Onkvisit S., Shaw J. International Marketing: Analysis and Strategy
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those who were aware of the campaign, their
responses showed that the company’s key attribute
dimensions improved significantly while measures
of negative attribute dimensions declined. In com-
parison, the other brands tracked did not show
positive movement. Thus the Subtitles campaign
has proved to be one of IBM’s longest and most
successful runs of the company’s image campaign
in recent history.
53
In designing a global advertisement, a marketer
should take certain attributes into account.
54
The
characteristics of a global advertisement are: (1) it
should be visual, (2) it must have some universal
appeal, (3) it must be adaptation-ready, (4) it com-
bines both standardization and localization, (5) it
assumes both homogeneity and heterogeneity, (6)
it combines efficiency with effectiveness, and (7) it
is simultaneously global and local.These character-
istics are essential in meeting the needs of the mar-
keter as well as the needs of worldwide consumers.
CONCLUSION
In developing countries, advertising is often viewed
as something wasteful. In socialist/communist
countries, it may be seen as incompatible with polit-
ical objectives. It is undeniable that certain adver-
tising practices are misleading, deceptive, and
wasteful. Just as undeniable, however, is that adver-
tising serves a useful function by providing cus-
tomers with relevant information for intelligent
decision making. Although the US style of advertis-
ing is not necessarily suitable for all other countries,
it does make a significant contribution to the high
standards of living in the USA.
US advertisers need to realize and understand
that foreign media are not always readily available.
Many of the media, especially the broadcast media,
are government operated and controlled for secu-
rity reasons. Broadcast media are considered
sensitive instruments because the equipment may
be used for espionage or for supporting a coup
attempt. It is a common practice for revolutionar-
ies staging a coup to seek control of radio and TV
stations for psychological warfare.
Even when foreign media are available,American
advertisers must appreciate their different style and
approach. Such media as outdoor, cinema, and rural
advertising are used extensively outside the USA.
Moreover, advertisers in many parts of the world
rely more on a repetitive effect than on sophistica-
tion within a message. Direct-action advertising and
the hard-sell approach may have to give way to an
indirect-action approach, emphasizing the reputa-
tion and image of a company or brand name even
though this usually does not result in immediate
sales.
Because of the variations found in advertising
regulations, media availability, media approaches,
and consumer characteristics, there is a high degree
of risk in employing standardized advertising on a
worldwide basis. Although a global advertisement
may have the advantage of lower cost, cost reduc-
tion should not always be the overriding motive.
Advertisers need to be less ethnocentric and to
show more consideration and regard for foreign
consumers.All advertisements, standardized or not,
should be tested for suitability for the intended
audience before being used in the marketplace.
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CASE 15.1 THE MARLBORO MAN: SHOULD WE MODIFY HIS IMAGE OVERSEAS?
Jeffrey A Fadiman, San José State University
The downfall of Winston was due in part to the broadcast ban on cigarette advertising. R.J. Reynolds had a dif-
ficult time adapting Winston’s appeal to the print media. In contrast, Marlboro did not have this problem, and
Philip Morris was able to use magazines and other print media to promote its Marlboro brand effectively.
Overtaking Winston in 1976, Marlboro is now the undisputed leader in both the USA and worldwide.
Marlboro’s success was quite spectacular. It was responsible for the transformation of Philip Morris from a
small tobacco company to the number-one cigarette company in the USA. But it was not an overnight success.
Initially introduced in a soft box with, among other filters, a red-cork tip, Marlboro had a female image which
made the brand unpopular among men.The company decided to make a few changes, which included the neutral-
cork tip and the addition of a flip-top, crush-proof box. Perhaps the most important change was the advertising
theme. Marlboro’s advertisements featured the rugged-looking men, tattooed laborers, and cowboys “who came
up the hard way.” These virile men usually told something about their he-man lives and explained why they chose
Marlboro. Philip Morris was extremely successful in creating a unique image that allowed a man to project himself
through the cigarettes he smoked. Winston, on the other hand, could not acquire this distinct image.
The Marlboro cowboy is now a legend. Most US consumers (including many others in all parts of the world)
are accustomed to seeing the Marlboro Man. All advertisements of the Marlboro line (full-flavored Marlboro,
Marlboro Lights, and Marlboro 100s) have one thing in common – the cowboy. He may ride a horse or he may
sit at a campfire. He may be alone or he may be with other cowboys. But he is always in the advertisements.The
image is so strong that the copy needs only a few words, shown in Figure 15.7. It is the cowboy that does all the
talking, though without actually speaking. Yet the message is readily understood.
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Figure 15.6
The Marlboro Man
Source:
Reprinted by permission of
Philip Morris USA.
Points to consider
Consider the Marlboro advertisement and select a certain country as your target market. Write a formal busi-
ness memo to a chief executive officer of a small international advertising agency in which you submit sugges-
tions about:
1 How would you modify the advertisement in order to make it more attractive to a selected target clientele
(identify) within the country you have chosen?
2 Why would each change you suggest help the product image to conform more closely to their expectations?
Note
: Rough sketches would be nice but are not necessary. Word-pictures can be drawn with equal skill. Simply
show each change you are making. It is the originality, imagination, and effectiveness of each suggestion, not your
artistic skill, that will count.
QUESTIONS
1 Cite some foreign regulations that restrict the use of either advertising in general or certain advertising
practices in particular, and offer the rationale for these regulations.
2 Why is it difficult in most countries to buy (a) TV time and (b) newspaper space?
3 Outside of the USA, why is radio probably the closest thing to a national medium of communication?
4 Although the USA is well known for the creation of many new media, what media are more popular over-
seas than in the USA?
5 Offer the arguments for each of these three schools of thought: standardization, individualization, and com-
promise.
6 Is there any empirical evidence to support standardized advertising (or its homogeneity assumption)?
7 Are standardization and market segmentation compatible strategies?
DISCUSSION ASSIGNMENTS AND MINICASES
1 Does advertising serve any useful purpose in developing countries and socialist/communist countries?
2 Explain how the programming approach of the US television industry may differ from those used in other
countries.
3 Do you think that there is a market for a world or international newspaper?
4 Many American consumers consider direct mail as junk mail, a term that is offensive to the direct market-
ing industry. At present, this medium is largely underdeveloped outside of the USA. What is your assessment
of the future of direct mail overseas?
5 As an advertising manager, do you plan to use a standardized advertisement?
6 Harman Kardon audio and video products are aimed at the high-end segment of the market. The company
has decided to advertise its products with the same graphic throughout the world. By producing basically
one advertisement in six languages (English, Dutch, French, German, Italian, and Japanese), the company
expected to save at least $200,000. The Zagoren Group was assigned the duty of coordinating the cooper-
ative effort.The US full-page version appearing in
Audio
and
Stereo Review
showed a Harman Kardon ampli-
fier on a grand piano with a black background and “The Components of High Performance” as the headline.
For this advertisement to be used overseas, should any changes be necessitated by production and other
requirements?
468
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NOTES
1 J. Craig Andrews, Srinivas Durvasula, and Richard G. Netemeyer,“Testing the Cross-national Applicability of
US and Russian Advertising Belief and Attitude Measures,”
Journal of Advertising
23 (March 1994):71–82.
2 Johny K. Johansson,“The Sense of ‘Nonsense’” Japanese TV Advertising,”
Journal of Advertising
23 (March
1994): 17–26.
3 Nicolaos E. Synodinos, Charles F. Keown, and Laurence W. Jacobs, “Transnational Advertising Practices: A
Survey of Leading Brand Advertisers in Fifteen Countries,”
Journal of Advertising Research
29 (April/May
1989): 43–50.
4 “Advertising US-style Adapts to New Market,”
We Mbi
, August 24 to September 6, 1992.
5 Alan K.Toulson, “British Ad Codes Set Hard Rules for Advertiers,”
Global Direct Marketing
, February 20,
1995, 3.
6 Johansson, “Japanese TV Advertising.”
7 Wayne Walley, “Have :15s Hit Their Peak?”
Advertising Age
, November 13, 1989, 16.
8 “MTV’s World,”
Business Week
, February 18, 2002, 81–4.
9 “Suddenly, the BBC is a World-Beater,”
Business Week
, April 28, 2003, 98.
10 “France Plans an All-News Broadcast,”
San José Mercury News
, May 13, 2003.
11 “Channel V Plans Move to Malaysia,”
Bangkok Post
, June 11, 2002.
12 “Time Warner Bows ‘Buns of Steel’ in UK,”
Global Direct Marketing
, March 13, 1995.
13 Han Jürgen Schaeffer,“Negotiating German Direct Marketing Laws,”
Global Direct Marketing
, January 23,
1995, 14.
14 Richard Miller, “How to Get Your Mail Shipped to Europe,”
DM News
, December 23, 1991, 26, 37.
15 “For Coke, Local Is It,”
Business Week,
July 3, 2000, 122.
16 Patrick D. Lynch and John C. Beck,“Profiles of Internet Buyers in 20 Countries: Evidence for Region-Specific
Strategies,”
Journal of International Business Studies
32 (fourth quarter, 2001): 725–48.
17 “Worldwide-Friendly Sites Draws Returns,”
Marketing News
, September 2, 2002, 24.
18 Patrick D. Lynch, Robert J. Kent, and Srini S. Srinivasan, “The Global Internet Shopper: Evidence from
Shopping Tasks in Twelve Countries,”
Journal of Advertising Research
41 (May to June 2001): 15–23.
19 Duaine Priestley, “E-Commerce: Challenges and Opportunities,”
Export America
, 34–35.
20 R. Crockett, “Surfing in Tongues,”
Business Week E.Biz
, December 11, 2000 EB 18.
21 Kelichi Koseki, “Marketing Strategies as Adopted by Ajinomoto in Southeast Asia,”
Journal of Advertising
Research
30 (April/May 1990): 31–4.
22 “Dewar’s Prifiles Travel Well,”
Advertising Age
, August 14, 1989, 28.
23 For a comprehensive review of the theoretical issues and empirical evidence, see Sak Onkvisit and John J.
Shaw, “Standardized International Advertising: A Review and Critical Evaluation of the Theoretical and
Empirical Evidence,”
Columbia Journal of World Business
22 (fall 1987): 43–55.
24 Subhash C. Jain, “Standardization of International Marketing Strategy: Some Research Hypotheses,”
Journal of Marketing
53 (January 1989): 70–9.
25 Warren J. Keegan, “Multinational Product Planning: Strategic Alternatives,”
Journal of Marketing
33
(January 1969): 58–62.
26 “A Little Washing Machine That Won’t Shred a Sari,”
Business Week
, June 3, 1991, 100.
27 Klaus Backhaus, Katrin Muhlfeld, and Jenny Van Doorn, “Consumer Perspectives on Standardization in
International Advertising: A Student Sample,”
Journal of Advertising Research
41 (September to October
2001): 53–61.
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28 Tom Duncan and Jyotika Ramaprasad, “Standardized Multinational Advertising: The Influencing Factors,”
Journal of Advertising
, 24 (fall 1995): 55–68.
29 Young Sook Moon and George R. Franke,“Cultural Influences on Agency Practitioners’ Ethical Perceptions:
A Comparison of Korea and the U.S.,”
Journal of Advertising
29 (spring 2000): 51–64.
30 Onkvisit and Shaw, “Standardized International Advertising.”
31 Marinel Gerritsen
et al
., “English in Dutch Commercials: Not Understood and Not Appreciated,”
Journal of
Advertising Research
, (July to August 2000): 17–000.
32 Michel Laroche
et al
., “A Model of Advertising Standardization in Multinational Corporations,”
Journal of
International Business Studies
32 (second quarter, 2001): 249–66.
33 Kelly Hewett and William O. Bearden, “Dependence, Trust, and Relational Behavior on the Part of Foreign
Subsidiary Marketing Operations: Implications for Managing Global Marketing Operations,”
Journal of
Marketing
65 (October 2001): 51–66.
34 Salah H. Hassan and Roger D. Blackwell,“Competitive Global Market Segmentation,” in
Global Marketing:
Perspectives and Cases
, ed. Salah S. Hassan and Roger D. Blackwell (Fort Worth,TX: Dryden Press, 1994),
53–75; H. Rao Unnava
et al
., “Communications in Global Markets,” in
Global Marketing: Perspectives and
Cases
, ed. Salah S. Hassan and Roger D. Blackwell (Fort Worth, TX: Dryden Press, 1994), 253–71.
35 Niraj Dawar and Philip Parker, “Marketing Universals: Consumers’ Use of Brand Name, Price, Physical
Appearance, and Retailer Reputation as Signals of Product Quality,”
Journal of Marketing
58 (April 1994):
81–95.
36 For a list of these studies, see the 3rd Edition of this textbook.
37 Carl Arthur Solberg, “The Perennial Issue of Adaptation or Standardization of International Marketing
Communication: Organizational Contingencies and Performance,”
Journal of International Marketing
(September 2002): 1–21.
38 Mindy F. Ji and James U. McNeal, “How Chinese Children’s Commercials Differ from Those of the USA: A
Content Analysis,”
Journal of Advertising
30 (fall 2001): 79–92.
39 Carolyn A. Lin, “Cultural Values Reflected in Chinese and American Television Advertising,”
Journal of
Advertising
30 (winter 2001): 83–94.
40 Michael L. Maynard and Charles R.Taylor,“Girlish Images Across Cultures: Analyzing Japanese Versus U.S.
Seventeen
Magazine Ads,”
Journal of Advertising
28 (spring 1999): 39–64.
41 Katharina M. Dallmann, “Targeting Women in German and Japanese Magazine Advertising: A Difference-
in-differences Approach,”
European Journal of Marketing
35 (No. 11, 2001): 1320–41.
42 Laura M. Milner and James M. Collins, “Sex-role Portrayals and the Gender of Nations,”
Journal of
Advertising
29 (spring 2000): 67–73.
43 Fahad S. Al-Olayan and Kiran Karande, “A Content Analysis of Magazine Advertisements from the United
States and the Arab World,”
Journal of Advertising
29 (fall 2000): 69–82.
44 Greg Harris and Suleiman Attour, “The International Advertising Practices of Multinational Companies: A
Content Analysis Study,”
European Journal of Marketing
37 (No. 1, 2003): 154–68.
45 Stephen J. Gould, Pola B. Gupta, and Sonja Grabner-Krauter, “Product Placements in Movies: A Cross-
Cultural Analysis of Austrian, French and American Consumers’ Attitudes toward This Emerging,
International Promotional Medium,”
Journal of Advertising
29 (winter 2000): 41–58.
46 “The Rumble Heard Round the World: Harleys,”
Business Week
, May 24, 1993, 58, 60.
47 Sak Onkvisit and John J. Shaw, “Standardized International Advertising: Some Research Issues and
Implications,”
Journal of Advertising Research
39 (November/December 1999): 19–24.
48 “More Trade, More Nations,”
Business Week
, March 19, 2001, 32.
49 “Up Front,”
Business Week
, May 1, 2000.
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50 “The Next Oil Frontier,”
Business Week
, May 27, 2002, 52–4.
51 Harold M. Spielman, “Local Partnerships: The Strategic Asset in Multicultural Research,”
Journal of
Advertising Research
35 (January/February 1995): RC8–15.
52 “Goodbye Global,”
Advertising Age
, November 16, 1987, 22, 36.
53 Wayne R. McCullough, “Global Advertising Which Acts Locally: The IBM Subtitle Campaign,”
Journal of
Advertising Research
36 (May/June 1996): 11–15.
54 Sak Onkvisit and John J. Shaw,“Marketing/Advertising Concepts and Principles in the International Context:
Universal or Unique?” in
New Directions in International Advertising Research
,
Advances in International
Marketing
, Vol. 12, ed. Charles R. Taylor (Amsterdam: JAI, 2002), 85–99.
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472
Overseas operations should be told never to forget three no’s. Never get involved in legal issues,
never allow the formation of labor unions, and never fail to collect accounts receivable.
Takashi Kiuchi, General Manager of Planning and Administration,
International Operations Group, Mitsubishi Electric Corporation
CHAPTER OUTLINE
■ The role of price
■ Price standardization
■ Pricing decisions
Supply and demand
Cost
Elasticity and cross-elasticity of demand
Exchange rate
Market share
Tariffs and distribution costs
Culture
■ Alternative pricing strategies
■ Dumping
Types of dumping
Legal aspect of dumping
How to dump (legally and illegally)
■ Price distortion
■ Inflation
■ Transfer pricing
■ Conclusion
■ Case 16.1 Blood diamonds
Pricing strategies
Basic decisions
Chapter 16
Price is an integral part of a product – a product
cannot exist without a price. It is difficult to think
or talk about a product without considering
its price. Price is important because it affects
demand, and an inverse relationship between the
two usually prevails. Price also affects the larger
economy because inflation is caused by rapid
price increases.Yet among the marketing decision
variables,price has received the least attention.“The
export-pricing literature is characterized by a
distinct lack of sound theoretical and empirical
works.”
1
Price, however, is no more important than the
other three Ps. One should not forget that price
should never be isolated from the other parts of
the marketing mix. Price should never be treated
as an isolated factor.
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PRICING STRATEGIES
PURPOSE OF CHAPTER
While price is important, it is not a wise strategy to sell on price as a continuing policy. A product’s price
must reflect its proper value in the eyes of the consumer. To demonstrate the complexity of pricing deci-
sions, in the case of Japanese firms, the need to adjust their prices is derived from an attempt to neutral-
ize any threat from newcomers. For the Korean manufacturers, the strategy of offering lower prices is to
penetrate the advanced economies and to compensate for the unknown quality of their goods.The low prices,
however, still allow the Korean manufacturers to make sufficient profit margins due to their lower labor
costs. In both cases, the pricing strategies are somewhat constrained by host-country regulations, such as
the antidumping laws.
This chapter examines pricing decision in an international context. The chapter begins with a discussion
of the role of price in general. It proceeds to cover the various factors that can affect price, with special
attention given to certain variables that are unique to the international market (e.g., foreign exchange rate,
dumping, price control). Methods for dealing with a foreign country’s hyperinflation and transfer prices will
also receive some attention.
Coca-Cola, with a market share of 16.5 percent, is the
No. 3 Cola brand in India. It trails far behind Pepsi-
Cola, which commands 23.5 percent. To bring Coke
back to life, the operations chief persuaded the head-
quarters in Atlanta to revamp pricing and advertising.
In 2001, a new size (a 6.8-oz. bottle) was introduced
for 10 cents, targeting rural areas and lower income
urban markets. In 2003, the price of a 10.1-oz. bottle
was reduced from 24 cents to 17 cents. Both the little
bottle and price cuts were a big success. In addition, to
save 57 percent on import duties, Coca-Cola is now
using more local raw materials.
India is a paradox. On the one hand, with soft-drink
consumption of just seven 8-oz. servings per capita
annually, the market is small. On the other hand,
because of that per capita consumption, India has
the world’s greatest growth potential. After all, in
comparison, neighboring Pakistan claims an average
of fourteen servings. Mexico, at present, is the
world’s hottest soda market, accounting for 1500
servings.
Source:
“Finally, Coke Gets It Right,”
Business Week
,
February 10, 2003, 47.
MARKETING ILLUSTRATION THE PRICE IS RIGHT
THE ROLE OF PRICE
Price is often misunderstood, especially by many
executives. Consumers do not object to price.What
they object to is the lack of a relationship between
the perceived value of the product and the price
being charged. They want a fair price, and a fair
price can be either high or low as long as it reflects
the perceived value of the product in question.Too
high a price causes consumers to resist making a
purchase because the value is not there.
Price can be absolutely high from a cost stand-
point yet relatively low from a demand standpoint,
in relation to its value and other features.Therefore,
price must be lower than the perceived value or
exactly reflect the perceived value. For example, a
markdown may be needed for damaged or obsolete
goods, but a “high” price may appear to be quite rea-
sonable when extra value is added to a product.
Consumers around the world do not mind a high
price if they indeed “get what they pay for.”
However, this is often not the case.
PRICE STANDARDIZATION
One area of pricing that has received some atten-
tion is the issue of pricing standardization. A study
of the marketing mix by large US-based industrial
firms in their Latin American businesses found that
the degree of standardization varied across individ-
ual elements, with branding and product being
least adapted. Perhaps because of government
regulations, price and advertising elements were
most adapted. In comparison with the same firms’
European and Latin American strategies, price was
similarly adapted in both regions.
2
According to one study, most American multi-
national firms standardize their prices in most world
markets because they are probably cost driven.
3
Due to market variations, one has to wonder why
these firms are inflexible and whether they have
been successful overseas. Perhaps these firms have
been able to be rigid due to the fact that they do not
rely on foreign sales very much and that they do
business primarily with industrialized countries. In
contrast, those companies that are more committed
to international business localize their prices and are
more successful overseas.
Whether price should be uniform worldwide is
a subject of much debate. One school of thought
holds that, from the management’s viewpoint, there
is no reason for an export price to differ from the
home price. In addition, economists believe that
arbitrage will eliminate any price differential
between markets.This is especially the case with the
European Union due to the free movement of
goods, the elimination of customs barriers, and the
harmonization of VAT rates. In addition, the free
movement of people will enable them to easily
observe prices of the same products in neighboring
countries. As a result, internationally recognized
consumer goods with wide European distribution
are likely to have a more uniform pricing system.
A multinational corporation needs to coordinate
prices across its multiple markets – without violat-
ing national laws. A study of South Korean,
Taiwanese, Hong Kong, and Singaporean firms
operating in Europe found that they had closer rela-
tionships with their parent firms and that they had
greater autonomy in strategy and pricing decisions.
4
In the case of Nintendo, it was fined $147 million
by the European Commission for price collusion
with seven European distributors. The company
organized a cartel that operated from 1991 to 1998,
and it allowed companies to keep prices for its
games and game consoles artificially high in certain
countries.These distributors agreed to refuse to sell
to buyers from the other European countries,
resulting in extraordinarily wide differences in
prices among countries.
5
PRICING DECISIONS
Pricing is one area of marketing that has been largely
overlooked. Of the four Ps of marketing, pricing is
probably the one that receives the least attention,
especially in an international context.
One problem with an investigation of pricing
decisions is that theories are few and vague. Most of
the theories that do exist reduce the large number
of pricing variables to a discussion of demand and
supply. Because the few theories are inadequate,
many pricing decisions are based on intuition, trial
474
PRICING STRATEGIES
and error, or routine procedures (e.g., cost-plus or
imitative pricing).
When pricing a product, a company must con-
sider a number of factors. The factors of cost and
supply are always relevant – domestically and inter-
nationally. Other factors such as exchange rate,
tariffs, and culture are more applicable in the case
of international marketing.
Supply and demand
The law of supply and demand is a sound starting
point in explaining companies’ price behavior. A
common practice is to reduce the large number of
pricing factors to two basic variables: demand and
supply. In an efficient, market-oriented economy,
demand is affected by competitive activity, and con-
sumers are able to make informed decisions. Price,
as a measure of product benefit, acts as the equili-
brator of supply and demand. On the supply side,
suppliers compete for consumers’ limited funds
by constantly cutting costs and enhancing product
value. On the demand side, any increase in demand
is followed by a higher price, and the higher price
should in turn moderate demand. The higher
price, however, usually induces manufacturers to
increase the supply, and more supply should lead
to a reduction in price which will then stimulate
demand once again.
The demand–supply model of pricing seems to
work best with commodities under a monopoly sit-
uation. OPEC, an oil cartel, once controlled the
supply of oil so tightly that the cartel was able to
push oil prices up sharply. The demand remained
high for a period of time because consumers were
unable to adjust their driving habits immediately. In
the long run, however, high prices curbed excessive
demand, and oil prices tumbled during the mid-
1980s. The law of supply and demand, in this cir-
cumstance, operated in the predicted manner. The
moral could be that even a monopolist cannot keep
on increasing prices without eventually reducing
demand. Unfortunately, consumers have also
adjusted their behavior when prices improve by
embracing SUVs and fuel-inefficient vehicles, thus
allowing OPEC’s control on supply to boost price
in the early part of the twenty-first century.
However, this pricing model based strictly on
demand and supply is oversimplified. The straight-
forward relationship between supply and price can
be affected by several factors. Numerous products
have been so differentiated that supply alone as a
factor is essentially irrelevant. If a product has a dis-
tinct, prestigious image, price may become sec-
ondary in importance to image. For such a product,
supply can be reduced and price increased without
curtailing demand. Waterford Glass became the
bestselling fine crystal in the USA by carefully nur-
turing its “posh image” as well as by controlling the
supply. Waterford held down volume while main-
taining premium prices.According to the company,
there is no advantage in owning a product that
anyone can buy.
Because demand-and-supply analysis can only
broadly explain companies’ price behavior, it is nec-
essary to consider other relevant factors that affect
demand or supply or both, and that ultimately influ-
ence pricing decisions.
Cost
In pricing a product, it is inevitable that cost must
be taken into account. British Airways at one time
blindly matched the competition’s prices without
carefully considering its cost structure. By institut-
ing carefully considered restrictions on discount
seats, the company was able to increase its yield
significantly.
The essential question is not whether cost is
considered but rather what kind of cost is consid-
ered and to what extent.The typical costs associated
with international marketing include: market
research; credit checks; business travel; inter-
national postage, cable, and telephone rates; transla-
tion costs; commissions, training charges, and other
costs involving foreign representatives; consultants
and freight forwarders; product modification; and
special packaging.
For one school of thought, the thinking is that
export price should be lower than home price
because the home market actually gains in its
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8
9
30
1
2
3
4
5
6
7
8
9
40
41
42
43
44
45111
475
PRICING STRATEGIES