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Factors Affecting Pricing Decision in International Market

The three primary factors that determine pricing decision in international marketing are:

  1. Cost of the product or service.
  2. CompetitionĀ for the product or service in the foreign market.
  3. Demand for the product in the overseas market.

Pricing decision

Also, some other specific factors mentioned below, are to be considered in pricing for product and services in international marketing.

  1. Exchange rate changes in relations to the target market.
  2. International transportation cost-keepingĀ in view the mode of transport used.
  3. The International channel of distribution costs in respect of the product concerned.
  4. Nature of international market regarding trade practices and marketing environment, both at micro and macro levels.
  5. Government trade policies and price regulations including anti-dumping legislation.
  6. Varying inflation rates and interest rates in different countries.
  7. Global marketing requirements which may warrant charging the same price in all overseas markets.

These factors should be kept in view while formulating and adjusting prices for products and services in international marketing.

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