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Chapter 16

Chapter 16. Pricing Strategies: Basic Decisions. Chapter Outline. The Role of Price Price Standardization. Chapter Outline. Pricing Decisions - Supply and Demand - Cost - Elasticity and Cross Elasticity of Demand - Exchange Rate - Market Share - Tariffs and Distribution Costs

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Chapter 16

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  1. Chapter 16 Pricing Strategies: Basic Decisions

  2. Chapter Outline • The Role of Price • Price Standardization

  3. Chapter Outline • Pricing Decisions - Supply and Demand - Cost - Elasticity and Cross Elasticity of Demand - Exchange Rate - Market Share - Tariffs and Distribution Costs - Culture

  4. Chapter Outline • Alternative Pricing Strategies • Dumping - Types of Dumping - Legal Aspect of Dumping - How to Dump (Legally and Illegally) • Price Distortion • Inflation • Transfer Pricing

  5. Pricing Decisions • Supply and Demand • Cost • Elasticity and Cross Elasticity of Demand • Exchange Rate • Market Share • Tariffs and Distribution Costs • Culture

  6. Dumping • charging different prices for the same product in similar markets • unfair price • below production cost • below home-country price • harm to host-country companies

  7. Transfer Pricing • prices used by the parent firm and subsidiaries when trading among themselves Transfer Pricing Methods • direct manufacturing costs • direct manufacturing costs plus markup • market-based transfer price • arm's length price

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