In International Marketing, the pricing is the most important tool on account of the fact that in the International competition the product has to face mainly on the price front.

When you enter into international market, the exporter has to compete with three forces

  • Other exporters in the domestic market
  • Other exporters in other countries
  • Other manufacturers in the local market

Export pricing & costing are two different things & an exporter should not confuse between the two.

Pricing is what an exporter offer to the customers on a particular product while the cost is what an exporter pay while manufacturing the same product. Export pricing is the most important tool for promoting sales. Pricing depends on mainly three elements

  • Demand
  • Cost
  • Competition

Export pricing differs from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through the canalizing agency.

Objectives of Export Pricing:

  • Offering competitive pricing
  • To earn reasonable profit
  • To ensure better image for the country
  • Utilization of availability of incentives
  • To survive through difficult times (Recession)

Factors affecting the Export Pricing:

  • Various cost involved
  • Demand for the product
  • Availability of substitutes
  • Incentives & Tax concessions
  • Terms of delivery
  • Purchase consideration

Various elements of costs:

  • Material cost
  • Labor cost
  • Packing cost
  • Handling charges
  • Freight
  • Insurance Premium
  • Selling & Distribution charges
  • Commission & Service Charges