When trying to set prices for different products in an international environment, it can be very hard to know what to do in each different country as different components apply to different countries and products. A company should look at how much does the product cost to make and ship first. After that they should see the value that the product has in the respective country. Then they should look at the different markets they are going into and see how much the closest products to theirs are going for. Managers must then decide whether the quality of the product is enough to stay above the competition's pricing or to be competitive and set a lower price than them. If the product is of higher quality, the company must ask itself if the customer …show more content…
If a person makes less money per day than in the US, the product cannot be more expensive. In Mexico a $7 combo from Burger King cost around $4. If they did not lower the price down, they would have not been able to compete. While it is still more expensive than other burger places, they at least have a chance to lure potential customers to buy their products. Also a company must consider variable-cost pricing, as it may vary between country to country. A shortage of cows might lead to increase pricing and a recession might lead to lower pricing. All those components are important to look at if you are going in with an existent product that is just slightly different. If a company creates a product first, then they can use a price skimming policy to try to maximise profits. While some companies require it to cover the cost of invention and patenting, I believe it is a good approach. Apple did it when they first develop the iPhone and it worked out for them. If they had put the phone out for $200 dollars like the rest of the competition, they might have lost profits that could have enable them to be what they are