Note: This blog is sorta marketing-related and less frequently updated than other blogs that I author.
If you are more of a techy-geek than a marketing wizard then cre8ive hut
will be much interesting for you.
Volkan.
Volkan.
12.21.2005
Considerations for Setting a Price
There are several considerations for setting a price for the global market:
1. Does the price reflect the product's quality?
2. Is the price competitive given the market conditions?
3. What types of discounts/allowances should be offered to international customers?
4. Should the firm pursue market penetration, market price skimming or some other pricing objective?
5. Should prices differt with market segments?
6. Are the firm's prices likely to be viewed by the host country government as reasonable or exploitative?
7. What pricing options are available if the firm's costs increase or decrease?
8. Is the demand in inernational market elastic or inelastic?
Besides one should note the following:
Gray Market Products
These are the trademarked products which are exported from one country to another where they are sold by unauthorized persons or organizations. (such as smuggling Bulgarian produced Marlboros' in Turkey in '80s.)
This occurs when products are in short supply or when producers use skimming strategies in some markets.
Dumping
Sale of an imported product at a price lower than the normally charged in a domestic market or country of origin.
Transfer Pricing
1. Does the price reflect the product's quality?
2. Is the price competitive given the market conditions?
3. What types of discounts/allowances should be offered to international customers?
4. Should the firm pursue market penetration, market price skimming or some other pricing objective?
5. Should prices differt with market segments?
6. Are the firm's prices likely to be viewed by the host country government as reasonable or exploitative?
7. What pricing options are available if the firm's costs increase or decrease?
8. Is the demand in inernational market elastic or inelastic?
Besides one should note the following:
Gray Market Products
These are the trademarked products which are exported from one country to another where they are sold by unauthorized persons or organizations. (such as smuggling Bulgarian produced Marlboros' in Turkey in '80s.)
This occurs when products are in short supply or when producers use skimming strategies in some markets.
Dumping
Sale of an imported product at a price lower than the normally charged in a domestic market or country of origin.
Transfer Pricing
Is the pricing of goods, services and intangible property bought and sold by operating units or divisions of a company doing business with an affliate in another jurisdiction (for example Toyota susidiaries sell to, and buy from each other).
