Chapter 15: Pricing Strategies and Cost Analysis
Chapter 15 Introduction
Learning Objectives
After reading this chapter, you should be able to
- Explain what factors determine the price and elaborate on various pricing strategies.
- Explain international pricing constraints and legislation.
- Discuss internationally accepted trade terms and codes.
- Identify cost elements that apply to international trade.
Think About It!
Video: Basic Pricing Strategies
Before reading this chapter, watch this video outlining factors to consider when determining the price of a product.
Source: Jason Richea. [2013, May 28]. Determining the price – Factors to consider. [Video]. YouTube. https://www.youtube.com/watch?v=UqFPWeCeFCI
Reflection Questions
Before we begin, we encourage you to reflect on the following questions:
- Which key components are involved in determining the price?
- Why is it important to determine the correct cost of a product, before setting the price?
Introduction
Businesses enter international markets to earn profits; however, not all businesses succeed in doing so. In many cases, managers fail to properly identify their import and/or export costs or the price that properly reflects the product cost and the firm’s required profit margin. Many organizations are simply unaware of the extra costs associated with international trade. Learning about all cost elements is a necessary component of determining the viability of an international venture.
