Text-for-export-pricing-strategies-of-multinationals.doc

Topic 3 Export Pricing Strategies of Multinationals Factors in Export Pricing E xport pricing is not a topic that lends itself easily to generalization. As with domestic pricing, any consideration of policies for setting export prices must first address the unique nature of the individual firm. Company philosophy, corporate culture, product offerings, and operating environment all have a significant impact on the creation of pricing policy. In addition, export marketers face unique constraints in each market destination. PartⅠ Text Export Pricing Strategies Another key element in the export marketing mix is the pricing policy-a marketing tool that could enable a firm to attain the planned sales objectives and other goals in its target export markets. Pricing policy plays a key role in the firm’s competitive position in its export markets. Pricing decisions always involve a consideration of complex factors since pricing strategies can affect the firm’s promotion and distribution efforts. Pricing decisions in the export market are especially complex because they have to interrelate also with consideration of the foreign cultural, political, and social environment. There are special factors that affect export pricing that are not normally part of domestic pricing, import duties for example.As part of its pricing policy, the firm has to decide who pays for the local import duties on the firm’s products. The firm may decide to pass all of the duties on to the consumer, or it may absorb all of the duties into its profit margin, or it may split the duties between the consumer and the firm. 8.The decision on how the firm treats import duties should also take into account the firm’s competitive position and its competitors’ prices, as well as the firm’s price level in relation to its sales objective. Other special considerations in export pricing include non-tariff barriers such as local taxes on imported goods, and national preference laws or campaigns, such as “buy Can