COMMERCE 4SA3 Lecture Notes - Air Canada, Vending Machine, Incoterms
21 Jun 2012
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Document Summary
2 chapters not discussed in class, but need to read. Standard worldwide pricing: group all costs together and then convert using the exchange rate. Dual (two tiered) pricing: all fixed costs allocated to home market and variable costs from foreign market. Market differentiated pricing: i. e. penetration pricing strategy to capture market share. Such as limited time offer meaning you can"t get charged with dumping because the next shipment will be higher priced. Looking at everything to determine the price for that market. Transfer pricing: shipping products between one organization"s sbus. However, more of a problem internationally; could take advantage on tax laws. Reducing price of a brand name can negatively impact the brand"s reputation. Incoterms: when we send invoices to another country, we make sure to use the international recognized wording. Exports: two different costs you incur: market entry (one-time costs, market maintenance (ongoing) Middleman needs to treat the product the same way you do.
