September 27, 2012
Price is one of the key elements to consider when deciding which products and services to provide and where to sell them (Kotler, & Keller (2006). Companies face several pricing issues when selling products and services abroad. Once a company decides on which country to sell in, it must determine the best mode of entry. Some choices of entry are indirect exporting, direct exporting, licensing, joint ventures, and direct investment. These strategies involve risk, control, and profit potential. In foreign markets some of the barriers to entry are price escalation, gray markets, dumping, and transfer pricing. Price escalation involves the mark up of prices because of transportation expenses, currency fluctuation, and tariffs. An example of price escalation is for instance, a Gucci luggage set sells in France for $500 and the same set sells for $800 in the United States. According to Kotler and Keller (2006), prices may have to be two to five times higher in another country to make the same profit as in the country of origin. By studying the target market, knowing the customer, providing affordable products and services, focusing on the competition, and evaluating entry costs, Kudler Fine Foods can determine an accurate pricing structure. This will allow Kudler to continue to capture the market share in the specialty food industry and increase their competitive advantage. To remain profitable and competitive in the specialty foods market Kudler fine foods must stand out by using brand imaging and continue to build strong customer relationships. Another strategy is to use a traditional pricing structure but collaborate with the customer to meet his or her needs by offering made to order products (Bertini & Gourville (2012).
Bertini, M., & Gourville, J. T. (2012). Pricing to Create Shared Value. Harvard Business Review, 90(6), 96-104. Kotler, P., & Keller,...