Explain and illustrate the context of export pricing and costing

Résumé du document

To maximize short-term profits you try to squeeze as much money out of sales of the product as possible, even though fewer customers may make a purchase. Your strategy may be to charge premium prices for website design services. You end up with less customers, but then dealing with a lot of customers multiplies your problems. And you can make more profit off each customer. Or you may need to maximize profits in order to satisfy an impatient boss or investor. The other main strategy is to price your service lower to gain marketshare. You may want to maximize the number of subscribers to your online Internet access business, even though you don't make as much on each customer. But you know that later you'll be able to sell these subscribers other services such as web hosting, e-commerce, website design, DSL, and a host of others once they get comfortable with you. You don't make as much early, but you plan to make money later with "back end" sales.

Extraits

[...] Companies propose to organise the transport and customs clearance, but of course, it will be add on the final invoice. According to the company incoterm sales, the price is changing, but anyway the customer has to pay the price, either he buys with an sale incorterm and he does not have to organise and to held the responsibility of the transport, or either, he pay the product at the domestic price but has to organise the transport. In both situation the buyer has to buy the transport. [...]

[...] Explain and illustrate the context of export pricing and costing Sommier -Explain the role of pricing in distribution and demand. Enumerate various approaches to product pricing -Identify and explain the different factors that influence export pricing - Illustrate the process in determining export price costing. Explain how different INCOTERMS differ from one another in this respect -Discuss briefly the use of trade terms in export market -Evaluate the effect of price differentials duty, consumer action and grey imports on an export market Explain the role of pricing in distribution and demand. [...]

[...] Optional 'extras' increase the overall price of the product or service. For example airlines will charge for optional extras such as guaranteeing a window seat or reserving a row of seats next to each other. Captive Product Pricing Where products have complements, companies will charge a premium price where the consumer is captured. For example a razor manufacturer will charge a low price and recoup its margin (and more) from the sale of the only design of blades which fit the razor. [...]

[...] Payment terms, delivery and after-sale servicing are important considerations. Include a proviso in your price list - "Prices subject to change". Consider currency fluctuations when preparing the price list. Do not include "suggested retail prices" on your wholesale price list unless requested as this is not well received, especially in North America. When preparing an export price list, in many cases, the following costs may apply. These costs should be added to each item in your product line to be exported: o Fixed costs; o Shipping ex factory to port of departure; o Air or sea freight and insurance; o Import duty and taxes; o Customs clearance/broker fee; o Ground transportation from port of entry to warehouse or customer, as appropriate; o Warehousing fees, if applicable; o Agent's commission or importer's mark-up, as appropriate; o Break-bulk fees, if third party warehouse applies; o Packaging and labelling to local standards; o Product certification, if required; o Product liability insurance; o Advertising costs; o Promotional costs. [...]

[...] The net effect of this pricing approach may be that the export price escalates into an uncompetitive range Marginal cost pricing. This method considers the direct, out-of- pocket expenses of producing and selling products for export as a floor beneath which prices cannot be set without incurring a loss. This would include any product modifications plus economy of scale savings as the incremental cost of producing additional products for export should be lower than the earlier average production costs for the domestic market Buyer based. [...]