by: Jomalyn V. Tiletile

2. • Pricing is a particularly
critical and complex
variable in overseas
marketing strategies.
• The pricing decision
ultimately affects an
organization’s ability to stay
in the market .
• Different pricing
approaches are available
and a variety of concerns
influence pricing decision
including intrafirm, pricing

3. • Pricing an important
decision in any
business, be it domestic or
international , directly
affects revenue thus
profitability .
• Price affects the extent of
promotional support to be
allocated to a product.

4. • The parent company must decide how much say it wants
to reserve for itself in international pricing, including
whether the pricing decision will be made centrally or
delegated for foreign subsidiaries.
• To an extent, the pricing role of the parent company is
determined by the emphasis put on price competition in
the total marketing mix.

5. •
The role assigned to the pricing variable in developing
the marketing mix depends on its strategic significance .
Traditionally , U.S companies have relied more on non
price competition than on pricing.

6. • In brief, pricing in overseas
markets is a controversial issue
involving
legal, economic, governmental, an
d marketing aspects, both in the
practice of differentiated pricing
and in price uniformity.
• In theory, it is desirable on
economic grounds to set different
prices in different
markets, because demand an
supply differ from country to
country. This occurs under any
form of imperfect competition such
as pure monopoly , oligarchy and

7. 3 ways to allocate price setting responsibility:
1. Headquarters only decides
2. Each overseas subsidiary decides independently.
3. Decisions are jointly made between the parent and the
subsidiary.

8. • The factors to consider in
international pricing exceed
those in strictly domestic
marketing not only number
, but also in ambiguity and
risk.

9. General terms:
• Image Building – pricing
should project a certain
image of the product /
company.
• Stability-pricing should
realize a stable level of
sales and profits.
• Ethic - the setting of a
price should meet the
ethical standards of good
and fair business.

10. • COST- is one important
factor in price
determination.
• FIXED COST- are those
that do not vary with the
scale of operations , such
as number of units
manufactured.
• VARIABLE COST- such as
cost of material and labor
used in the manufacturer of
a product bear a direct
relationship to the level of

11. 1. The ratio of fixed cost to
variable costs
2. The economies scale
available to a firm
3. The cost structure of a
vis-a-vis competitors

12. • The competition in an
industry can be analyzed
with reference to such
factors as the number of
firms in the industry
, product differentiation
, and ease of entry.

13. • Customer demand for a
product is another key
factor in price
determination.
• Demands is based on a
variety of considerations
among which price is just
one.

14. • The relationship between
price and demand or
sensitivity of price and it
refers to the number of
units of a product that
would be demanded at
different prices.

15. • Industry Demand for a
product is elastic if demand
can be substantially
increased by lowering
prices.
• If lowering price has little
effect on demand it would
be considered inelastic.

16. • An individual firms seeks to
find out how much market
share it can be command in
the market by changing its
own prices.

17. • Government rules and regulations pertaining to pricing
should be taken into account in setting price.
• Legal requirements of both the host government and the
U.S government must be satisfied.

18. • INTERNATIONAL PRICING – is affected by such factors
as differences in costs, demand conditions, competitions
and government laws.
• TYPES OF PRICING ORIENTATION
1. COST APPROACH- involves first computing all
relevant costs and then adding a desired profit mark up
to arrive at the price.
2. MARKET APPROACH- pricing starts in a reverse
fashion.