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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