FACTORS AFFECTING PRICE DECISIONS FOR EXPORT

MARKETS
INTERNATIONAL MARKETING - GROUP 721
Jefferson Stiven Huertas Hernández
Gabriel Alejandro Barinas Bautista
María Fernanda Rivera Méndez
Sharol Nallely Benito Garzón

Setting prices for international markets is not an easy task. Product,

price, and distribution decisions for international markets are unique to
each country (Jain, 1989) and differ from those for the domestic market
(Diller and Bukhari, 1994). In addition, other factors such as: rate of
return, market stabilization, pricing based on demand and competition,
market penetration, early cash recovery, prevention of competitive entry,
factors of the company and the product, environmental and market factors,
as well as economic factors. Political, social and cultural factors must
be considered in the decision-making process

NEOCLASSIC THEORY OF PRICES UNDERSTANDING FOREIGN MARKETS

Price influences customer behavior, called
"neoclassical theory." The theory states that
customers have different tastes and preferences, and
choose between products to maximize satisfaction or
utility.
Companies must think beyond their internal markets to
survive and prosper. They have to think globally and act
locally. The task of managing international marketing is the
same as that of national markets. In all markets, customers
are the driving force of marketing and companies need to
produce products efficiently

REASONS TO SELL ABROAD OR EXPORT

Firms go and sell internationally based on "pull" factors, based on the attractiveness of a potential
foreign market, as well as "push" factors, which make the firm's domestic market appear less attractive.
The following are some of the factors that push companies to sell abroad.

The market is small

Expansion to reduce your dependence on a geographic market
Contributes positively to the economy of a country at the Macro and
Micro level
Increased sales and opportunities
Lower production costs
Take advantage of new markets with low-turnover products within the
local market.
Take advantage of big markets like the US, Asia and Europe
Learn advanced technical methods within the foreign market.
Improve the investment of the company.
Try opportunities for licenses, franchises or production abroad.

PRICE STRATEGIES PRICE STRATEGIES

Price is the amount of money charged for a product A premium price is adopted when there is
or service. Price = product + service + benefit + a substantial competitive advantage and
image. The price will include: the product or service is unique.
Production cost
Advertising cost PRICE STRATEGIES
Entering the market with an exceptionally
low price item creates a broad customer
base, It is designed to gain market share
quickly, companies set a low price
compared to other competitors.

PRICE STRATEGY MATRIX

Rigid cost-plus strategy: To make a profit, managers adopt a rigid cost-plus pricing strategy.
This is accomplished by adding international customer costs and a gross margin to domestic
manufacturing costs.
Flexible cost-plus strategy: The flexible strategy allows price variations depending on the
circumstances. For example, there may be some discounts depending on the customer, the order, or
competitive factors.
Dynamic Incremental Strategy: The strategy assumes that fixed and variable internal costs are
incurred regardless of export sales. In this strategy, some internal costs such as: R&D, internal
promotion and marketing costs are ignored.

PRICING PSYCHOLOGY CONCLUSION

Psychology plays an
important role in the world
of marketing. Helps build
perception of price and
value. The psychology of
retail prices is probably
more important than the
price itself.
Pricing is one of the most difficult problems in
setting the price of a product or service. It
can include the cost of producing and supplying
the product, the profits you need to sustain the
business. The right prices take into account
costs, market demand and competition. If a
foreign market is served by many competitors,
you may have no choice but to match the current
price, or go below it, to gain a share of the
market.