Pricing

Developing an international pricing strategy is typically an intricate task because the firm has to determine the optimum pricing strategy in each national market and then harmonize the prices across countries. The aim is both to control pricing problems and maximize profitability in foreign markets. To that end, international pricing encompasses price discrimination, strategic pricing and regulatory influences on prices.

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Some companies, Apple is well known for it, adopt a global pricing strategy where all products cost the same everywhere, and if prices vary, then it is because the product has been varied for that market. For some, this is definitely the right approach — but it’s not right for all.

There are many variable factors that influence international pricing, such as currency exchange rates, economic conditions, production expenses, your competitors and the consumers in your target market.  When setting prices internationally, you also need to consider the standard of living and income levels in your target market.                      

Top 10 issues companies face in international pricing

• Different commercial realities: you cannot just harmonise everything
• Lack of internal transparency
• International sourcing trends: buyers comparing prices across markets for the same or similar product
• Coordination between markets without disrespecting local commercial practices
• Harmonization where not needed
• Different accounting & controlling standards
• Different people cultures
• Lack of common internal language about pricing
• Different levels of market maturity suggests different pricing strategies
• Grey market trading

 

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New Product Development

Where do organisations get their ideas for NPD? Answer is:

• Market Research

• Employees

• Consultants

• Competitors

• Customers

• Distributors and Suppliers

The international trade director at UK Trade & Investment (UKTI) West Midlands Doug Mahoney have said that "You need to be clear that there is a market for your product overseas. Don't assume that just because you have a great product and it sells well in your own market, that it will sell as well abroad. It's essential to understand the culture of the market you are thinking about moving into"

Organsations must accept that differences in values, customs, languages and currencies will mean that some products will only suit certain countries. There are important regional differences. For example advertising in China and India need to focus on local languages.
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 New product development has eight stages:

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Testing products abroad

In the picture above is this stage 7: test marketing. This means that the product will be tested within a specific area. The product will be launched within a particular region so the marketing mix strategy can be monitored and if needed modified before national launch.

For example Nokia Lumia 900 was first hitted in Rogers of Canada. After that it spread globally from there. In the US, Nokia and phone carrier AT&T Wireless had a big marketing splash for Lumia 900, which included a launch event in New York City's Times Square.This campaign would be even bigger than those done for iPhone.