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Task Eight International Pricing Strategies I Pricing Considerations forInternational Marketing 1. Importance of Pricing in International Marketing First, price is the bridge connecting a company’s expenses with its revenues. Second, price can serve as an indicator of a product’s value. 2. Factors Affecting International Pricing 2.1 Internal Factors 2.1.1 Corporate Factors (1) Marketing Objectives Profit Maximization Market Share Expansion---Look at Mini-Case 8.1 Return on Investment (2) Production Costs (3) Transportation Costs (4) Overseas Distribution Costs 2.1.2 Product Factors (1) Product Value and Positioning (2) Stage of Product Life Cycle—Look at Mini-Case 8.2 2.2 External Factors 2.2.1 Environmental Factors (1) Taxes (2) Financial Risks 2.2.2 Market Factors Supply Demand Competition Look at Mini-Case 8.3 II The International Market Pricing Approaches When launching new products or adjusting existing pricing strategies, international marketers will use different pricing approaches. 1. Cost-Based Pricing Fixed costs refer to those which do not vary with the quantity of products. The equipment, buildings, rent and management salaries all belong to this category. Variable costs mean costs that change with the quantity produced, such as raw materials and components. Target Profit Pricing In this approach, companies predict the production quantity and sales volume, and then estimate total costs. Lastly, according to the set profit, the companies calculate the price to guarantee the desired profit. 2. Market-Orientated Pricing Market-orientated pricing method considers relevant market elements rather than the sellers’ costs as the base to set the price. 2.1 Perceived-Value Pricing 2.2 Reverse Pricing 2.3 Discrimination Pricing Time Pricing Location Pricing Customer-Segment Pricing Product-Form Pricing 3. Competition-Orientated Pricing Going-Rate Pricing Competitive Pricing Skill Training 8.1 Can you give some examples of the products that u
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