Two basic factors determine the boundaries within which prices should be set
1) Product cost—price floor, minimum price—lead dumping investigation
2) Price ceiling—maximum price
Between the lower and upper boundary for every product there is an optimum price
The market skimming pricing strategy is often part of a deliberate attempt to reach a market segment that is willing to pay a premium price for a particular brand or for a specialized or unique product. E.g. LVMH and other luxury goods.
The skimming pricing strategy is also appropriate in the introductory phase of the product life cycle when both production capacity and competition are limited. Electric industry. 新产品 价格高， 新产品出来后 ...view middle of the document...
Are the firm’s prices likely to be viewed by the host-country government as reasonable or exploitative?
8. Do the foreign country’s dumping laws pose a problem?
Companies use cost-plus or cost-based pricing when selling goods outside their home-country markets.
Cost-based pricing is based on an analysis of internal (e.g., materials, labor, testing) and external costs.
Rigid cost-plus pricing set prices without regard to the eight considerations listed previously. They make no adjustments to reflect market conditions outside the home country. The advantage is simplicity. Disadvantage it ignores demand and competitive conditions in target markets; the risk is that prices will either be set too high or too low. (used by non-experienced exporter)
Flexible cost-plus pricing is used to ensure that prices are competitive in the context of the particular market environment. (Used by experienced exporter).
Flexible cost-plus pricing sometimes incorporates the estimated future cost method to establish the future cost for all component elements.
Ex-works (EXW) refers to a transaction in which the buyer takes delivery at the...