Professional Documents
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Global Marketing Management Global Pricing Strategies
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IILM-GSM
Global Marketing Management Global Pricing Strategies
Contents
• International Pricing Compared to Domestic Pricing
• International Pricing Objectives/ Strategies
• International Pricing Framework
• Pricing Approaches for International Markets
Cost-based Pricing
Full-cost Pricing
Marginal cost pricing
Market-based Pricing
• Countertrade as a Pricing Tool
• Terms of Payment in International Marketing
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IILM-GSM
Global Marketing Management Global Pricing Strategies
07/05/10 4
IILM-GSM
Global Marketing Management Global Pricing Strategies
Pricing Strategies
• Pricing level (first-time)
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IILM-GSM
Global Marketing Management Global Pricing Strategies
Pricing Strategies
• Pricing level (first-time) Other elements of
• Price changes over PLC
• Pricing across products marketing mix
• Pricing across countries
Terms of business
• Terms of sale
• Terms of payment
Firm performance
Sales, shares, contribution
margins, profits, image etc.
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Global Marketing Management Global Pricing Strategies
ost-based Pricing
UNIT COST
Markup price =
(1- Desired return on sales)
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Global Marketing Management Global Pricing Strategies
Marginal Cost
o s ts (MC)
l C
t a
To
Total Cost
Variable
Cost
Fixed Cost
Variable Cost
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Volume 10
IILM-GSM
Global Marketing Management Global Pricing Strategies
Shipment terms, CFR (cost and freight) CPT (carriage paid to)
main carriage unpaidCIF (cost, insurance and CIP (carriage and insurance
freight) paid to)
IILM-GSM
Global Marketing Management Global Pricing Strategies
The ‘ex-works’ price US$ 330 is 28.4% of the price paid by the
consumer. It works out to be a ‘multiplier’ of 3.5. This
‘multiplier’ is used as a calculating aid while offering price
quotations in international markets.
IILM-GSM
Global Marketing Management Global Pricing Strategies
CounterTrade
Buy-back Offset
Switch
07/05/10 Trading 14
IILM-GSM
Global Marketing Management Global Pricing Strategies
International
Trade
Letter of
Draft
Credit
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IILM-GSM