Chapter 12: International Pricing Of IPad Air

Chapter 12international Pricingex Global Pricing Of Ipad Airwhy Unif

Chapter 12 international Pricing EX: Global Pricing of iPad Air Why uniform standard pricing is difficult in global markets? What are the patterns of global pricing across national markets / or regions? Reasons / factors contribute to the price discrepancy in global markets How prices are set? PF = Price (sales) - cost Price Escalation in Global Markets Causes The effect Gray market – take advantage of price differentials in global markets (EX) Extra Credit Homework: Issues of “Gray” Marketing Channels in International Market What is “gray” marketing? What cause gray marketing? Problems and challenges related to gray marketing… Provide an example (Please attached the article, or a photo of the product that you discuss in the paper.) Your suggestions (solutions/strategies) for managing the gray marketing. Format: One page write up, double space. Submit to iLearn. File name format: Gray Market EX - your name.doc Factors in International Pricing Firm level factors - strategic objectives & competitive pressure - cost structure Market-specific factors - consumer’s ability to buy - government intervention - distribution channel - local competition & price cutting pressure - effects of exchange rate Product-specific factors - demand - product life cycle stage - product line Strategic Objective and Pricing Proctor & Gamble Giant US manufacturer of soap, detergent, shampoo, and food Has a minor presence in India Objective: To develop a stronger presence and market share Strategy: lower prices sharply (cutting detergent price in half) Responses from its top competitor - Unilever Strategic Objective and Pricing Unilever’s response Matched P & G’s price cut in detergents Lowered its shampoo prices as well Launched new products that suited to Indian consumers’ needs - cleaning powder works well /w only 2 buckets of water (/4) - running water is scarce in large cities Pioneered the small affordable sachets of detergent, shampoo, and toothpaste (price as little as penny apiece) Penetrated the low-income consumers across India - 300 million in 2015 - $20 billion market for soap, detergent, and snack food Strategic Objective and Pricing Unilever’s response Scale economy advantage – low manufacturing cost - 10 times larger than P & G in India - $2.2b sales Employs 20,000 wholesalers and distributors - may, at times, make deliveries by bicycle - reaches 2.5 million retail outlets - employs women (over 6,000) to sell door-to-door Localized advertising - use Indian “Bollywood” starts Demand and Price Elasticity Demand of a product Affected by: - ability to buy - preference, taste, attitude - supply and competition Demand elasticity Skimming vs. Penetration Pricing Skimming Pricing High level price, low sales volumes with higher profit margins Penetration Pricing Low price to attract larger number of consumers Higher unit volumes result in larger total profit (even though margin per unit is low) Pros and cons? Pricing Too Low: Dumping Dumping A firm is judged to be pricing below costs Under US international trade law, firms can petition the US Intl. Trade Commission Can impose antidumping/ countervailing duties Examples: - lumber from Canada - orange juice from Brazil - wooden bedroom furniture from China - minivans from Japan Target Pricing Tata Nano – the world’s cheapest car India auto market: - high level of unmet demand of consumers - couldn’t afford the higher-priced models available in India Worked backward from the target price of 110,000 rupees ($2,500) to determine product features Priority features - safe to drive in bad weather Nice to have features - air-conditioning - power windows To build scale economies, offers in only three colors (red, yellow, silver) EX: Your Pricing Strategy What’s your pricing strategy? Price for your product/service $______? Factors contribute to this decision Strategic reasons? Redd 2 Thurl Redd ENG /21/20 A Life of Significance and Worth Life is a challenge, and most people are determined to overcome the challenges posed to them by experience and live a better life. Better is subjective; there are divergent opinions on what a meaningful life is. However, different people try to live a meaningful life as possible and for the people around them. Regardless of the differing opinions on significant experience, I believe living a life of significance, and worth positively touches many people as possible in different ways. Therefore, living a purposeful life creates a difference, dying with a legacy or positively impacting society. Living a meaningful life can better be defined by people around an individual or those who can see the different levels of interaction an individual has with society. Therefore, the community plays a significant role in defining whether an individual lived a significant or a worthy life or not. Ideally, a worthy life is that which makes crucial marks in the lives of people. For instance, in a community where people live, there are different kinds of people. Some can live the lives they desire while others live miserable under conditions they do not wish—those who are less fortunate in society desire and empowerment to live a worthy life. People claiming to live significant lives have a moral duty to empower them to live a better experience. I am not saying that living a decent life is about helping others in need. Still, it leans more towards fruitful interaction with such community members and offering solutions where possible. The wealth and material aspects of living a meaningful life are essential, but it is not entirely resting. It is necessary to have the material possessions to make a mark in other's lives. Consequently, it amplifies the process of living a meaningful life and worthy. Material possession is useful, but there is a need to consider the willingness within a person. Many wealthy people have lived miserable lives without significance and worth. Some have died wishing they were never wealthy in the first place. Some are wealthy and curse their lives day in day out. Therefore, it is necessary to balance knowing how to live a meaningful life and material possession. However, the bottom line is wealth is essential, and people should strive to make the best out of life to become wealthy. Achieving a life of significance and worth is possible for everyone that wishes to leave a positive mark in society. People have different talents, gifts, and natural abilities that they can use to impact humanity. One does not need to move every life in the company. But transforming and changing a single life in a community is worth living. It is all about the willingness and ability to effectively discovering their purpose in life. Self-consciousness and living with compassion can easily be attained by everyone regardless of their level in society. This illustrates that living a worthy and significant experience is all about knowing what is essential and taking an active role in achieving critical goals. In conclusion, a life of significance and worth can be easily achieved by society. Life is complicated, and living it the best is everyone's desire. I am positively touching on one life to the other plays a significant role in living a life of purpose. Actively taking part in the societal demands and changes is understanding for living a worthy and life with significance. Therefore, everyone has to play in society towards having an experience of importance and worth living. Reflection and Application Report Purpose: The objective of this exercise is to help you internalize the knowledge you learned and apply to your career. In this process, you develop your critical thinking skills. Note: To complete this assignment, you will need to: 1. Submit one ppt file – the Reflection and Application Report 2. Submit one word file – three quiz questions (multiple choices) 3. Respond to at least one peer classmate’s post (Reflection Report) The Development of Critical Thinking Process Instruction Step 1: Observation and recognition Choose one concept/topic that you learn from this week’s lecture or textbook. Step 2: Comprehension 1. Explain the meaning of the concept. 2. Summarize what you have learned or understood about this topic. Step 3: Reflection and Application Present a news/event/or a business example that can: 1. Further comprehend your understanding of this topic/concept 2. Add insights to this topic/concept 3. Serve as a great real life example to resonate what you learned Document Format ppt slides 1. Make your ppt slides informative so that one can easily understand your viewpoints. 2. Make your slides as visual as possible 3. If applicable, provide examples with statistic facts . 4. File name: Chapter # - your name.ppt Step 4: Knowledge Internalization Document format – word file 1. Base on your understanding of this topic; create three quiz questions (multiple choice). 2. This a process of knowledge internationalization by which you digest the information and recreate value. 3. Submit your word file. 4. File name: Chapter # quizzes – your name.doc Your quiz questions may be chosen for Exam 1 and Exam 2. Submission 1. Due on Sunday midnight of the week 2. Post your Report on iLearn 3. Give a thought provoking title for your post. (This will attract more views and feedback from your peers.) 4. Write a brief description about your topic in the description box. 5. Attach your ppt file and word file. To earn Participation grades 1. Read and respond to at least one peer classmate’s post. 2. You can ask questions, adding insights, or offering different perspectives. 3. Your feedback needs to add value, but not just “I agree” or “I disagree” comments.

Paper For Above instruction

International pricing strategies are complex and multifaceted, influenced by numerous factors including firm-specific, market-specific, and product-specific considerations. A major challenge in global pricing is establishing a uniform standard price, primarily due to variations in economic conditions, consumer purchasing power, regulatory environments, and competitive landscapes across different regions. This variability creates price discrepancies that complicate the implementation of a single global price for products like the Apple iPad Air.

One of the primary reasons for these discrepancies is the differences in consumers' ability to pay. In developed markets such as the United States or Western Europe, consumers often have higher disposable incomes, allowing for higher pricing strategies. Conversely, in emerging markets like India, price sensitivity is higher, necessitating lower prices to attract consumers and maintain market share. Furthermore, government intervention, tariffs, taxes, and different regulatory frameworks greatly influence pricing strategies, creating additional layers of complexity.

Global pricing patterns often follow regional or national trends, aligning with local economic conditions and consumer behavior. For example, in Asia, companies might adopt a penetration pricing approach for emerging markets, offering lower prices to encourage adoption among low-income consumers. In contrast, in mature markets, a skimming strategy might be used where higher prices are charged initially, gradually lowering over time.

Price escalation in global markets is also a significant issue, driven by factors such as transportation costs, import duties, and currency fluctuations. These escalations increase the final retail price, affecting profit margins and competitiveness. For instance, Apple’s pricing of the iPad Air varies significantly across countries due to tariffs and taxes, even when production costs remain constant.

The concept of the gray market is further complicating global pricing dynamics. Gray marketing involves the illegal or unauthorized distribution of branded products through channels not authorized by the original manufacturer. These channels exploit price differentials across regions, allowing lower-priced products from one country to be sold in markets where prices are higher, thus undermining authorized distribution and impacting brand perception and profitability.

Strategies for managing gray marketing include building strong relationships with authorized distributors, implementing anti-diversion policies, and employing technological solutions like product authentication and digital tracking. These measures help safeguard pricing strategies and ensure fair competition within authorized channels.

In terms of pricing, firms weigh multiple factors such as strategic objectives, competitive pressures, and cost structures. For example, Procter & Gamble’s aggressive price cuts in India aimed to increase market share, prompting responses from competitors like Unilever, which also adopted localized pricing and marketing strategies, such as affordable sachets and employing Bollywood celebrities to appeal to local consumers.

International pricing is also influenced by product lifecycle considerations. During introduction stages, higher prices can be used to recover development costs, whereas in mature stages, lower prices might be necessary to defend market share or respond to competitors. Strategies like skimming and penetration pricing assist firms in optimizing revenue based on market conditions and product demand elasticity.

In conclusion, international pricing must carefully balance multiple, often conflicting, factors. Firms need to consider local economic conditions, regulatory constraints, competitive actions, and regional consumer behavior to set effective prices. Managing gray markets, understanding demand elasticity, and choosing appropriate pricing strategies are essential for maintaining profitability and market competitiveness in the global landscape.

References

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