Podcast
Questions and Answers
Which costing methodology is more likely to be used by fully involved global players to ensure long-term corporate viability?
Which costing methodology is more likely to be used by fully involved global players to ensure long-term corporate viability?
- Full costing (correct)
- Standard costing
- Marginal costing
- Variable costing
What is the purpose of establishing freight terms (INCO terms) when developing a pricing structure?
What is the purpose of establishing freight terms (INCO terms) when developing a pricing structure?
- To negotiate the distribution channels and logistics providers
- To determine the international freight/logistics costs to be included in the price quotations
- To comply with regulatory and political environments in the foreign market
- To identify which costs the manufacturer/exporter will pay and which costs the foreign buyer will pay (correct)
Which factor is most important for a product to compete effectively in a foreign market?
Which factor is most important for a product to compete effectively in a foreign market?
- Product differentiation
- Lower cost
- Improved customer service/serviceability
- All of the above (correct)
Which type of company is more likely to use variable costing when developing a pricing structure for international markets?
Which type of company is more likely to use variable costing when developing a pricing structure for international markets?
What is the primary purpose of considering market conditions when developing a pricing structure for international markets?
What is the primary purpose of considering market conditions when developing a pricing structure for international markets?
What is the primary reason for maintaining consistent pricing between international markets?
What is the primary reason for maintaining consistent pricing between international markets?
Which of the following is generally preferred in theory?
Which of the following is generally preferred in theory?
What is one of the reasons mentioned in the text for why product adaptation is often necessary in practice?
What is one of the reasons mentioned in the text for why product adaptation is often necessary in practice?
Which of the following is listed as a pressure to adapt products or services?
Which of the following is listed as a pressure to adapt products or services?
What is one of the questions posed in the text regarding product adaptation?
What is one of the questions posed in the text regarding product adaptation?
Which measurement system is mentioned in the text as a potential difference that may require product adaptation?
Which measurement system is mentioned in the text as a potential difference that may require product adaptation?
Based on the text, what is one of the benefits of a standardized product strategy?
Based on the text, what is one of the benefits of a standardized product strategy?
Which of the following is NOT a short-term solution for dealing with international pricing challenges?
Which of the following is NOT a short-term solution for dealing with international pricing challenges?
What is the main idea behind the Variable Pricing/Costing method (also known as the Marginal Cost Method)?
What is the main idea behind the Variable Pricing/Costing method (also known as the Marginal Cost Method)?
Which of the following is NOT a component of the Full Absorption Costing (Cost Plus) method?
Which of the following is NOT a component of the Full Absorption Costing (Cost Plus) method?
Which pricing method is best suited for funding corporate overhead and covering indirect costs in the long run?
Which pricing method is best suited for funding corporate overhead and covering indirect costs in the long run?
Which of the following is a strategy for dealing with international pricing challenges?
Which of the following is a strategy for dealing with international pricing challenges?
What is the key difference between the Full Absorption Costing (Cost Plus) method and the Variable Pricing/Costing (Marginal Cost) method?
What is the key difference between the Full Absorption Costing (Cost Plus) method and the Variable Pricing/Costing (Marginal Cost) method?
Flashcards
International Pricing Strategies
International Pricing Strategies
Methods used by companies to set prices for products sold internationally, considering factors like costs, market conditions, and product adaptations.
Full Costing
Full Costing
A pricing method that includes all production and non-production costs in determining price.
Variable Costing
Variable Costing
A pricing method that only includes variable production costs in determining price.
INCO Terms
INCO Terms
Signup and view all the flashcards
Pricing Structure
Pricing Structure
Signup and view all the flashcards
Standardized Product Strategy
Standardized Product Strategy
Signup and view all the flashcards
Product Adaptation
Product Adaptation
Signup and view all the flashcards
Technical Standards
Technical Standards
Signup and view all the flashcards
Market Conditions
Market Conditions
Signup and view all the flashcards
Product Differentiation
Product Differentiation
Signup and view all the flashcards
Lower Pricing
Lower Pricing
Signup and view all the flashcards
Innovative Pricing Structures
Innovative Pricing Structures
Signup and view all the flashcards
Discounts
Discounts
Signup and view all the flashcards
Promotions
Promotions
Signup and view all the flashcards
Representation
Representation
Signup and view all the flashcards
Full Absorption Pricing
Full Absorption Pricing
Signup and view all the flashcards
Variable Pricing
Variable Pricing
Signup and view all the flashcards
Distribution Ability
Distribution Ability
Signup and view all the flashcards
Consumer Expectations
Consumer Expectations
Signup and view all the flashcards
Study Notes
International Product and Pricing Strategies
- A fully involved global player may use full costing methodology to ensure long-term corporate viability, while smaller companies in early stages of international expansion may use variable costing.
Developing a Pricing Structure
- Identifying who pays what (manufacturer/exporter and foreign buyer) is crucial, and establishing freight terms using INCO Terms can help clarify this.
- Larger exporters may build international freight/logistics costs into price quotations to lower overall costs.
- Market conditions, including distribution ability, consumers' ability to buy, expectations, regulatory and political environments, industry structure, and competitive position, influence pricing.
Product Strategies: Standardization vs. Adaptation
- Standardized product strategy is preferred in theory to maximize economies of scale and reduce marketing, sales, and distribution expenses.
- However, adaptation is often necessary due to local consumer demands for products that meet specific needs and wants.
Pressures to Adapt Products or Services
- Differences in technical standards, including testing, metric vs. U.S. components, and licensing or trademark issues, may require adaptation.
- Adapting products or services can be risky and expensive.
Dealing with International Pricing Challenges
- Short-term solutions include product differentiation, lower pricing, innovative pricing structures, discounts, and promotions.
- Choosing representation based on pricing structure, challenging distribution rules, and using multiple distributors or a distributor and agent in the same market can help overcome challenges.
Full Absorption Pricing/Costing vs. Variable Pricing/Costing
- Full Absorption Pricing/Costing (Cost Plus Method) allocates all manufacturing and non-manufacturing costs for long-term corporate viability.
- Variable Pricing/Costing (Marginal Cost Method) only allocates costs directly related to production or sales of a product, aiming for profit maximization.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
