MOD International Marketing. Lecture 11 Pricing for international markets

Transcription

1 MOD International Marketing 1

2 Lecture 10: Pricing for international Skimming v penetration strategies Factors influencing international pricing Factors influencing price escalation Stages of pricing strategies Factors influencing international pricing decisions Standardisation v adaptation Countertrade Dumping 2

3 Skimming v Penetration strategies in marketing 3

4 Factors influencing international pricing 4

5 Stages of Pricing strategies Analysing the influencing factors Determine the impact of Corporate strategy on pricing policy Evaluate strategic pricing options Implementing the strategy What is Price? Price = The intangible + tangible value of a product or service Managing/reviewing Prices 5

6 Factors affecting International Pricing Decisions Company and product factors Corporate and marketing objectives Firm and product positioning Product range, life cycle, substitutes, product Differentiation and unique selling propositions Cost structures, manufacturing Marketing, product development 6

7 Factors affecting International Pricing Decisions Market Factors Consumer s perceptions, expectations and ability to pay Need for product adaptation, market servicing, market structure, distribution channels, discounting pressure Market growth Need for credit Competition objectives, strategies and strength 7

8 Factors affecting International Pricing Decisions Environmental factors Government influences and constraints (remember government can offer support e.g. financial + create barriers e.g. high tariffs Currency fluctuations Business cycle stage, level of inflation Use of non-money payment 8

9 Pricing (Standardisation/Differentiation) Reasons for Differentiation: - Strength of competitors - Consumer preferences - Average industry prices - Positioning strategy Reasons for Standardisation: - Presentation of a consistent image across - May reduce grey - May appeal to very large customers 9

10 The Commodity Slide High Branded Price differentiation Commodity Low High Product/image differentiation Time WEEK /9 Low 10

11 Counter-trade A form of non-financial exchange Examples of transactions: 1. Barter 2. Compensation deal 3. Buy-back agreement 11

12 Transfer Pricing Prices charged for intracompany movement of goods and services Three approaches to transfer Pricing: 1. Transfers at cost plus 2. Transfer at arm s length 3. Transfer at cost 12

13 Dumping Exporting a product at a price lower than is charged in the domestic market Examples: (entering U.S. market) Hitachi (phones, 1985); Toshiba (phone systems, 1989); Samsung (TVs, 1980 s) 13

14 Dumping and Export Marketing Objectives Type of Dumping Cyclical Dumping Defensive dumping Export marketing objectives To maintain export sales during periods of slack demand To deter entry by other competitors Early arrival dumping Strategy driving at market leadership in a newly-invented product Head-on dumping Predatory dumping Accidental dumping Source:Kostecki, M (1991) EJM Pricing strategy designed to attack a market leader in a export market Strategy intending to establish a monopoly in a foreign market No deliberate intention to engage in an aggressive export pricing 14

15 Next week Read: Ghauri and Cateora (2010) Ch.18, pp