Chapter 11 - Setting global prices. After reading the material in this chapter, you should be able to: Factors influencing pricing decisions; objectives, strategies, and pricing policies; taxonomy of pricing practices; terms and methods of payment; countertrade. | Chapter 11 – Setting Global Prices “We have invested more behind brand equity and in product quality. This today gives us the pricing power we need to pass on cost increases while maintaining market competitiveness.” Jim Lawrence, Unilever Chief Financial Officer McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Outline Factors influencing Pricing Decisions Competitive factors Consumer factors Price and the Internet Product factors and distribution channels Country factors Currency inflation taxation Objectives, Strategies, and Pricing Policies Taxonomy of Pricing Practices Terms and Methods of Payment Countertrade Summary The Price Decision: Variables to Consider Internal Corporate Strategy Product Cost External Characteristics of Target Market Global and Local Competitors Country’s Economic and Legislative Structure Power of Distributors What is ‘Price?’ Price is a tangible value of an offer created through product, distribution and communication decisions Pricing decisions are intrinsically tied to other marketing mix variables. In a global context, the price that a product can gain in the market often determines its development. In low-income countries, price must be in line with purchasing power. Factors Influencing Pricing Decisions Competitive factors Consumer factors Product factors and distribution Channels Country factors Competitive Factors Structure and intensity of competition varies from country to country. The level of competitive pressure strongly influences pricing decisions The power to determine price is strongly linked to the value associated with the marketing mix Consumer Factors Monetary vs. non-monetary price Monetary Price viewed as expensive or cheap Dependent on past experience, information, competitive offerings Non-monetary Sacrifice when buying product Factors such as time, learning curve, risks Varies from country to country Based on the importance attributed to a particular feature or . | Chapter 11 – Setting Global Prices “We have invested more behind brand equity and in product quality. This today gives us the pricing power we need to pass on cost increases while maintaining market competitiveness.” Jim Lawrence, Unilever Chief Financial Officer McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Outline Factors influencing Pricing Decisions Competitive factors Consumer factors Price and the Internet Product factors and distribution channels Country factors Currency inflation taxation Objectives, Strategies, and Pricing Policies Taxonomy of Pricing Practices Terms and Methods of Payment Countertrade Summary The Price Decision: Variables to Consider Internal Corporate Strategy Product Cost External Characteristics of Target Market Global and Local Competitors Country’s Economic and Legislative Structure Power of Distributors What is ‘Price?’ Price is a tangible value of an offer created through product, distribution and .
