Falling trade barriers between national markets, the rise of newly industrialized countries and technological changes have affected the structure of international markets and imposed new challenges on the international business environment.
The bases of competition within many markets are changing so much that the opportunities to survive with purely domestic strategies are becoming limited.
One of the implications of these developments is that the efforts of many international firms to maintain profits by reducing costs or increasing production quantities has reached a limit in many markets. Therefore a lot of managers are concentrating more
and more on another determinant of profit: pricing. Indeed, a good pricing management is able to increase profits and liquidity, and therefore shareholder value.
While achieving economies of scale through their global operations, companies still have to act locally. The increasing importance of the price suggests that traditionally simple methods (e.g. cost or competition related pricing) are not enough to meet the
requirements anymore. As a consequence, more comprehensive pricing strategies have to be developed in order to still be successful in future.
When defining a global pricing strategy, international firms should consider several determinants that influence pricing decisions in international markets. The following paper takes a closer look at the different significant determinants required to set up a global pricing strategy as well as the different pricing strategies that can be used to
reach the determined goals. In order to visualize aspects of the pricing process, practical examples are used to help to understand the importance of different elements within pricing management.
Table of Contents
- 1. Introduction
- 2. Factors in international pricing management
- 2.1 External factors
- 2.1.1 Governmental Regulations and Legal Environment
- 2.1.2 Demand and Economic Environment
- 2.1.3 Market Conditions and Competitive Structure
- 2.1.4 Distribution Infrastructure
- 2.1.5 Inflation and Exchange Rates
- 2.1.6 Cultural Factors and Consumer Behavior
- 2.2 Internal factors
- 2.2.1 Goals
- 2.2.2 Costs
- 2.2.3 Marketing Policies
- 2.2.3.1 Product Policies
- 2.2.3.2 Service Policies
- 2.2.3.3 Product Range Policies
- 2.2.3.4 Conditional Policies
- 2.2.3.5 Communication Policies
- 2.2.3.6 Distribution Policies
- 2.2.4 Organizational Structure
- 2.2.5 Transfer Pricing
- 3. Pricing strategies
- 3.1 International pricing strategies
- 3.2 Intranational Pricing Strategies
- 3.3 Combining International and Intranational Pricing Strategies
- 4. Price setting
Objectives and Key Themes
This paper aims to explore the complexities of global pricing strategies, examining the factors influencing pricing decisions in international markets and outlining various strategies employed by multinational firms. It analyzes how both external and internal factors interact to shape effective pricing models.
- Factors influencing international pricing decisions (external and internal)
- Various international and intranational pricing strategies
- The impact of governmental regulations and legal environments on pricing
- The role of demand and economic environments in shaping pricing strategies
- Combining international and intranational pricing approaches for optimal results
Chapter Summaries
1. Introduction: This introductory chapter sets the stage by highlighting the evolving international business environment, emphasizing the increasing importance of pricing strategies in maintaining profitability amidst global competition and changing market dynamics. It underscores the limitations of traditional pricing methods and advocates for the development of more comprehensive global pricing strategies to ensure future success.
2. Factors in international pricing management: This chapter delves into the crucial determinants that shape international pricing decisions, categorizing them into external and internal factors. External factors, such as governmental regulations (including tariffs, antitrust laws, and price controls), demand conditions, and the overall economic environment, are discussed in detail. The chapter emphasizes the need for multinational firms to understand and adapt to these market-specific differences. Internal factors, encompassing company goals, cost structures, and various marketing policies (product, service, range, conditional, communication, and distribution), are also explored, demonstrating their combined impact on effective pricing strategies.
3. Pricing strategies: This chapter provides a comprehensive overview of various pricing strategies used in international markets. It distinguishes between international pricing strategies (standardization, dual-pricing, differentiation, and price corridor) and intranational pricing strategies (skimming, penetration, premium, medium, promotional, and pulsation). The significance of each strategy is thoroughly analyzed, considering its application in diverse market contexts. The chapter concludes by discussing the effective combination of both international and intranational strategies to optimize pricing decisions across global markets.
4. Price setting: This chapter focuses on the practical application of pricing strategies, outlining the process of price setting in international markets. While details of this chapter aren't provided in the excerpt, it would likely discuss the methods used to translate the theoretical concepts outlined in previous chapters into actionable pricing decisions.
Keywords
Global pricing strategies, international pricing, intranational pricing, governmental regulations, market demand, economic environment, cost structures, marketing policies, standardization strategy, dual-pricing strategy, differentiation strategy, price corridor strategy, skimming strategy, penetration strategy, premium pricing, competitive advantage, profit maximization.
Frequently Asked Questions: A Comprehensive Guide to International Pricing Strategies
What is the main topic of this document?
This document provides a comprehensive overview of international pricing strategies. It explores the factors influencing pricing decisions in international markets and outlines various strategies employed by multinational firms. The document also analyzes how external and internal factors interact to shape effective pricing models.
What are the key themes explored in this document?
Key themes include the influence of external (governmental regulations, market demand, economic environment) and internal (company goals, cost structures, marketing policies) factors on pricing decisions; various international and intranational pricing strategies (e.g., standardization, dual-pricing, skimming, penetration); the impact of governmental regulations and legal environments on pricing; combining international and intranational pricing approaches for optimal results; and the process of price setting in international markets.
What factors influence international pricing decisions?
The document categorizes these factors into external and internal elements. External factors include governmental regulations (tariffs, antitrust laws, price controls), demand conditions, economic environment, market conditions, competitive structures, distribution infrastructure, inflation, exchange rates, and cultural factors. Internal factors encompass company goals, cost structures, and various marketing policies (product, service, range, conditional, communication, and distribution policies), organizational structure and transfer pricing.
What are the different pricing strategies discussed?
The document distinguishes between international pricing strategies (standardization, dual-pricing, differentiation, and price corridor) and intranational pricing strategies (skimming, penetration, premium, medium, promotional, and pulsation). It also emphasizes the importance of combining both international and intranational strategies for optimized global pricing.
How does the document structure its information?
The document is structured into four chapters: 1. Introduction; 2. Factors in international pricing management; 3. Pricing strategies; and 4. Price setting. Each chapter is summarized in detail, providing a clear overview of the content.
What is the objective of this paper?
The paper aims to explore the complexities of global pricing strategies, examining the factors influencing pricing decisions in international markets and outlining various strategies employed by multinational firms. It analyzes how both external and internal factors interact to shape effective pricing models.
What are some keywords associated with this document?
Keywords include: Global pricing strategies, international pricing, intranational pricing, governmental regulations, market demand, economic environment, cost structures, marketing policies, standardization strategy, dual-pricing strategy, differentiation strategy, price corridor strategy, skimming strategy, penetration strategy, premium pricing, competitive advantage, profit maximization.
Where can I find more details about the price-setting process?
While the excerpt does not offer detailed information on the price-setting process, it indicates that Chapter 4 focuses on the practical application of pricing strategies in international markets and the methods of translating theoretical concepts into actionable pricing decisions.
What is the intended audience for this document?
The document is intended for academic use, focusing on the analysis of themes related to international pricing strategies in a structured and professional manner.
- Quote paper
- Jochen Volm (Author), 2001, Global Pricing Strategies. Theoretical Concepts and Practical Experience, Munich, GRIN Verlag, https://www.grin.com/document/6755
