Post by account_disabled on Mar 9, 2024 19:22:52 GMT -8
The sales price, provided that it and its guarantee and support service are satisfactory, is usually a determining factor for market penetration. The sales price in international marketing, in addition to being a persuasive factor for potential buyers, must meet a series of objectives: profitability for the company, achieving a certain market share, and laying the foundations for expansion. and a lasting presence.
For these reasons, the pricing strategy abroad can be one of the most complicated sections within internationalization plans. Except in certain circumstances, it is increasingly difficult, even impossible, to stand out in the market with price as the main competitive advantage; On the other hand, it is also important to remember that the increase in personal income, and the gradual decrease in income differences in several emerging markets, has given rise to segments willing and able to afford products halfway between the most economical, within reach. for the vast majority, and those of high quality and high price for a minority with high purchasing power.
When outlining a sales pricing strategy for a foreign market, you need to ask yourself the following:
How much is the client(s) willing to Ecuador Mobile Number List pay? It is the market that has the last word on the price of products, influenced by economic conditions, competition, qualities such as innovation or quality, etc. Therefore, it is necessary to identify the sales price acceptable to the customer for a product or service compared to the value obtained, regardless of the production and marketing costs, whether the product is positioned at a minority high price level or at one. economical and production in large volumes.
Naturally, for a company that works with different markets, or several market segments within a country, this will mean different pricing strategies for different buyers, which in all cases requires adequate market research.
What are the short, medium and long term objectives of the company? The size of the company and its economic situation will probably determine if the product follows a strategy of penetration from the lowest segments, to create volume and growth, and scale towards the higher market segments, or if, on the contrary, it will start at the lower levels. high of the market until reaching the mass markets.
On the other hand, companies that invest heavily in creating a competitive advantage not based on price, such as a desirable image of the product/service or brand – the case of innovative technology and consumer electronics, fashion items, status objects – They are in a position to set a higher price.
What factors influence production and marketing costs? Determine fixed and variable costs, current demand and expected growth, regulations and laws that regulate commercial activity, product/brand positioning, competitive offerings.
To the costs of the import process – taxes, tariffs, licenses, logistics, intermediaries – other factors are added such as inflation, currency fluctuation, adaptation of the product to local tastes and needs, etc. These factors will have very marked consequences on the profitability of transactions and after-sales service or guarantee (repairs, replacement of parts, etc.), and will require the adoption of measures to control the increase in final prices, such as shortening distribution channels, or the use of special economic zones.
How will distribution channels and product prices be controlled?
Although at first glance the variation of sales prices in different markets seems like the most logical path, it is good to remember that in certain cases, price differentiation can result in competition coming from within the company and from the customers themselves.