Export Pricing

Export Pricing

Strategic pricing is one of the most important factors in achieving financial success in export business. Following factors need to be considered while setting export price:

Currency exchange rates;

Market research and credit checks;

Receivables/risk insurance;

Business travel;

International postage, cable and telephone rates;

Commissions, training charges and other expenses on foreign staff;

Consultants and freight forwarders; and

Product or service modification and special packaging.

There are several pricing strategies available to an exporter depending upon the nature of economy and their per capita income.

 Static Pricing - Charging the same price to all customers.

 Flexible Pricing - Adjusting prices for different types of customers.

 Full Cost Pricing - Covering both fixed and variable costs of the product.

 Marginal Cost - Covering only the variable costs of production.

Penetration Pricing — keeping price low to attract more customers, discourage competitors and gain a quick market share.

 Market Skimming — pricing the product high to make optimum profit among high-end consumers while there is little competition.



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