INTERNATIONAL MARKETING

International Marketing

Table of Contents

Table of Contents1

International Marketing2

Introduction:2

Importance of Cross-Cultural Pricing Decisions:2

Dynamic Incremental Pricing2

Price Corridor2

Dumping Parallel Imports3

Grey Markets3

Transfer Pricing:3

Unfamiliar Foreign Currency3

Arm's Length Principle:4

Critical Success Factors for Introducing a Product Global:4

Marketing Research5

From Global to Glocal5

Glocalisation & Global Product Management5

Impact on International Marketing6

International Marketing6

Conclusion:6

References8

International Marketing

Introduction:

For market economies, cross cultural pricing is not merely a function of supply and demand dynamics. Pricing decisions are now increasingly being influenced by the transactions of various markets, institutions, social networks and most importantly culture. For each economy, there is a significant influence of a plethora of social and political variables that in turn shape the preference levels and priorities of the concerned managers.

For the public, pricing influences the perceptions related to the goods value. For different markets, there are different consumer behaviour patterns and consequently pricing models need to be adjusted to appeal to the targeted segment. The realm of pricing has, therefore, far exceeded the economic reasoning and now takes into account the social and the cultural forces.

Importance of Cross-Cultural Pricing Decisions:

The importance of cross-cultural pricing is evident from Disneyland Hong Kong's initial failure in 2005. Apart from the mismatch of pricing model for the Chinese price responsive customers, the company also failed to build upon the cultural aspects prevalent in that society. These related to holiday schedules, tough competition, high admission ticket prices and inability to adapt to the culture of the locals. Later on the company had to restructure its pricing, offering more discounts on weekdays as compared to holidays, offering discounts to elderly citizens as per the Asian culture of respect and also had to lower its pricing to make its mark in a highly competitive, culturally sensitive and price conscious market (Matusitz, 2009, Pp 674-679).

Dynamic Incremental Pricing

This global pricing policy alternative is based on the assumption of incurrence of fixed costs irrespective of the firm's operations in the home market or international market. There is little regard of the success factor in this pricing method, and the main aim is to recover the variable costs to maximize profits. For international marketing ventures and promotions, the company aims to recover the costs associated with the same. Dynamic incremental pricing is used by companies only in special cases such as the use of penetration pricing, which utilizes lower pricing initially in order to capture the market.

Price Corridor

Price corridor is a price coordination framework that is based on the changing trends and increasing efficiencies of businesses in sourcing. Consequent increase in supply chain efficiencies has resulted in a downward price pressure on MNCs, which is resulting in a reduction of large price differences between different countries. To cater to this challenge, the concept of price corridor focuses on narrowing the price differences by increasing the price in the lowest priced markets or countries and by lowering the prices in highest priced markets. This meticulous implementation is also critically important for dealing with parallel imports.

Dumping Parallel Imports

A critical concept related to borderless trading is of "parallel imports" that are caused due to high price differences in ...