Develops brand image and product differentiation.Ĩ. Export pricing helps in capturing foreign market.ħ. Export pricing builds goodwill in the market.Ħ. It decides the success and failure of export efforts.ĥ. Competitive capacity in foreign market depends on the price fixed.Ĥ. The volume of sales and market demand depends on pricing policy.ģ. If the price is not properly set, success of the firm in the international market becomes doubtful.Ģ. Consumers are extremely sensitive about quality and price of the product. The importance of export pricing can be summarized as follows:ġ. It is rightly treated as an important factor in successful export strategy. Price is one of the important elements in marketing mix and this is a delicate area of export marketing. By charging a higher price and making a noticeable difference in the price as compared to that of competitors, this objective can be fulfilled. Establishing LeadershipĪnother objective behind pricing is to establish not only a superior quality image, but also emphasize on leadership or number one position in the export markets. But this objective is more of a short term nature and bases its performance on profits which may turn out to be dangerous in export markets. A price which can generate maximum cash flows or a higher rate of return is determined. For this purpose, it is necessary to have complete information of cost and demand. A price which would generate such a profit is to be established. Maximum Current ProfitĪn exporter may determine his object of securing maximum Profits. Due to this perception, sales volume of the product increases. Such indications lead consumers to rate products higher compared to that of competitors. Setting higher prices to indicate the superior quality of the product. Such low prices discourage competition, thereby further increasing sales.Ģ. For this purpose, market should be highly price sensitive. Setting lower prices to overseas buyers leads to higher sales volume, thereby earning more profits. There are two alternatives available for this purpose.ġ. Depending upon competition and sensitivity of market to price, the final pricing decision needs to be taken. Keeping prices competitive and maintaining low prices is a short-term objective, as every exporter aims at increasing profits at a later stage.Īs an exporter survives the competition, the objective shifts to having maximum sales growth. Making price competitive, thereby earning less profit in order to survive, could be one of the objectives of pricing. In much competitive markets, one of the marketing tools which can make the exporter survive the competition is pricing. SurvivalĪn exporter faces competition not only from his fellow-exporters, but also from other country exporters. The principal objectives of export pricing are as follows. The success of an export firm largely depends on its effective pricing policy. Therefore export pricing is not just an arithmetical calculation, but a practical proposition based on market situation. Export pricing is much more difficult than domestic pricing, because the exporter has to take into account not only the cost of production but also the influence and impact of the conditions prevailing in the international markets. Objectives of Export PricingĮxport pricing is a technique of fixing the prices of goods and services which are intended to be exported and sold in the overseas markets. Marginal cost approach is also an important approach to export pricing.
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