International Pricing Companies that market their products internationally must decide what prices to

charge in different countries. In some cases, a company can set a uniform worldwide price. For example,
Boeing sells its jetliners at about the same price everywhere, whether the buyer is in the United States,
Europe, or a third-world country. However, most companies adjust their prices to reflect local market
conditions and cost considerations. The price that a company should charge in a specific country
depends on many factors, including economic conditions, competitive situations, laws and regulations,
and the nature of the wholesaling and retailing system. Consumer perceptions and preferences also may
vary from country to country, calling for different prices. Or the company may have different marketing
objectives in various world markets, which require changes in pricing strategy. For example, Apple uses
a premium pricing strategy safe. Ryanair’s focus on cost reduction has resulted in significantly higher
profit margins than those of rival EasyJet. Some of the cost savings are passed on to the customers in
the form of lower fares (the plan is an average fall in fare levels of 5 percent per year) to make the
airline even more attractive to its target market, which is the leisure customer. The stellar growth in low-
cost flying and dynamic pricing has attracted new entrants, such as Flybe, Jett, and Goodjet in Europe, as
well as AirAsia Berhad, a Malaysian low-cost airline headquartered near Kuala Lumpur, Malaysia, and
operating domestic and international flights to 100 destinations spanning 22 countries. Traditional
airlines have also responded. For example, Air France, Lufthansa, and British Airways have cut prices on
many of their European flights in an attempt to stem the flow to the low-price carriers. However, their
prices remain significantly higher than Sources: “Dynamic Pricing Explained,” EasyJet,
http://www.easyjet.com/en/dynamic-pricing-explained; “About Us,” EasyJet,
http://corporate.easyjet.com/about-easyjet.aspx?sc_lang=en; Lisa Bachelor and Miles Brignall, “EasyJet
Customer Angered by ‘Best Deals’ Offered for Lanzarote Flights,” The Guardian, June 1, 2012, http://
www.theguardian.com/money/2012/jun/01/easyjet-customer-best-deals; “History of Ryanair,” Ryanair,
http:// corporate.ryanair.com/about-us/history-of-ryanair/; “Havard Business Case Study (HBS) Air
Asia,” D’heart IT Solution, http://dheartitsolution.blogspot.de/p/havard-business-case-studyhbs-air-
asia.html; Cecilia Rodriguez, “Airlines Look to Raise Revenue the Ryanair Way,” Forbes, March 5, 2012,
http://www.forbes.com/ sites/ ceciliarodriguez/2012/03/05/105/; Jane Leung, “Ryanair’s Five
‘Cheapest’ Money-Saving Schemes,” CNNTravel, October 17, 2011,
http://www.cnn.com/2011/10/17/travel/ryanair-money-saving-schemes/index.htm; http://
www.ryanair.com/en/investor/investor-relations-news, accessed September 2015;
http://www.corporate .easyjet.com/investors/results-centre/2014.aspx?sc_lang=en, accessed
September 2015; Sam Dean, “EasyJet Reports Passenger Boost as Ryanair Chases UK Dominance,” The
Telegraph, http://www.telegraph.co.uk/ business/2016/05/06/easyjet-reports-passenger-boost-as-
ryanair-chases-uk-dominance/, accessed April 1, 2017; EasyJet website, “EasyJet Monthly Traffic
Statistics for December 2015,” http://corporate.easyjet.com/ investors/traffic-
statistics/2015/english/dec, accessed April 1, 2017; Ryanair website, “Traffic,” https://investor
.ryanair.com/traffic/, accessed April 1, 2017. Dynamic online pricing benefits both sellers and buyers.
Consumers armed with instant access to product and price comparisons can often negotiate better in-
store prices. © Lev Dolgachov / Alamy those of Ryanair and EasyJet due to their different cost structures
and more traditional pricing strategies. Ryanair and EasyJet have successfully implemented and pursued
their low-cost approach and dynamic pricing, and revolutionized the airline industry. They have proven
that companies can provide customer value in more ways than one. If they manage to sustain their
development, not even the sky’s the limit. ChApter 11 | Pricing Strategies: Additional Considerations 343
to introduce sophisticated, feature-rich, premium smartphones in carefully segmented mature markets
in developed countries and to affluent consumers in emerging markets. By contrast, it’s now under
pressure to discount older models and develop cheaper, more basic phone models for sizable but less
affluent markets in developing countries, where even discounted older Apple phones sell at prices three
to five times those of those of competing low-price models. Costs play an important role in setting
international prices. Travelers abroad are often surprised to find that goods that are relatively
inexpensive at home may carry outrageously higher price tags in other countries. A pair of Levi’s selling
for $30 in the United States might go for $63 in Tokyo and $88 in Paris. A McDonald’s Big Mac selling for
a modest $4.20 in the United States might cost $7.85 in Norway or $5.65 in Brazil, and an Oral-B
toothbrush selling for $2.49 at home may cost $10 in China. Conversely, a Gucci h