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International Pricing

International Pricing. Chapter 18. Pricing Policy. Pricing Objectives Parallel Imports How does it affect a company? Exclusive distribution How to prevent it. Approaches to International Pricing. Full-cost v. Variable-cost Pricing Price skimming v. Penetration Pricing

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International Pricing

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  1. International Pricing Chapter 18

  2. Pricing Policy • Pricing Objectives • Parallel Imports • How does it affect a company? • Exclusive distribution • How to prevent it

  3. Approaches to International Pricing • Full-cost v. Variable-cost Pricing • Price skimming v. Penetration Pricing • Market still sets price!!! • Effects of growth and wealth

  4. What is it? What are its effects? What causes it? Costs of exporting Taxes, tariffs, and administrative costs Inflation Deflation Exchange rate fluctuations Carrying currency values Middleman & Transportation costs Price Escalation

  5. Lessening Price Escalation • Lower COGS • Lowering Tariffs • Lowering Distribution Costs • Free Trade Zones • Dumping • What is it? • Countervailing duty

  6. Countertrade • Pepsi example • Types of Countertrade • Barter • Comprehensive deals • Counterpurchase • Product Buy-Back Agreement • Problems • Internet • Proactive Countertrade Strategy

  7. Transfer Pricing Strategies • Definition • Branch shows no profit • Advanced Pricing Agreement

  8. Price Quotations • Should list: • Quality • Quantity • Transportation • Responsibility

  9. Administered Pricing • How destructive is competition? • Cartels • OPEC • DeBeers • Government-induced Pricing

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