Pricing in Global Markets

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Pricing in Global Markets

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Gray Market Designer Fragrances. TM 2- 3 Warren Keegan Associates, Inc. Transfer Pricing ... As an Access to New Markets. To Induce Technology Transfer ... – PowerPoint PPT presentation

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Title: Pricing in Global Markets


1
Pricing in Global Markets
  • Price Should Reflect Quality
  • Pricing Strategy
  • Types of Discount
  • Pricing in Markets
  • Gray Marketing

Penetration Skimming Market Holding
2
Gray Market Designer Fragrances
3
Pricing in Global Markets (cont.)
At Cost Cost Plus Margin Market-Based/ At Arms
Length
Transfer Pricing
4
Pricing in Global Markets (cont.)
  • PPP
  • Dumping Laws
  • Import Duties
  • Distn. Efficiency
  • Transportation Cost

Full-Cost Variable Cost/ Marginal Cost
FTZ Reclassification Host Country Assembly
Price Escalation
5
Price Escalation An American-Built Jeep
Cherokee Makes the Trip to Japan
6
Price Escalation
Ex FOB FAS CF CIF
7
Pricing in Global Markets (cont.)
  • Market Elasticity
  • Host Govt. Price Controls
  • Inflation
  • Competitive Envt.
  • Exchange Rate Fluctuations
  • No Normal Margins
  • Licensing Vs. Buying

External Environment
8
Types of Countertrade Agreements
  • Barter
  • Counter Purchase
  • Offset
  • Compensation Trading
  • Cooperation Agreements
  • Switch Trading

9
Reasons for Countertrade
  • Conserve Hard Currency
  • Overcome Some Trade Barriers
  • Promotional Tool
  • As an Access to New Markets
  • To Induce Technology Transfer
  • Repatriate Funds in Soft Currency
  • Protect Against F/X Fluctuations

Problems of Countertrade
  • Lack of Flexibility
  • Managed Trade not Free Trade
  • Harder to Determine Price
  • Tax Evasion
  • Dumping
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