英文国际市场营销chapter-14ppt课件.ppt

PricingforInternationalMarkets Chapter14 ChapterLearningObjectives 1 Componentsofpricingascompetitivetoolsininternationalmarketing 2 Thepricingpitfallsdirectlyrelatedtointernationalmarketing 3 Howtocontrolpricinginparallelimportsorgraymarkets ChapterLearningObjectives 4 Priceescalationandhowtominimizeitseffect 5 Countertradinganditsplaceininternationalmarketingpractice 6 Themechanicsofpricequotations Introduction Pricingstrategyformsanothercornerstoneofaglobalmarketingprogram itrepresentsoneofthemostcriticalandcomplexissuesinglobalmarketing duetoeconomic financial andmathematicalimplications Priceistheonlymarketingmixelementthatgeneratesrevenues AllotherelementsentailcostsNeedtodevotespecialcareinpricingproductsasamanager sfiduciaryresponsibilityistomarketproductsataprofitandincreaseshareholderwealthAcompany sglobalpricingpolicymaymakeorbreakitsoverseasexpansionefforts duetoforeignexchangecomplications Firmsalsofacesignificantchallengesincoordinating standardizingoradapting theirpricingstrategiesacrossvariouscountriestheyoperateinThischapterreviewstheplethoraofinternationalpricingstrategyissues PricingObjectives Ingeneral pricedecisionsareviewedintwoways Pricingasanactiveinstrumentofaccomplishingmarketingobjectives orPricingasastaticelementinabusinessdecision Themorecontrolacompanyhasoverthefinalsellingpriceofaproduct thebetteritisabletoachieveitsmarketinggoals Itisnotalwayspossibletocontrolendprices Broaderproductlinesandthelargerthenumberofcountriesinvolved themorecomplextheprocessofcontrollingpriceschargedtotheenduser ParallelImportationorGrayMarkets Onaccountofcompetition firmsmayhavetochargedifferentpricesfromcountrytocountryIninternationalmarketing thiscausesavexingproblem ParallelImportationorGrayMarketsParallelimportsdevelopwhenimportersbuyproductsfromdistributorsinonecountryandselltheminanothertodistributorswhoarenotpartofthemanufacturer sregulardistributionsystemThepossibilityofaparallelmarketoccurswheneverpricedifferencesaregreaterthanthecostoftransportationbetweentwomarkets ParallelImportationorGrayMarkets Forexample theulcerdrugLosecsellsforonly 18inSpainbutgoesfor 39inGermany andtheheartdrugPlavixcosts 55inFranceandsellsfor 79inLondonThus itispossibleforanintermediarytobuyproductsincountrieswhereitislessexpensiveanddivertittocountrieswherethepriceishigherandmakeaprofitExclusivedistribution apracticeoftenusedbycompaniestomaintainhighretail marginsencourageretailerstostocklargeassortments ortomaintaintheexclusive qualityimageofaproduct cancreateafavorableconditionforparallelimporting EffectsofParallelImportation Parallelimportscandolong termdamageinthemarketfortrademarkedproductsCustomerswhounknowinglybuyunauthorizedimportshavenoassuranceofthequalityoftheitemtheybuy ofwarrantysupport orofauthorizedserviceorreplacementpartsIfaproductfails theconsumerblamestheownerofthetrademark andthequalityimageoftheproductissulliedCompaniescanrestrictthegraymarketbypolicingdistributionchannelsInsomecountriesfirmsgethelpfromthelegalsystem ApproachestoInternationalPricing Full CostPricing nounitofasimilarproductisdifferentfromanyotherunitintermsofcost whichmustbearitsfullshareofthetotalfixedandvariablecost Thereareseveralapproachestopricingininternationalmarkets whichinclude 2 Variable CostPricing firmsregardforeignsalesasbonussalesandassumethatanyreturnovertheirvariablecostmakesacontributiontonetprofit Pricesareoftensetonacost plusbasis i e totalcostsplusaprofitmargin Thisisapracticalapproachtopricingwhenacompanyhashighfixedcostsandunusedproductioncapacity ApproachestoInternationalPricing 3 SkimmingPricing Thisisusedtoreachasegmentofthemarketthatisrelativelypriceinsensitiveandthuswillingtopayapremiumpriceforaproduct 4 PenetrationPricing Thisisusedtostimulatemarketgrowthandcapturemarketsharebydeliberatelyofferingproductsatlowprices Itisusedtoacquireandholdshareofmarket PriceEscalation CostsofExporting thetermrelatestosituationsinwhichultimatepricesareraisedbyshippingcosts insurance packing tariffs longerchannelsofdistribution largermiddlemenmargins specialtaxes administrativecosts andexchangeratefluctuations Priceescalationreferstotheaddedcostsincurredasaresultofexportingproductsfromonecountrytoanother Thereareseveralfactorsthatleadtohigherprices PriceEscalation contd 2 Taxes Tariffs andAdministrativeCosts Thesecostsresultsinhigherprices whicharegenerallypassedontothebuyeroftheproduct 3 Inflation Inflationcausesconsumerpricestoescalateandtheconsumerisfacedwithrisingpricesthateventuallyexcludemanyconsumersfromthemarket PriceEscalation contd 4 MiddlemanandTransportationCosts Longerchannellength performanceofmarketingfunctionsandhighermarginsmaymakeitnecessarytoincreaseprices 5 ExchangeRateFluctuationsandVaryingCurrencyValues Currencyvaluesswingvis visothercurrenciesonadailybasis whichmaymakeitnecessarytoincreaseprices ExportStrategiesUnderVaryingCurrencyConditions Stress pricebenefitsExpandproductlineandaddmorecostlyfeaturesShiftsourcingandmanufacturingtodomesticmarketExploitexportopportunitiesinallmarketsConductconventionalcash for goodstradeUsefull costingapproach butusemarginal costpricingtopenetratenew competitivemarkets WhenDomesticCurrencyisWEAK Engageinnonpricecompetitionbyimprovingquality delivery andafter saleserviceImproveproductivityandengageinvigorouscostreductionShiftsourcingandmanufacturingoverseasGiveprioritytoexportstorelativelystrong currencycountriesDealincountertradewithweak currencycountriesTrimprofitmarginsandusemarginal costpricing WhenDomesticCurrencyisSTRONG SOURCE S TamurCavusgil UnravelingtheMystiqueofExportPricing BusinessHorizons May June1988 figure2 p 58 ExportStrategiesUnderVaryingCurrencyConditions SOURCE S TamurCavusgil UnravelingtheMystiqueofExportPricing BusinessHorizons May June1988 figure2 p 58 Speedrepatriationofforeign earnedincomeandcollectionsMinimizeexpendituresinlocal hostcountrycurrencyBuyneededservices advertising insurance transportation etc indomesticmarketMinimizelocalborrowingBillforeigncustomersindomesticcurrency Keeptheforeign earnedincomeinhostcountry slowcollectionsMaximizeexpendituresinlocal hostcountrycurrencyBuyneededservicesabroadandpayfortheminlocalcurrenciesBorrowmoneyneededforexpansioninlocalmarketBillforeigncustomersintheirowncurrency WhenDomesticCurrencyisWEAK WhenDomesticCurrencyisSTRONG LeasinginInternationalMarkets Leasingopensthedoortoalargesegmentofnominallyfinancedforeignfirmsthatcanbesoldonaleaseoptionbutmightbeunabletobuyforcash Leaserevenuetendstobemorestableoveraperiodoftimethandirectsaleswouldbe Equipmentleasedandinusehelpstosellothercompaniesinthatcountry Leasinghelpsguaranteebettermaintenanceandserviceonoverseasequipment Dumping OneapproachclassifiesinternationalshipmentsasdumpediftheproductsaresoldbelowtheircostofproductionTheotherapproachcharacterizesdumpingassellinggoodsinaforeignmarketbelowthepriceofthesamegoodsinthehomemarket Economistsdefinedumpingdifferently WorldTradeOrganization WTO rulesallowfortheimpositionofadutywhengoodsaredumpedAcountervailingdutyorminimumaccessvolume MAV whichrestrictstheamountacountrywillimport maybeimposedonforeigngoodsbenefitingfromsubsidieswhetherinproduction export ortransportation ApproachestoLesseningPriceEscalation Methodsusedtoreducecostsand thus lowerpriceescalationinclude LoweringCostofGoods Firmscanlowercostsbyeliminatingcostlyfeaturesinproductsorbymanufacturingproductsincountrieswherelaborcostsarecheaper LoweringTariffs Firmscanlowerpricesbycategorizingproductsinclassificationswherethetariffsarelower LoweringDistributionCosts Firmscandesignchannelsthatareshorter havefewermiddlemen andbyreducingoreliminatingmiddlemanmarkup UsingForeignTradeZones Firmscanmanufactureproductsinfreetradezoneswheretheincentiveofferedistheeliminationoflocaltaxes whichkeeppricesdown CountertradeasaPricingTool Barter isthedirectexchangeofgoodsbetweentwopartiesinatransactionCompensationdeals isthepaymentingoodsandincashCounter purchaseoroff settrade theselleragreestosellaproductatasetpricetoabuyerandreceivespaymentincashandmayalsobuygoodsfromthebuyerforthetotalmonetaryamountinvolvedinthefirstcontractorforasetpercentageofthatamount whichwillbemarketedbythesellerinitshomemarketBuy back Thistypeofagreementismadetheselleragreestoacceptaspartialpaymentacertainportionoftheoutputthatareproducedfromtheplantormachinerythataresoldtothebuyer Countertradeisapricingtoolthateveryinternationalmarketermustbereadytoemploy Therearefourdistincttransactionsincountertrading whichinclude WhyPurchasersImposeCountertradeObligations ToPreserveHardCurrency ToImproveBalanceofTrade ToGainAccesstoNewMarkets ToUpgradeManufacturingCapabilities ToMaintainPricesofExportGoods ToForceReinvestmentofProceeds ProactiveCountertradeStrategy Isthereareadymarketforthegoodsbartered Isthequalityofthegoodsofferedconsistentandacceptable Isanexpertneededtohandlethenegotiations Isthecontractpricesufficienttocoverthecostofbarterandnetthedesiredrevenue Answeringthefollowingquestionsissuggestedbefo