Title: Pricing in Global Markets
1Pricing in Global Markets
- Price Should Reflect Quality
- Pricing Strategy
- Types of Discount
- Pricing in Markets
- Gray Marketing
Penetration Skimming Market Holding
2Gray Market Designer Fragrances
3Pricing in Global Markets (cont.)
At Cost Cost Plus Margin Market-Based/ At Arms
Length
Transfer Pricing
4Pricing 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
5Price Escalation An American-Built Jeep
Cherokee Makes the Trip to Japan
6Price Escalation
Ex FOB FAS CF CIF
7Pricing in Global Markets (cont.)
- Market Elasticity
- Host Govt. Price Controls
- Inflation
- Competitive Envt.
- Exchange Rate Fluctuations
- No Normal Margins
- Licensing Vs. Buying
External Environment
8Types of Countertrade Agreements
- Barter
- Counter Purchase
- Offset
- Compensation Trading
- Cooperation Agreements
- Switch Trading
9Reasons 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