lesson 11: export pricing and the significance of costing Flashcards
Setting the price of a product is one of the critical decisions that you have to make in the export arena
true
- from the businessperson’s point of view is the monetary figure for which he/she sells his/her product to his/her customers
- It provides for the recovery of costs of the elements of the marketing mix and It generates revenue for the firm
- from the customers is what he/she is willing to pay and not what the businessperson is willing to change
PRICE
BASIC CONCEPT OF PRICE
- profit maximization for the firm
- satisfaction for the customers
controllable factors affecting price
- cost
- volume
- company objectives
- profit margins
uncontrollable factors affecting price
- market demand
- competition
- others
- Most companies make _____ the dominant factor
- Any management wants to charge a price that will, at least, cover the total cost of manufacturing the product
cost
refers not just to production cost but also to selling and distribution costs, as well as marketing support cost earmarked for sales promotion, advertising, etc.
cost
Refers to the customer’s reaction to your product and price
- It is an important factor to consider because it will help you set the ceiling or the maximum price of your product
demand
The strength and the behavior of _______ particularly the price and quality offered by competitors, are key factors that must be taken into account when setting the export price
competition
Pertains to how your product will reach the target consumer
channel of distribution
These are the goods you want to achieve in pricing
company objectives
according to the _______, two main pricing policies are open to a firm. These are _______
International Trade Center’s Handbook on Pricing and quoting (2002) / cost-oriented pricing and market-oriented pricing.
- this is a simple approach to pricing
- To a given cost, you simply add a percentage in absolute margin or rate of profit to determine the selling price
cost-oriented pricing
It treats the export price of the product in the context of the market and the demand for the item
market-oriented pricing
Is the simplest pricing method using a base cost figure per unit to which a mark-up is added to cover unassigned cost and to provide a profit margin
COST-PLUS PRICING
is reached when the income line (sales) crosses the total cost line, so that income and total costs are equal and neither a profit nor a loss is made, and thus, the enterprise breaks even
- Breakeven point
A person/entity who/which performs portside cargo handling operations,
arrastre
is the amount assessed against the cargo of a vessel engaged in the foreign trade, based on the quantity, weight or measure received and/or discharged by such vessel. The owner, consignee, or agent of either, of the merchandise is the person liable for such charge.
Wharfage charge
