CHAPTER 18 Global Pricing and Distribution Strategies 18

CHAPTER 18 Global Pricing and Distribution Strategies 18 -1 International Pricing Activities 18 -2 Global Distribution Activities 18 -3 Moving Goods Around the World © 2011 South-Western | Cengage Learning

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 LESSON 18 -1 International Pricing Activities GOALS l Identify the factors that must be considered by businesses when setting prices. l Describe pricing methods used by businesses. l Discuss some pricing factors that are unique to global markets. © 2011 South-Western | Cengage Learning 2

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Price Planning for International Marketing l Costs l Consumer demand l Competition © 2011 South-Western | Cengage Learning 3

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Pricing Methods l Markup pricing l New product pricing l Psychological pricing © 2011 South-Western | Cengage Learning 4

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Markup Pricing l Markup is the amount added to the cost of the product to determine the selling price. Example: Cost $50. 00 × × Percentage 40% Cost $50. 00 + + Markup $20. 00 = = Markup $20. 00 = Selling Price = $70. 00 © 2011 South-Western | Cengage Learning 5

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 New Product Pricing l Competitive pricing l Skim pricing l Penetration pricing © 2011 South-Western | Cengage Learning 6

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Psychological Pricing l Promotional pricing l Loss leader l Odd-even pricing l Prestige pricing l Price lining © 2011 South-Western | Cengage Learning 7

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Discount Pricing l Seasonal discounts l Cash discounts l Quantity discounts l Trade discounts © 2011 South-Western | Cengage Learning 8

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Pricing in Global Markets l Countertrade l Dumping © 2011 South-Western | Cengage Learning 9

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 LESSON 18 -2 Global Distribution Activities GOALS l Contrast direct and indirect channels of distribution. l Describe the activities of agents, wholesalers, and retailers. l Explain the role played by global intermediaries. © 2011 South-Western | Cengage Learning 10

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Distribution Channels l A distribution channel is the path taken by a good or service to get from the producer to the final user. l In a direct distribution channel, producers sell goods or services directly to the final user. l An indirect distribution channel occurs when goods or services are sold with the use of one or more intermediaries between the producer and the consumer. © 2011 South-Western | Cengage Learning 11

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Common Distribution Channels © 2011 South-Western | Cengage Learning 12

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Distribution Channel Members l Agents l Wholesalers l Retailers l Convenience stores l General merchandise retailers l Specialty stores l Direct sellers l Online retailers l Automatic vending © 2011 South-Western | Cengage Learning 13

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Functions of Wholesalers FUNCTION DESCRIPTION Providing information Communicating between manufacturers and retailers Processing orders Providing needed products for retailers to sell Storing and transportation Maintaining warehouses and shipping capabilities Financing and taking possession Accepting ownership of finished goods and extending credit to customers Promoting Advertising and selling to retailers and helping retailers promote to their consumers © 2011 South-Western | Cengage Learning 14

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Services Provided by Retailers SERVICES DESCRIPTION Product selection Variety of sizes, styles, and brands Convenience Location, hours of operation, parking availability, and ease of making purchases Product quality Product excellence and reputation Sales staff assistance Information about product features, uses, and store policies Special services Delivery, ease of exchanging or returning items, and special sales © 2011 South-Western | Cengage Learning 15

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Global Intermediaries l Export management company (EMC) l Export trading company (ETC) l Freight forwarder l Customs broker © 2011 South-Western | Cengage Learning 16

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 LESSON 18 -3 Moving Goods Around The World GOALS l Summarize the shipping requirements for international distribution. l Compare transportation modes available to international distributors. © 2011 South-Western | Cengage Learning 17

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Preparing for Shipping l Packing and labeling l Documentation l Bill of lading l Certificate of origin l Export declaration l Destination control statement l Insurance certificate © 2011 South-Western | Cengage Learning 18

CHAPTER INTERNATIONAL BUSINESS, 4 e 18 Transportation in the Global Market l Motor carrier l Railroad l Waterway l Pipeline l Air carrier l Intermodal movements © 2011 South-Western | Cengage Learning 19