EXPORT PRICING

 Price fixed for the export product or

services which the exporter intends to
sell in the overseas market is called
export pricing.
 Export price of a given product is
determined by many factors. There
are a number of methods used for the
purpose of costing in exports.
CONTENT :
 EPI(Export Price Index)
 OBJECTIVE
 TOP 5 MAKE/BREAK ASPECTS OF EXPORT
PRICING
 IMPORTANCE
 LAGREST EXPORTERS
 PRICING METHODS AND MEASURES
 EXPORT PRICING STRATEGIES
EXPORT PRICE INDEX
 The export price index (EPI) tracks changes in
the price which firms and countries receive for
product they export

 increase in the EPI are typically due to song

foreign demand or higher internal costs within
the exporter’s country.

 Generally , only increase caused by strong

foreign demand are beneficial. However ,the
overall effect of such increase is debatable .
Objective :
 SURVIVAL - An exporters faces competition
not only from his fellow- exporters,but also
from other country exporters .In much
competitive markets,one of the marketing tools
which can make the exporter survive the
competition is pricing.

 MARKET SALES GROWTH - an exporter

survives the competition, the objective shifts to
having maximum sales growth . Depending
upon competition and sensititvity of market to
price, the final pricing decison needs to be
taken.
 MAXIMUM CURRENT PROFIT - An exporter
may determine his object of securing maximum
profit .A price which would generate such a
profit is to be established . For this purpose, it is
necessary to have complete information of cost
and a demand.

 ESTABLISHING RELATIONSHIP - Another

objective behind pricing is to establish not only
a superior quality image , but also emphasize
on leadership or number one position in the
export market
TOP 5 MAKE/BREAK ASPECTS OF
EXPORT PRICING
 Cost of the product

 Competition

 Supply VS .Demand

 Government offered Incentives

 Branding and Reputation

Importance
 The volume of the sales and market demand
depends on pricing policy .

 Competitive capacity in foreign market depends on

pricing policy.

 It decides the success and failure of export effort .

 Export pricing builds goodwill in the market

 Export pricing helps in capturing foreign market

 Develops brand image and product differentiation .

Largest Exporter
 ‘INDIA is the world’s largest producer
and consumer and Exporter of spices ;
 The country produces about 75 of the
109 varieties listed by the international
organisation of standardization (ISO
 Total spices exports from INDIA stood at
1.08 billion kgs.
 Valued at US $3.11billion in the year
2017-18
King of spices
 Top importers of INDIAN
spices between Apr-Oct
2018 .

 US, CHINA
,VIETNAM,HONG KONG
,BANGLADESH,THAILA
ND,UK ,UAE, MALAYSIA
AND SRILANKA

Cumin ,turmeric chilli etc

China , US ,and Germany are the world’s leading exporter
Top three world’s Exporter
 China was far by the world’s leading
exporter and the exporting goods
valued at 1,990,000,000,000

 Second one is US $1,456,000,000,000

 And the third one is GERMANY is

1,322,000,000,000
Largest exporters manufacturing
;
CHINA ; The Country’s growth expanded
consistently but, China transitioning into a
consumption based economy which may
change the overall undercurrents of the
chinese economy soon .

US ; The largest exports of the united states

are Cars , Refined petroleum , Planes ,
Helicopter , spacecraft and
Pharmaceutical.
major trading partners are Canada , China
and Mexico .
 Germany ;which is also home to one of
the world’s largest economies . The
goods exported from Germany had a
value of around 1.5 trillion US $,exports
goods are automobiles , machinery,
chemicals, electronics, electrical
equipment etc
Pricing method and measure
 Cost-plus pricing - setting the price at the
production cost plus a certain profit margin.
 Target return pricing - setting the price to
achieve a required/specific target return-on-
investment (ROI).
 Value-based pricing - basing the price on the
effective value to the customer relative to other
competitive products in the export market.
 Psychological pricing - basing the price on
factors such as levels of product quality,
popular price points for the product in
question, and what the customer perceives to
be fair and just price for the product.
 Loss-leader pricing - operates on the
basis of losing money on certain very low
priced advertised products to secure
customer interest, so that they will buy
other products at a more profitable level.
 Flexible-pricing policies - offer the same
product to customers at different
negotiated and contracted prices e.g. cars
are typically sold at negotiated prices, while
many business to business (B2B) sales are
also depend on negotiated contracts.
Export pricing strategy
 Penetration pricing strategy - pursues the objective of
quantity maximization by means of a low price. A low
initial price is set in order to penetrate the market quickly,
while it can also discourages competitors from entering
the market. It is an approach that can be used when
many segments of the market are price sensitive.

 Skimming pricing strategy - attempts to skim the cream

off the top of the market by setting a high price for the
product and selling to only those customers that are less
price sensitive. Initially these customers can be charged
a high price, then the prices are lowered to skim off the
next layer of buyers, etc. Eventually, the price will drop as
the product matures and competitors offer lower prices.
 Follow the leader pricing strategy- A follow the
leader pricing is a pricing strategy in which a player
in the particular market tries to follow the pricing
strategy of the most dominant player in that segment
i.e. if the leader increases the price of good to a
particular level the player also increases the price of
its good to that level and vice versa.

 Differential pricing strategy - The Differential

Pricing is a method of charging different prices for
the same type of a product, and for the same
number of quantities from different customers based
on the product form, payment terms, time of delivery,
customer segment, etc.
 Incremental cost pricing - It is the method of
pricing a product based on incremental cost. In this
type of pricing, the selling price of a product is
determined by the variable cost, and not kept
according to the overall cost of creating the product.
Incremental cost is the cost of creating additional
products from the same setup (i.e. R&D, factory,
machinery being same as used for other products),
i.e. the fixed cost remains same, and the selling price
of the product thus generated is based mainly on the
variable cost.