1 / 9

Factors Affecting International Pricing…

Welcome to class of International Pricing by Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada s.singh@uwinnipeg.ca http://abem.uwinnipeg.ca www.abem.ca/conference. Factors Affecting International Pricing…. Inflation Exchange Rate Fluctuations

norbertoc
Télécharger la présentation

Factors Affecting International Pricing…

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Welcome to class of International PricingbyDr. Satyendra SinghProfessor, Marketing and International BusinessUniversity of WinnipegCanadas.singh@uwinnipeg.cahttp://abem.uwinnipeg.cawww.abem.ca/conference

  2. Factors Affecting International Pricing… • Inflation • Exchange Rate Fluctuations • Parallel Imports • Price Escalation • Government Influences

  3. Factors Affecting International Pricing… • Inflation • Eliminates consumer’s purchasing power • Inflation  • Adjust price  • Delayed payment will erode profit • Problem with consignment basis shipment I.e paid when sold • Strategy • Careful price quotations and supply contracts • Increase brand value • Retain and win trust of customers

  4. Factors Affecting International Pricing… • Exchange Rate Fluctuations • It fluctuates • Govt. may intervene if too much fluctuations • Weak currency  export and vice-versa • Monitor other currencies movement also • Strategy • Review entire operation system • Adjust cost structure • Increase brand value • Check mode of operation in foreign markets • Exports vs. licensing vs. investment

  5. Strategies Under Varying Currency Conditions Source: S. Tamer Cavusgil, “Unraveling the mystique of export pricing,” Chapter 71 in Sidney J. levy, George R. Frerichs and Howard l. Gordon (eds), The Dartnell Marketing Manager’s Handbook (Chicago: Dartell Corporation, 1994), Figure 2, p. 1362.

  6. Factors Affecting International Pricing… • Parallel Imports • Distributors in one country sell in another country • Not illegal • Overstocking • Distributor bankrupt • Exclusive distributors, luxury products, upscale retailers, margin  • Internet I.e. inexpensive music CDs Italy… • Drugs/medicine Canada USA • Strategy • Self-certify the product! • Language, packaging • For sale in specific country only • Product is not suitable for another country e.g. too sweet/color • Warranty/repair not transferable between countries • Close relationship with distributors

  7. Factors Affecting International Pricing… • Price Escalation • A direct result of products moving across borders • Manufacturers Importers Distributor  Jobber  Consumer • Import duty (Fixed/unit, Valorem/values of goods x%, both $1 per unit + x% of its value), VAT, PST/GST • Operating costs  • Additional transportation costs • Two distributors: high lot and low lot • Insurance, packaging, country of origin, other admin. costs • Strategy • Move to low cost manufacturing countries • Lower distribution costs • Lower features and lower quality • Re-classification of the product to save on duty (art vs. jewellery) • Adjust dimension (shoes less thick, larger containers)

  8. Causes and Effects of Price Escalation Source: CIF Cost, Insurance, Freight, The exhibit assumes that all domestic transportation costs are absorbed by the exporter. Just for illustration purposes.

  9. Factors Affecting International Pricing… • Government Influences • Reduces the impact of price competition or eliminate it • Keeps retail margins below exorbitant level • Correlation between car-owners and superstores visits • Maximum/suggested retail price • Limited period of discount  EU Feb & Aug. • Wal-mart Everyday Low Price (EDLP) i.e., No discount • Displaced sales • Strategy • North American Approach • Govt creates environment conducive to conducting business • Adjusting interest rate • Monitoring the market to prevent abuses • Canada Competition Bureau • Cocoa, coffee, sugar, wheat  Board

More Related