Pricing of Export Goods
Pricing of export goods is the first and most important step to enter the export field. Domestic and foreign pricing environment are very different. In foreign pricing, we pay attention to factors such as foreign market demand, how foreign markets function, production costs, export costs, competitive conditions in foreign markets, transportation costs, insurance, etc.
Pricing Strategy for Export Goods
When we intend to enter the field of export, we must examine various factors to prepare the best strategy in the field of pricing. During the market research process, we can examine all the variables that affect the price of our products and our profitability. According to the goals of the company and the strategies set for the business, we can analyze factors such as the competitive market, market demand, production costs, and so on. These reviews may cause different pricing at the domestic and global levels. Additional costs can also be considered as another effective factor in pricing. These costs generally include costs imposed by importing countries and include things such as customs fees, currency fluctuations, added value, etc.
Factors Affecting Pricing
In order to prepare a suitable strategy for the pricing of export goods, we need to examine some of the factors affecting it more closely.
First, we must define our goal of entering the foreign market. Whether we are looking to enter a new market or looking to gain profit and increase the production of our business area. This goal setting will help us to know what exactly our attention should be focused on. For example, pricing in the export of goods to a developing country will be different from pricing in European countries.
Estimating the costs of producing the product and supplying it to the market, and especially supplying it to competitive markets at the global level, will indicate whether entering the field of export will be economically justified or not.
3. Examine the Amount of Market Demand
The amount of demand of the target market can influence the pricing and reduce or increase the price. Sometimes the demand for a product may be so high that the low price is not visible. Also, currency fluctuations may reduce the demand for products in the market.
Examining the competitive environment is an important point in product pricing. Because if we face potential competitors in the market of the target country, we are forced to reduce the price of our products. And on the contrary, if the product offered by us is unique, we can announce a higher price than the domestic market.
5. Price Changes in Export Goods
Exporters may have to change the price of their export goods due to market conditions and price changes related to raw materials, exchange rate, inflation, etc. In such a situation, price changes should be announced to customers and partners and we should give them enough time to explain the reason for these changes to our customers.
Up To Sum
The process of pricing export goods is much more complicated than pricing domestic goods. Because the factors affecting the pricing of goods at the international level are affected by various factors such as currency changes, complexities and inefficiencies of the target market, costs related to the transportation and export of goods, customs costs, packaging, insurance and other such factors. In addition, it is not possible to say with certainty a fixed rate for export goods. Therefore, the pricing of export goods does not require extensive and detailed and comprehensive investigations.