Topic 6, INTERNATIONAL PRICING DECISIONS

Question 1

INTERNATIONAL PRICING STRATEGIES

Define ‘Skimming’

Answer 1

High prices are charged to ‘skim the cream’ from the top of the market, to achieve the highest contribution in a short time.

Unique product and some segments are willing to pay a higher price (low market share)

Question 2

INTERNATIONAL PRICING STRATEGIES

Define ‘Market pricing’

Answer 2

Setting the price of a product or service according to the market price.

Question 3

INTERNATIONAL PRICING STRATEGIES

Define ‘Penetration pricing’

Answer 3

To capture market shares offering products a low prices.

Question 4

Pricing across countries

Define ‘standardization’ and ‘differentiation’

Answer 4

Standardization: to achieve a similar positioning in different markets by adopting largely a standardized pricing.

Differentiation: to maximize profitability by adapting pricing to different market conditions.

Question 5

Define ‘INCOTERMS’

Answer 5

internationally accepted definitions for terms of sale, set by the
International Chamber of Commerce (ICC).

They define the responsibilities of buyer and seller.

Question 6

Which is the pricing strategy used by Apple in international markets?

Answer 6

Apple’s pricing strategy relies on product differentiation, which focuses on making products unique and attractive to its consumer base.