Global Marketing Strategy
Global Marketing Strategy BA 4590
Utah State University
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This 2 page Class Notes was uploaded by Arely Funk on Wednesday October 28, 2015. The Class Notes belongs to BA 4590 at Utah State University taught by Staff in Fall. Since its upload, it has received 20 views. For similar materials see /class/230436/ba-4590-utah-state-university in Business Administration at Utah State University.
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Date Created: 10/28/15
Pricing for International Markets Pro t and Cost Factors that Affect Pricing I Fixed costs 0 costs that do not vary with changes in production levels I Variable cost 0 costs that vary with changes in production levels I Marginal pro ts 0 the changes in total pro t resulting from the sale ofone additional unit ofa product Approaches to International Pricing FullCost versus VariableCost Pricing I Fullcost pricing companies insist that no unit ofa similar product is different from any other unit in terms of cost and that each unit must bear its full share of the total xed and variable cost Variablecost pricing the rm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets Types of Costs I Transportation Costs depends on the mode of transportation I Tariffs usually levied on the landed costs 0 Tariffs and reclassi cation Local Taxes 0 Valueadded tax VAT in EU and Asian countries A tax that is levied at each stage in the production and distribution of a product or service based on the value added by that stage the tax is ultimately passed on to the buyer 0 Sin Tax Tax assessed on products that are legal but discouraged by society Luxury Tax I Local Production Costs I Channel Costs 0 A function of channel length distribution margins and logistics Market Factors That Affect Pricing I Income Level I Competition I Culture 0 Price haggling and group buying 0 Number superstition Environmental Factors that Affect Pricing I Exchange rate BIG MAC INDEX I In ation Rate Environmental Factors that Affect Pricing I Price Controls O 0 Common in developing countries partly to combat inflation Also in some developed countries I UK Pharmaceutical Price Regulation Scheme Managerial Issues In Global Pricing I Managing Export Price Escalation O 00 The substantial rise of retail price of an export product due to the additional costs Strategy 1 accept the price disadvantage and adjust the market positioning Strategy 2 reengineer its products to be less costly or grant a discount