global pricing strategy

1. “Sometimes price should be wrong by design”
Sometimes design can determines the price, so if the design is not quiet good, the price should not be too high. If your price is high but the design is not as good as it should, the price should be wrong, because it cannot convince the consumers and the customers to buy your product.

2. The issue of standard worldwide pricing is mostly a theoretical one because of the influence of the factors already discussed. However, coordination of the pricing function is necessary, especially larger, regional markets such as the Europian Union, especially after the introduction of the euro. With more global and regional brands in the global marketer’s offering, control in pricing is increasingly important. This has to be balanced against the need for allowing subsidiaries latitude in pricing so they can may quickly react to specific market conditions. Studies have shown that foreign – based multinational corporations allow their U.S subsidiaries considerable freedom in pricing. This has been explained by the size and unique features of the market.

3. To convince the administrators that the price relief is fair to the company and also in the best interest of the host country is to compare the profit of the product selling in the subsidiaries or in other countries with the product selling in the host country. However, with that way the administrators can see the diffrences and also they are convinced that the price relief is fair to the company and also in the host country.

4. The element of pricing that can be standardized is cost, because cost is frequently used as a basis for price determination largely, because they are easily measured and provide a floor under which prices cannot go in a long term. And also pricis cannot be increased due to economic conditions.
Inflationary environments call for constant price adjustments : in markets with hyperinflations, pricing maybe in a stable currency such as the US Dollar or the Euro with daily translation into the local currency.


5. The Euro will push national markets closer together. First and foremost, in this area is the transparency to consumers of a single currency and a single cross-border price. The euro combined with the growing use of e-business, for example, will allow consumers in Barcelona to surf the Web for the cheapest source of fresh seafood delivered from anywhere within the EU12. Although theoretically possible before, the quotation of prices by individual currency and complexity of payment often posed a barrier – somewhat real, somewhat imagined – to cross-border purchasing. This barrier no longer exists, as consumers are now able to demand the highest quality product and service at the lowest price from business throughout the European community.

6. The advantages of countertrade :
• Permits the covert reduction of prices
• Viewed by firms and nations alike as an excellent mechanism to gain antry into new market
• Countertrade welcomes new buyers and set itself apart from the competition
• Ensure the quality of an international transaction
• Can be equated to an exchange of hostages that ensures that all parties involved live up to their agreement
The drawbacks of countertrade :
• Requires that accounts must now be settled on a country-by-country or even transaction basis, trade then results only from one another rather than from competition
• Uncompetitive goods may be marketed
• The ability of countries and their industries to adjust structually to more efficient production may be restricted
• Can be seen as eroding the quality and efficiency of production and as lowering word consumption