Page 146 - DMGT547_INTERNATIONAL_MARKETING

Unit 8: Pricing Decisions for International Markets

A suggested process for arriving at the price would include the following steps: Notes
1. Analysis of the marketing goals
2. Choosing the marketing mix
3. Composing the marketing mix

4. Determining the pricing policy
5. Defining the pricing strategy
6. Arriving at a specific price.
Of course, the chronology is not important but thought on each of the above steps would enable
the marketing manager to arrive at a price which fulfils his marketing objectives within the set
upper and lower limit. Thus, in brief, the marketing manager arrives at a price, within the
parameters of cost, demand & supply and economic, political and legal parameters, by adopting
a process that fulfils his marketing objective.

Notes An important pre-requisite for scientific export pricing decisions is regular
availability of authentic basic data relating to export products, foreign market and other
relevant marketing information. The details of information requirements vary from
product to product, market to-market and firm to firm.
In general, the following information is usually necessary for facilitating export pricing decision:

Product Information

1. Production cost details:
a) Prime cost
b) Factory overheads

c) General Administration overheads
2. Cost of distribution
a) Cost of packing
b) Cost of selling
c) Cost of transportation including insurance

d) Distribution costs
3. Cost of marketing support-advertising, sales promotion and technical literature.
These data may have to be obtained for the exporting countries, for competing countries
and for consuming countries.

4. Nature of the product
a) Whether a consumer or an industrial product
b) Elasticity of demand
c) Demand be pushed up by promotion
d) Importance given to the price-quality mix
e) Elasticity of supply of the product

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