FACTORS AFFECTING PRICING

FACTORS AFFECTING PRICING

Unlike other elements of the marketing mix, price is the only one, which generates revenue. It is, therefore, very important to set appropriate export prices based on:

• Company internal factors
• Market factors
• Environmental factors

Nevertheless, the traditional approach has often been to: "Take the domestic product price, add insurance and freight, put in a hefty cushion for contingencies


Company & Product Factors:

• Corporate and marketing objectives
• Firm and product positioning
• Product range, life cycle, substitutes, product differentiation and unique selling propositions
• Cost structures, manufacturing, experience effect and economies of scale
• Marketing, product development
• Available resources
• Inventory
• Shipping costs




Market Factors:

• Consumers perceptions, expectations and ability to pay
• Need for product adaptation, market servicing
• Market structure, distribution channels discounting pressures
• Market growth, demand elasticities
• Need for credit
• Competition objectives, strategies and strengths


Environmental Factors

• Government influences and constraints
• Currency fluctuations
• Business cycle stage, level of inflation
• Use of non-money payment and leasing