export prices on ex-works price level and add a certain percentage of profit and other expenses depending upon

the term of delivery. Full cost pricing most common pricing approach used by exporters in the initial stages of their internationalization. It includes adding a mark up on the total cost to determine price. Marginal cost pricing marginal cost is the cost of producing and selling one more unit. It sets the lower limit to which a firm can reduce this price without affecting its overall profitability. Market based pricing as market leader fix the price, in developing countries are marginal suppliers of goods in most markets, they rarely have market shares large enough to influence price in international market.

4. List out the factors influencing the pricing decision in international market. 1. Cost 2. Competitions 3. Irregular or unaccounted payments in export 4. Purchasing power 5. Buyers behavior 6. Foreign Exchange Fluctuations 7. Product differentiation 8. Market characteristics Eg; Demand trends, Consumer income level, trade characteristics like trade margins 9. Image of the company 10. Government factors like tax, subsidies, incentives, exemptions

5. Discuss the terms of pay method in International transaction.

The major terms of payment used in international markets are as follows. Advance payment Payment is remitted by the buyer in advance either by a draft mail or TT (Telegraphic transfer). Generally, such payments are made on the basis of sample receipt and its approval by the buyer.