Price Policy

Topics: Pricing, Marketing, Price Pages: 7 (2393 words) Published: November 25, 2010
The purpose of this essay is threefold. First,to identify specific factors and the environment affecting an export price policy. Second, to analyse thisthese factors within our firm and to extract the best decisions given our starting point. Finally, to consider the above and to give guidelines governing thatwhat should be applied in the international marketing price. It should be noted that in some cases due to an information deficiency, assumptions should be madee.

“Pricing is the moment of truth” (Stottinger,2001). Probably this affirmation is essentially valid in domestic marketing, even more in international marketing. Surprisingly, the literature in this area is characterized by a gapthere is a gap in the literature in this area. Given theirits importance, pricing havehas not attracted much academic research interest compared with other tools of marketing (Stottinger, 2001). Nevertheless, this should not be and cannot be a barrier for the quality of this essay.

Albaum and Duerr (2008) no havehave not given a clear message regarding the level of difficulty about practice of establishing an international price. However, for a large influx of authors export price differs from domestic price, and due to thatthis the environment is sui generis in each country (Jain, 1989).It is the writer´s opinion that an overview of the challenge gives the impression that it is somewhat more difficult than in domestic marketing. Sometimes the pricing affair is too tangled to be pliant to a general sort of description (Diamantipoulous and Mathews, 1995). In summary, despite of finding similar market threats in the international “arena”, every market havehas non-identical consequences and a “constellation”of elements (Kublin,1900).

All of this leads to talk of international factors affecting pricing. The goal is to analyze the factors and bring them in line with our product. Sometimes these factors are so-called such aslabelled “Internal” and “External” factors (Tellis, 1986). The writer’s intention is not to follow the system of any author concretely and to blend the most important literature and match with the firm. To avoid excessive interminable details, these factors are exclusively factors that differ from domestic factors, or factorsthose such as competition, or buyer’s perception that are present in the domestic market but now are completely unknown in the new scenario.

Cost has been and is being one of the most vital factors affecting price determination (Albaum & Duerr, 2008). It is useful because the system cost creates a limit where prices below are not permitted to stayit creates a system where prices are not permitted to stay below a certain limit. (Simon,1995). Historically, the quandary is somewhere between direct cost and full cost. The choice of the cost floor depends on the company's goal. In the futureLater the company'sthis goal will be explained, but so far, it is enough to say that full costs fits better. The company objectives are to build a new market in the long-run, and using full cost enabling the company to recovered all the cost.. Apart from a “new” packaging, the new central cost is based on transportation. It is important to take into account theat volume of the product when consideringis another important costs. (Albaum & Dueer). In some cases companies fail due to only takinge into account this factor (Backman, 1953). It given that should we mightis essential that we emphasize other factors.

Market conditions: it is time to analyze demand. An important idea of our demand is the concept of elasticity. Should I give as done thatThe elasticity of our customer tends not to be inelasticgreat. A pPerson who owns a pedigree dog or an exotic animal, tends to give allwant the best for their animals, and consequently are less price-sensivitysensitive (or there is less price sensitivity). Broadly speaking, they buy regardless of price, but always in the limits of consumer´s price awareness. "The...
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