CASE STUDY WEEK 5

Nathania Lerona Ariyanto - 0106012010116

Nathania Chiquita Anthony - 0106012010443
Nabilla Rahmadina Dinda Laksono - 0106012010403
Jessica Melwin - 0106012010299
Maulidiah Asri Fansyah - 0106012010109

1. - Revenue generation: Pricing is directly linked to revenue generation, which is critical to

the success of any business. The price a company sets for its products or services will
ultimately determine the amount of revenue it can generate.
- Profitability: Pricing also impacts profitability, which is essential for the long-term sustainability
of a business. If a company prices its products too low, it may not be able to cover its costs and
make a profit. On the other hand, if it prices its products too high, it may price itself out of the
market.
- Competitive advantage: Pricing can also provide a competitive advantage. A company that
offers its products or services at a lower price than its competitors can attract more customers
and gain market share.
- Brand image: Pricing can also impact brand image. A company that prices its products or
services too low may be perceived as offering lower quality products or services. Conversely, a
company that prices its products or services too high may be perceived as catering only to a
high-end market.
Market positioning: Pricing can also impact a company's market positioning. A company that
sets its prices higher than its competitors may position itself as a premium brand, while a
company that sets its prices lower than its competitors may position itself as a value brand.

2. Price fluctuation also depends on seasonal changes during summer and school
holidays. With this competitive mindset, AirAsia launched a provocative US$1 airfare for
domestic and international flights in August 2010. Prices, in the context of an airline, are
largely determined by operating costs.As opposed to the conventional full-service global
airlines, AirAsia X is able to prove that even the long-haul market is price-elastic, with a
big underserved potential customer base that responds well to fares 40% to 50% lower
than those offered by conventional airlines.So it’s concluded that air asia considerations
was the price of the fuel and their marketing strategies know-how and X-factor to
capitalize on such opportunities that arise from its competitors falling out of the game.

3. Spesific Issues that affect global pricing and how those be taken into account
when setting prices
- Exchange Rates: Exchange rates can significantly impact global pricing. When a
company sells products or services in different countries, they must convert the
price into the local currency. Exchange rates can fluctuate, which can impact the
 company's revenue and profit margins. Exchange rates can have a significant
impact on pricing in Indonesia. Indonesia is an export-oriented country, and many
of its products are sold in foreign markets. When the exchange rate of the
Indonesian rupiah (IDR) against foreign currencies fluctuates, it can impact the
competitiveness of Indonesian products in international markets. If the value of
the IDR appreciates against foreign currencies, it will make Indonesian products
more expensive for foreign buyers. This can reduce demand for Indonesian
products in foreign markets and potentially hurt the country's export earnings.
Conversely, if the value of the IDR depreciates against foreign currencies, it will
make Indonesian products cheaper for foreign buyers, which can potentially
increase demand for Indonesian products and boost the country's export
earnings. Businesses must consider the exchange rate when pricing products for
export. If the local currency is strong compared to the currency of the target
market, it may be necessary to adjust pricing to remain competitive.
- Tariffs and Trade Barriers: Tariffs and trade barriers can impact global pricing by
increasing the cost of importing or exporting products. These costs are often
passed on to consumers, which can make products more expensive in certain
countries. Tariffs and trade barriers can have a significant impact on pricing in
Indonesia. Tariffs are taxes that governments impose on imported goods, while
trade barriers are various measures that governments use to restrict or regulate
trade, such as quotas, licensing requirements, and technical standards. When
foreign governments impose tariffs on Indonesian exports, it increases the cost of
Indonesian products for foreign buyers. This can reduce demand for Indonesian
products in those markets, potentially hurting the country's export earnings.
Similarly, when other countries impose trade barriers on Indonesian exports, it
can make it more difficult and costly for Indonesian businesses to export their
products to those markets. Businesses must consider the exchange rate when
pricing products for export. If the local currency is strong compared to the
currency of the target market, it may be necessary to adjust pricing to remain
competitive.
- Taxes: Taxes can impact global pricing by increasing the cost of doing business
in certain countries. Companies may need to adjust their pricing strategies to
account for taxes in different countries. In Indonesia, taxes such as value-added
tax (VAT), income tax, and import duties can impact pricing. For example,
 businesses in Indonesia are required to charge VAT on their goods and services,
which can increase the final price for consumers. Similarly, income tax on
businesses and individuals can impact the cost of doing business in Indonesia,
which can potentially lead to higher prices for consumers. Businesses must
consider the impact of tariffs and trade barriers on the cost of production and
sales. This can influence pricing decisions, as businesses may need to adjust
pricing to account for increased costs.
- Cultural Differences: Cultural differences can impact global pricing as consumers
in different countries may have different price sensitivities. For example,
consumers in certain countries may be more willing to pay a premium price for
luxury goods, while consumers in other countries may be more price-sensitive.
Businesses operating in Indonesia need to be aware of the cultural factors that
can impact pricing, consumer behavior, and marketing strategies in the country.
By understanding and respecting local cultural traditions and preferences,
businesses can more effectively price their products and appeal to Indonesian
consumers. Businesses must consider the cultural preferences and values of the
target market. This can influence pricing decisions, as businesses may need to
adjust pricing to reflect the perceived value of a product or service.
- Competitors: Competition can impact global pricing by influencing pricing
strategies. Companies may need to adjust their pricing strategies to remain
competitive in different markets. Businesses must consider the pricing strategies
of their competitors. This can influence pricing decisions, as businesses may
need to adjust pricing to remain competitive.
- Regulatory Environment: The regulatory environment can impact global pricing
by imposing pricing controls or restrictions on certain products. Companies may
need to adjust their pricing strategies to comply with local regulations. The
regulatory environment is an important consideration for businesses in Indonesia
when setting prices for their products. By understanding and complying with
relevant regulations, businesses can mitigate the impact of regulatory compliance
on pricing and ensure that they are operating within the bounds of the law.
Businesses must consider the impact of regulations on the cost of production and
sales. This can influence pricing decisions, as businesses may need to adjust
pricing to account for increased costs.
 - Supply and Demand: Supply and demand can impact global pricing as changes
in supply or demand can lead to changes in prices. For example, if there is a
shortage of a particular product in a certain country, prices may increase.
Conversely, if there is an oversupply of a product, prices may decrease.
Businesses must consider the supply and demand of their products or services.
This can influence pricing decisions, as businesses may need to adjust pricing to
meet market demand and ensure profitability.

Overall, businesses should take a holistic approach to pricing in Indonesia

and consider the many factors that can affect pricing. Careful consideration of
these factors allows companies to remain competitive and profitable while setting
prices that reflect the value of their products and services.

4. In co-operative pricing, you match what your competitor is doing. A competitor’s

one-dollar increase leads you to hike your price by a dollar. Their two-dollar price cut
leads to the same on your part. By doing this, you’re maintaining the status
quo.Co-operative pricing is similar to the way gas stations price their products for
example.The weakness with this approach, Dolansky says, “is that it leaves you
vulnerable to not making optimal decisions for yourself because you’re too focused on
what others are doing.”Aggressive pricing“In an aggressive stance, you’re saying ‘If you
raise your price, I’ll keep mine the same,’” says Dolansky. “And if you lower your price,
I’m going to lower mine by more. You’re trying to increase the distance between you and
your competitor. You’re saying that whatever the other one does, they better not mess
with your prices or it will get a whole lot worse for them.”Clearly, this approach is not for
everybody. A business that’s pricing aggressively needs to be flying above the
competition, with healthy margins it can cut into.The most likely trend for this strategy is
a progressive lowering of prices. But if sales volume dips, the company risks running into
financial trouble.Dismissive pricingIf you lead your market and are selling a premium
product or service, a dismissive pricing approach may be an option.In such an approach,
you price as you wish and do not react to what your competitors are doing. In fact,
ignoring them can increase the size of the protective moat around your market
leadership.Is this approach sustainable? It is, if you’re confident that you understand
your customer well, that your pricing reflects the value and that the information on which
you base these beliefs is sound. On the flip side, this confidence may be misplaced,
which is dismissive pricing’s Achilles’ heel. By ignoring competitors, you may be
vulnerable to surprises in the market.

5. Export financing refers to the various financial instruments and mechanisms used to
facilitate and support international trade transactions. Some of the sources of export
financing include:
 - Commercial Banks: Commercial banks offer various export financing instruments such
as pre-shipment finance, post-shipment finance, letters of credit, and bank guarantees to
facilitate trade transactions.
- Export Credit Agencies (ECAs): ECAs are government-backed agencies that offer export
financing products such as export credit insurance, direct lending, and guarantees to
promote exports and protect against the risks of non-payment.
- Multilateral Development Banks (MDBs): MDBs are international financial institutions
that provide financial and technical assistance to support economic development and
poverty reduction in developing countries. They offer financing products such as loans,
guarantees, and equity investments to support international trade.
- Private Export Credit Insurance Companies: Private export credit insurance companies
offer insurance coverage to exporters against the risk of non-payment by overseas
buyers.
- Factoring Companies: Factoring companies offer financing services to exporters by
purchasing their accounts receivable and providing them with immediate cash.
In terms of organization- or market-friendliness, it depends on various factors such as the size of
the exporting company, the creditworthiness of the buyer, the level of risk involved in the
transaction, and the cost of financing.

For smaller exporting companies, commercial banks and private export credit insurance
companies may be the most organization-friendly and market-friendly sources of financing.
These sources of financing are generally easier to access and may offer lower costs of
financing.
For larger exporting companies with more significant transaction volumes, ECAs and MDBs may
be the most organization-friendly and market-friendly sources of financing. These sources of
financing can offer higher loan amounts and longer repayment terms, as well as lower interest
rates.
6. In addition to product, advertising and sales, pricing strategy is an important part of the
global marketing mix. The pricing strategy chosen by a company can have a significant
impact on its overall marketing strategy and influence the perception of its products and
services in the global market. Here are some of the ways your pricing strategy can
influence the global marketing mix. - Product : Pricing strategies can affect the perceived
value of a product or service in the global marketplace. When companies undervalue
their products and services, customers perceive them as inferior or less valuable. On the
other hand, if a company charges a product or service too high a price, it may have
difficulty attracting customers or competing with other products in the market. -
Promotion : Pricing strategies can influence the marketing of the messages and
promotional activities companies use to reach their target audience. For example, if your
business offers discounts or special offers, you can use your promotional message to
emphasize that customers can save money by purchasing your product or service.
Distribution: Pricing strategies can influence the distribution channels that companies
use to sell their products and services in global markets. When companies charge high
prices for their products and services, they may find it difficult to sell through certain
distribution channels such as discount his stores or online his marketplaces. trademark: -
Brand Image : Pricing strategies can also affect a company's overall brand image in
global markets. Companies that offer products and services at higher prices can be
recognized as luxury brands or luxury brands. On the other hand, if a company offers
products or services at a discounted price, the company is recognized as a valuable
brand. Overall, the pricing strategy a company chooses can have a significant impact on
the global marketing mix. By carefully aligning pricing strategies with other marketing mix
elements, companies can develop a cohesive marketing strategy that effectively reaches
and engages global market audiences. In conclusion, pricing strategy is a key
component of the global marketing mix as it can have a significant impact on how a
company's products and services are perceived in global markets. The pricing strategy a
company chooses can affect many aspects of the marketing mix, including product,
advertising, distribution, and brand image. Pricing strategies affect the perceived value of
a product or service in the global market and can affect how a company competes with
other products or services. It may also affect the marketing messages and promotional
activities used to reach target audiences, as well as the distribution channels used to sell
products and services. In addition, pricing strategies can affect how a company is
perceived by customers as a luxury, prestige, or value brand, thus affecting a company's
overall brand image in the global marketplace. It may affect Therefore, businesses
should carefully consider their pricing strategy in combination with other marketing mix
elements to create a coherent marketing strategy that effectively reaches and resonates
with their target audience in the global marketplace.