Chapter 14 Pricing Strategies and Tactics

Chapter 14Pricing Strategies and Tactics

Price Dynamics• Price• • Competitive tool

• • Pricing decisions

Price Dynamics

• The alternatives strategies for first-time pricing are:• Skimming:

• Market pricing:

• Penetration pricing:

Price Dynamics

• Price changes occur when • • •

• In multiple-product pricing, items are priced indicating:• • •

The Setting of Export Prices

• Factors to be considered while establishing the basic premise for pricing: •

• Export pricing strategy• Standard worldwide price:

• Dual pricing:

• Cost-plus method:• Marginal cost method:

• Market-differentiated pricing:

• Export-related costs: Exist along with the normal costs • Include:

• • •

The Setting of Export Prices• Price escalation:

• Value-added tax (VAT):

The Setting of Export Prices• Methods that focus on cost cutting are:

• • • •

Terms of Sale

• Incoterms:

Terms of Payment

• Exporter’s credit policy determines:•

• Factors for negotiating terms of payment:• • • • •

Terms of Payment

• Cash in advance:

• Most favorable term to the exporter • Letter of credit:

• • •

Terms of Payment

• Draft:

• Documentary collection:

• Shipping documents and the draft are presented to the importer through banks acting as the seller’s agent

Terms of Payment• Banker’s acceptance:

• Discounting:

• Open account:

Terms of Payment• Consignment selling:

• Most favorable term to the importer

Getting Paid for Exports

• Commercial risk:

• Commercial defaults result from:• • • •

• Political risk:

Getting Paid for Exports• Factors that complicate the assessment of

a foreign private buyer:• • • • • •

Managing Foreign Exchange Risk• Approaches to protect against currency

related risks:• •

• Forward exchange market:

• At which it will buy the foreign currency the exporter will receive when the importer makes payment

Managing Foreign Exchange Risk

• An option:

• Currency futures market:

• Minimum transaction sizes are smaller on the futures market

• Techniques to adjust pricing in view of either a more favorable or an unfavorable domestic currency rate:• Pass-through:

• Absorption:

• The goal is long-term market-share maintenance in a highly competitive environment

• Pricing-to-market:

• Other adjustment strategies• • •

Sources of Export Financing

• International marketers assist customers abroad in securing appropriate financing

• Export financing terms affect the final price paid by buyers

• Commercial banks• • •

• Forfaiting and Factoring• Forfaiting:

• The importer pays the exporter with bills of exchange or promissory notes

Sources of Export Financing• Benefits to the exporter are:

• • • •

• Factoring houses:

• Provide the exporter with complete financial package –

• Official trade finance –

Sources of Export Financing• Advantages of trade financing:• • • • • •

Leasing

• Leasing companies develop new value-added services • •

• Lessors have evolved into partners in business activities

Pricing within Individual Markets

• It is determined by:• Corporate objectives:

• Costs: Used as a basis for price determination• Include

• Customer behavior and market conditions: Demand sets a price ceiling• Price elasticity of consumer demand:

Pricing within Individual Markets• Market structure:

• Environmental constraints• • •

Pricing Coordination

• Necessary in regional markets such as the European Union

• Important with more global and regional brands in the global marketer’s offering

• Has to be on worldwide basis as parallel imports surface in markets in which price discrepancies exist

Transfer Pricing

• Pricing of sales to members of the extended corporate family

• Has to be managed in a world characterized by:• • • •

Transfer Pricing

• Establish the appropriate transfer price to achieve the following objectives:• • • • • •

Transfer Pricing

• From a company-wide perspective:• • •

• Can be based on costs or on market prices

• Allows the company to repatriate revenues

Transfer Pricing

• International transfer pricing objectives leads to conflicting objectives when: •

• Three philosophies of transfer pricing have emerged over time:

• • • Arm’s-length price:

Transfer Pricing

• Transfer pricing challenges• Performance measurement

• •

• Taxation• External -

Countertrade

• Countertrade: Conditions that support business activities are:• • • •

Countertrade

• Countertrade transactions are beneficial•

• Use of countertrade• •

Countertrade

• Excellent mechanism to gain entry into new markets

• Provides stability for ________ sales• Under certain conditions, it ensures the

quality of an international transaction

Chapter 14 Pricing Strategies and Tactics

Documents

Pricing product-pricing-strategies

Strategies and Tactics in Organic Synthesis, Volume 7 (Strategies and Tactics in Organic Synthesis)

MARKETING STRATEGIES AND TACTICS MARKETING STR S ….… · marketing strategies and tactics strategies and tactics exhibi exhibi tion planning tion sales oper at ions housing and

Pricing Strategies

FSFC Strategies _ Tactics II

Research Strategies & Tactics

#4 Pricing Strategy & Tactics

The Strategy and Tactics of Pricing 2002

Pricing Strategies and Tactics Chapter Seventeen

Pricing Strategies LECTURE-17. New-Product Pricing Strategies Product Mix Pricing Strategies Price Adjustment Strategies Price Changes Public Policy and

Chapter 26 Pricing Strategies - · PDF fileChapter 26 Pricing Strategies •Section 26.1 Basic Pricing Policies •Section 26.2 Strategies in the Pricing Process

Pricing Strategies and Tactics Chapter Twenty. Objectives bIdentify various pricing strategies bDiscuss differential pricing strategies bDescribe skimming

Pricing Strategies & Tactics

Marketing strategies and tactics

STRATEGIES AND TACTICS

Retail Pricing Strategies and Tactics...Price-Adjustment Strategies Price-Adjustment Strategies • Discount and allowance pricing • Segmented pricing • Psychological pricing •

Conflicts: Strategies and tactics

Pricing Products - Pricing Considerations & Strategies

Tactics and Strategies - Coquitlam Little League Strategies...Tactics and Strategies 179 I t is important for players of all ages to learn the fundamental tactics and strategies of

Exploration of Pricing Strategies in North Cyprus Hotels · The task of pricing policy in the hospitality industry is associated with the development of strategies and tactics of