Export Prciing

Chapter 10
International Pricing
International Marketing
Chapter-10 International Pricing
Objectives
What determines export prices

What are the objectives of pricing
What factors affect pricing
what are the approaches in export
pricing
What is transfer pricing
What is dumping
What are the steps involved in pricing

What are the steps in retrograde pricing
What are export price quotation and
incoterms
What are the information requirements
of export pricing
Introduction
Right price is one of the important

determinants of business success.
The uniqueness of price in the
marketing mix is that it is the only
element that generates revenue.
At the outset one may think that price
must cover at least the full cost of
production and marketing.
Types Of Costs In Export

Marketing
1.
2.
Production costs
Selling and delivery costs
Productions Costs
1.
2.
Fixed costs
Variable costs
Pricing Objective
1.
2.
3.
4.
5.
6.
7.
Market penetration
Market share
Market skimming
Fighting competition
Preventing new entry
Shorten pay-back period
Early cash recovery
8.
9.
10.
11.
12.
Meeting export obligation

Disposal of surplus
Optimum capacity utilization
Return on investment
Profit maximization
Factors Affecting Pricing
International marketing objective

Costs
Competition
Product differentiation
Exchange rate
Market characteristics
Image
Government factor
Cost Based Pricing
Cost based pricing, also known as cost plus

pricing, is a common method of pricing.
Under this method the price includes a
certain percentage of profit margin on the
sum total of the full cost of production,
marketing costs and an allocation of the
overheads.
That
is,
price=(fixed
costs+variable
costs+overheads+marketing
costs)+
specified percentage of the total costs
Market Oriented Pricing
This is a very flexible policy in the sense

that it allows the prices to be changed in
accordance with the changes in market
conditions.
The product may be priced high when
demand conditions are very good and the
price may be lowered when the market is
sluggish if that helps increasing sales.
This method is sometimes referred to as
what the traffic will bear method.
Break Even Price
Break-even price is the price for a given level

of output at which there is neither any loss
nor profit.
Break-even analysis helps to understand the
minimum sales required to avoid any loss and
also the profit or loss at various levels of
sales.
The break-even point(BEP) is the point of
sales at which there is neither any loss nor
any profit.
Calculation Of BEP In Terms

Of Physical Units
BEP = FC
FC
SP-VC
C
Where
FC = fixed cost
VC = variable cost
SP = selling price
C = contribution per unit ( C=SP-VC )
Marginal Cost Pricing
Marginal cost pricing approach is

common in evaluating the profitability
of new orders in case of firms with
excess capacity.
Under the marginal cost pricing, the
relevant cost considered for pricing is
the variable cost, the fixed cost is
excluded from the calculation of the
cost of the product.
Creative Pricing
Marginal costing may give scope for

creative pricing.
Creative
pricing
means
taking
advantage of the flexibility between the
lower limit of break-even price and the
upper limit of the competitors price for
similar product.
Transfer Pricing
Transfer pricing or intra company pricing

refers to the pricing of goods transferred
from operations or sales units in one
country to the company s unit elsewhere.
The appropriate basis for intracompany
transfers often depends on the nature of
the subsidiaries, the market conditions and
government policies and regulations.
Some studies show that, in most cases,

setting up transfer prices remains the
absolute prerogative of the parent
company executives regardless of the
firms nationally.
Steps In Pricing
1.
2.
3.
4.
5.
Defining pricing objectives

Analyzing market characteristics
Calculating costs
Calculating value of incentives
Determining export price
Export Price Quotations And

Incoterms
EXW EX WORKS
FCA Free carrier
FAS Free Alongside Ship
FOB Free On Board
CFR Cost And Freight
CIF Cost, Insurance and Freight
CPT Carriage Paid To
CIP Carriage and Insurance Paid To

DAF Delivered At Frontier
DES Delivered Ex Ship
DEQ Delivered Ex Quay
DDU Delivered Duty Unpaid
DDP - Delivered Duty Paid
Documents Required Under

Various Terms
EXW Ex Works
FCA Free Carrier
FAS- Free Alongside Ship
FOB Free on Board
CFR Cost and Freight
CIF Cost, Insurance and Freight
CPT Carriage Paid to
CIP Carriage and Insurance Paid to

DAF Delivered at Frontier
DES Delivered Ex Ship
DEQ Delivered Ex Quary
DDU Delivered Duty Unpaid
DDP Delivered Duty Paid
Information Requirement For

Export Pricing
Information
Information
Information
Information
Information
Information
on
on
on
on
on
on
the total market

competition
prices
Government policies
production and costs
revenue and profits
Summary
There are two types of cost in export

marketing; production costs and selling and
delivery costs.
The factors which affect pricing policies are;
international marketing objective, costs,
competition,
product
differentiation,
exchange rate, market characteristics, image
and government factors.
Cost is one of the most important factor in
export pricing besides supply conditions and
demand and competitive conditions.

Export Prciing

Diunggah oleh

Informasi Dokumen

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Export Prciing

Diunggah oleh

Hak Cipta:

Format Tersedia

Chapter 10

What determines export prices

What are the steps involved in pricing

Right price is one of the important

Types Of Costs In Export

Meeting export obligation

Factors Affecting Pricing

International marketing objective

Cost Based Pricing

Cost based pricing, also known as cost plus

Market Oriented Pricing

This is a very flexible policy in the sense

Break Even Price

Break-even price is the price for a given level

Calculation Of BEP In Terms

Marginal Cost Pricing

Marginal cost pricing approach is

Marginal costing may give scope for

Transfer pricing or intra company pricing

Some studies show that, in most cases,

Defining pricing objectives

Export Price Quotations And

CIP Carriage and Insurance Paid To

Documents Required Under

CIP Carriage and Insurance Paid to

Information Requirement For

the total market

There are two types of cost in export

Anda mungkin juga menyukai