International Pricing

International Pricing
 Right pricing is one of the imp
determinants of business success.
 The uniqueness of price in mktg mix is
that it is the only element which
generates revenue and other elements
incur costs.
 Exporter’s Cost
 Cost is one of the most imp
consideration in export pricing.
 Export pricing is more difficult &
complex.
 It involves export packaging, transport,
storage, export incentives, etc.
 Types of Costs in Export
Marketing…
 Production Costs
 Fixed cost
 Variable cost
 Selling & Delivery Costs
 includes cost of holding stock, packing,
transport, documentation, pre-shipment
inspection, insurance, advertising, etc.
 Pricing Objectives…
 Market Penetration
 Market Share
 Market Skimming
 Fighting Competition
 Preventing new entry
 Shorten pay-back period
 Early cash recovery
 Disposal of surplus
 Profit Maximization
 Factors Affecting Pricing…
 International Marketing Objectives
 Costs
 Competition
 Product Differentiation
 Exchange Rate
 Factors Affecting Pricing…
 Market Characteristics
 Demand Trends
 Income Level
 Importance of Product
 Company Image
 Govt Factors…
 Cont.
Govt factors…
 Regulations on Margin
 Floor & Ceiling Price
 Subsidies
 Tax concessions & exemptions
 International agreements
 Pricing Methods…
 Cost based pricing
 Price = FC+VC+OH+Mktg cost+ specific %
of total sales
 Market Oriented Pricing
 Flexible, affected by demand & supply
 Competitor Pricing
 Negotiated Pricing
 Negotiation between buyer & Seller
Pricing Methods…
 Customer Oriented Pricing
 Break-even Price
 Marginal Cost Pricing
 Transfer Pricing
 Steps in Pricing
 Defining Pricing Objectives
 Analyzing Market Characteristics
 Calculating Costs
 Calculating Value Incentives
 Determining Export Price