Matakuliah : J0474 International Marketing
Tahun
: 2009
Pricing for International Markets
Chapter 15
Learning Outcome
• Pricing Policy
• Approaches to International Pricing
• Price Escalation
• Approaches to Reducing Price Escalation
• Leasing in International Markets
• Counter trade as a Pricing Tool
• Transfer Pricing Strategy
• Price Quotations
• Administered Pricing
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Pricing Policy
Pricing Objectives
In general, price decisions are viewed two ways :
Pricing as an active instrument of accomplishing
marketing objectives
Pricing as a static element in a business decision.
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Pricing Policy
How Gray-Market Goods End Up in U.S. Stores
Manufacturer
Buyer X
Freight
Forwarder
U.S. Store
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U.S. Store
Fake
Paperwork
U.S. Store
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Approaches to International Pricing
Full-Cost
Versus
Variable-Cost Pricing
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Skimming
Versus
Penetration Pricing
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Price Escalation
Taxes, tariffs and
Administrative cost
Exchange rate
fluctuations
Costs of Exporting
Deflation
Varying currency
values
middleman
And
Transportation costs
inflation
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Approaches to Reducing Price Escalation
Lowering
Cost
Of Goods
Lowering
Distribution
costs
Lowering
Tariffs
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Dumping
Using
foreign trade zones
to lessen
price escalation
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Leasing in International Markets
The system of leasing used by industrial exporters is similar to
the typical lease contracts used in the United States.
Terms of the leases usually run one to five years, with payments
made monthly or annually; included in the rental fee are servicing,
repairs, and spare parts.
Just as contracts for domestic and overseas leasing arrangements
are similar, so are the basic motivations and shortcomings.
For example :
1.
Leasing opens the door to a large segment of nominally financed
foreign firm that can be sold on a lease option but might be
unable to buy for cash.
2. Leasing helps guarantee better maintenance and service on
overseas equipment.
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Counter trade as a Pricing Tool
Types of Counter trade
The internet and
Counter trading
Problems of Counter trade
Proactive Counter trade strategy
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Counter trade as a Pricing Tool
Why Purchasers Impose Counter trade?
•To preserve hard currency
•To improve balance of trade
•To gain access to new markets
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•To upgrade manufacturing capabilities
•To maintain prices of export goods
•To force reinvestment of proceeds
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Transfer Pricing Strategy
Four arrangements for pricing goods for intra company transfer :
•
Sales at the local manufacturing cost plus a standard mark up
•
Sales at the cost of the most efficient producer in the company plus
a standard mark up
•
Sales at negotiated prices.
•
Arm’s-length sales using the same prices as quoted to independent customers.
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Administered Pricing
Cartels
Government
-influenced
pricing
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Summary
• Pricing is one of the most complicated decision areas
encountered by international marketers. Market prices at
the consumer level are much more difficult to control in
international than in domestic marketing, but the
international must still approach the pricing task on a
basic of established objectives and policy, leaving
enough flexibility for tactical price movements.
• The continuing growth of third World markets coupled
with their lack of investment capital has increased the
importance of counter trades for most marketers.
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