workers’ training, less consciousness of market trends, etc. Therefore, it is very necessary that they should start paying much greater attention to these aspects.
Recently, there have been some developments which our exporters may find favourable. Some countries have declared their intention to admit Bangladeshi products in their markets on a duty-free basis. Canada declared about two years ago that it would import products from Bangladesh without duty. China was learnt to be agreeable to allow export of thirty-four categories of Bangladeshi products to its markets on a duty-free basis. The getting of similar concession from Thailand is likely. Besides, Bangladeshi diplomats are working for similar arrangements with other countries and the same could produce more positive results in the near future. In sum, the competitiveness of many export products from Bangladesh could overnight improve from the facility to be able to export without duty.
But zero duty is only one requirement, though a major one, in scoring export success. Ultimately, Bangladeshi producers and exporters must penetrate these markets, create market shares on a sustainable basis and expand such shares, based on the high quality of their products. The importing countries may create a level playing field for Bangladeshi exports by reducing duty to zero. But they can do no further. Our exporters will have to essentially meet the demand for sound quality of products in these markets to succeed sustainably in their export endeavours on a lasting basis.