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Pricing in international markets

Checklist of factors impacting on pricing in international markets

  • Market positioning of product or service via price in the target market, e.g. high price to signal high value and exclusivity
  • Membership of tariff union such as the European Union: check all aspects of rules surrounding products or services originating in the union versus those imported from outside the union.
  • Prices already operating in home country where relevant
  • Currency exchange rates with other countries, both actual and potential
  • Costs of tariff and other barriers
  • Any variation in local taxes, including value added tax
  • Prices of similar products already available in the target country
  • Trade discounts and other special deals already operating in the target country, e.g. regular discounts off the manufacturer’s list price for reaching volume targets
  • Distributor markup already operating in the target country, i.e. the difference between the distributor’s price and the customer’s price
  • For multinationals, the prices at which goods are transferred between subsidiaries – called ‘transfer pricing.’
  • Availability of web-based selling structures and distributors both to reduce selling costs and to promote goods
  • Possibility of parallel trade pricing, i.e. goods imported from low-tax country into parallel country with higher taxes
  • Reaction of current competitors via price to new entrants.
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