viernes, 17 de julio de 2009

WELCOME MESSAGE


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It is for me a pleasure to give you the welcome to this Blog which has the intention to complement the subjects and topics developed during the next semester. This Blogs is intended to function as way for communication between you and me.

In this Blog you will be able to gradually have access to the topics and content of the course, tasks and projects that are developed during the semester. I hope this Blog becomes a source of pure expression and knowledge.!!!

Once again Welcome ! feel free to make any comment or suggestions to the information on this blog..

Sincerenly,

Leonel Gonzalez

Professor

UVM Aguascalientes









Grupos de Google
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Correo electrónico:
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If you are already subscribed to Price Strategies Group please click here

INTRODUCTION OF THE COURSE

Dear Students welcome back !!!!

Just a note to remember that in today’s world we all are connected through different people doing different things in a different manner but all with just one purpose: To make life simpler on global community, like this guy who dance across several locations around the world with one common message: We are all the same!!!

Where is Matt?





Some students from the Last semester

1.0 GLOBAL ECONOMIC AND PRICE FIXATION


Objetive of this unit:

Students will analyze the Global situation for the prices fixation in International Commerce with the purpose of an evaluation.


CONTENT

A fews things you probably need to know about globalisation:

The term:

Globalization or (globalisation) is the process by which the people of the world are unified into a single society and function together. Globalization is often used to refer to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. This process is usually recognized as being driven by a combination of economic, technological, sociocultural, political and biological factors. The term can also refer to the transnational dissemination of ideas, languages, or popular culture.

Globalization, since World War II, is largely the result of planning by politicians to break down borders hampering trade to increase prosperity and interdependence thereby decreasing the chance of future war. Their work led to the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the processes of globalization.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.

Since World War II, barriers to international trade have been considerably lowered through international agreements - GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included:

  • Promotion of free trade:
    • elimination of tariffs; creation of free trade zones with small or no tariffs
    • Reduced transportation costs, especially resulting from development of containerization for ocean shipping.
    • Reduction or elimination of capital controls
    • Reduction, elimination, or harmonization of subsidies for local businesses
    • Creation of subsidies for global corporations
    • Harmonization of intellectual property laws across the majority of states, with more restrictions
    • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity, but largely without success.

The Uruguay Round (1986 to 1994) led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

To know more about this topic:

Source: Wikipedia

DID YOU KNOW? ACTIVITY

Instructions:

Watch the following video and then reflect about today's situation for your daily life. Discuss with your group and make a final statement.













READ ACTIVITY

Instructions:

Read the following link at Wikipedia and then discuss with a group of four the following topics as follows:

  1. What is globalisation and when did it started?
  2. Who are the players?
  3. Why is there global inequality, and is is getting worse?
  4. What is the role of the Internet and communications technology in globalisation?
  5. Is globalisation shifting power from nations states to undemocratic organisations?
  6. How does globalisation affect culture? Is it “Americanisation”?
  7. What are the environmental impacts of globalisation?
  8. Is globalisation resulting in industries in developed countries being undermined by industries in developing countries with inferior labour standards?
  9. Is ther any alternative to globalisation?
  10. What does globalisation mean to a country like Mexico?

Submit your answers to this Blog as a comments




PREPARE FOR YOUR FUTURE NOW!!!!


Watch the following video and discuss with your classmates about the challenges in today's world when is all about getting a job abroad:



Question







PRICE FIXATION

The need to adapt to costumer requirements simultaneous to the financial drive to lower costs through standardization was nowhere more evident than in relation to the globalization program many consumer –marketing firms started self – consciously to undertake during this time. “Going Global” meant encountering a greater maximum of variation in consumer preferences, since cultural and other “environmental” diversities grow in proportion with the enlargament of the marketing catchment area.

Adaptation and sndardization made inevitable that costing and products pricing were affected in order to meet consumer expectations and at the same time could be adapted to international market circumstances and global competitiveness.

1.1 Economic Factors

Watch this Advertising and reflect aboout how economic growth is shaping today’s world face of campitalism and how trading contribute to this factors:

Pending

List of Determining Economic Factors


Pending


Message to the Nation referrring to Economic Issues from the President of Mexico, Mr. Felipe Calderón Hinojosa





ACTIVIDAD

Accesa al Grupo de Google y revisa la lectura: "Conversaciones con Felipe Calderón" y contesta la preguntas según se te pide, en apartado de comentarios de Casos y Lecturas.

1.2 Political Factors

Business


Pending


MOST IMPORTANT MARKETING TERMS

If you want to know more about the most important terms of Marketing, you should click on The Marketing Association of Australia and New Zeland website.


APARTADO DE CAPACITACIÓN PROFESIONAL

Limpia tu imagen virtual y obtén empleo


1.3 Social Factors

 

Pending

TEMA: CAPACITACIÓN PARA MARKETING PERSONAL

Accede a la siguientes ligas y crea una cuenta propia con la finalidad de que puedas subir tu curriculum personal y te sirva como plataforma para promoverte dentro del mercado laboral actual y futuro.

Hoy en día tener un identidad laboral en Internet alejado de la forma tradicional de encontrar trabajo ha tomado relevancia a medida que los buscadores de talentos o Head hunters recurre al Internet como medio para buscar a posibles candidatos a un puesto de trabajo.

PARA BUSCAR TRABAJO…

La primer fuente de información que te puede sugerir es OCC, es la base mas completa en línea para trabajos y continuamente las bolsas de trabajo suben sus solicitudes además de que grandes corporativos ven en este sitio una forma idónea de captar talentos.

La segunda opción es el nuevo portal templeo es cual es una buena opción en cuanto este se presenta como una nueva opción para postularte para un puesto en una compañía, tiene la ventaja de que si cuentas con una cuenta de Twitter podrás seguir las ofertas de trabajo mas interesantes que ellos publiquen en su sitio.

La tercera opción es Career Builder una opción interesante para encontrar trabajo a nivel internacional en un sitio en donde con su motor de búsqueda inteligente permite encontrar posible trabajos a partir de la información que vacías en tu curriculum que pones en línea.

SI LO QUE BUSCAS ES CONTACTOS CLAVES….

Probablemente debas considerar el uso de la redes sociales como Facebook o redes de negocios como Xing o Linkedin, los cuáles te permiten hacer contacto con gente clave en algunos sectores o empresas en donde tu quisieras trabajar.

 

IMPORTANT:

The following article is in Spanish it will be translated in English soon!!!

LECTURA: HABILIDADES DE IDIOMAS EXTRANJEROS

Las opiniones sobre la importancia de un segundo idioma para una carrera de Mercadotecnia o Negocios Internacionales difieren. Existen personas cuya actitud acerca de otro idioma se apega a la afirmación de que “el idioma de los negocios internacionales es el Inglés”. Otras consideran que sin importar cuáles sean sus conocimientos en uno o dos idiomas, es posible que no los necesiten en el país que se hablan esos idiomas. Entonces ¿Los idiomas son importantes o no?

Los que defienden los conocimientos en otro idioma argumentan que aprenderlo mejora su entendimiento cultural y las relaciones de negocios. Otros señalan que para ser tomados en serio por la comunidad empresarial, el expatriado debe ser capaz de, por lo menos, conversar en el idioma de ese país. Los idiomas son muy importantes, en especial cuando se intenta vender en otro país. Un experto holandés en capacitación de ventas afirma: “las personas esperan comprar a representantes con los que se puedan relacionar y quienes entienden su idioma y cultura. Generalmente, son frías con los estadounidenses que intentan venderles productos”.

Algunos reclutadores buscan candidatos que por lo menos hablen otro idioma, aun cuando no requieran de ese idioma para un trabajo específico. Para el reclutador, el conocimiento de otro idioma es una señal de que el candidato está dispuesto a involucrarse con otra cultura.

A pesar de que la mayor parte de las compañías ofrece cursos intensivos y cortos de idiomas a los administradores que envían al exterior, muchas están realizando esfuerzos más grandes para reclutar personas bilingües o multilingües. De acuerdo con el director de personal de Coca – Cola, cuando su departamento busca personas que cubran sus puestos en el exterior en su base de datos, a menudo, la primera opción es alguien que habla más de un idioma.

UNA MIRADA HACÍA EL FUTURO: ¿LÍDERES INTERNACIONALES DEL MAÑANA? UNA EDUCACIÓN PARA EL SIGLO XXI

Una escuela sostenida por la Comunidad Europea instruye británicos, franceses, alemanes, holandeses y otros que sean los europeos del futuro. La Escuela Europea se encuentra en un suburbio de Bruselas, tiene estudiantes de 12 países que van a obtener una educación para la vida y el trabajo, no como productos de la tierra madre o patria sino como europeos. La UE opera nueve escuelas europeas en Europa Occidental las cuales tienen 17,000 estudiantes que acuden desde el jardín de niños hasta la preparatoria. Los graduados salen con una educación extraordinaria, por lo general son trilingües, y muy, pero muy europeos.

Las escuelas representan una combinación de idiomas y culturas. Hay alumnos nativos de 36 idiomas diferentes en una sola escuela. Cada año, los estudiantes toman cada vez menos clases en su idioma original. Al principio, generalmente en el primer año, comienzan con un segundo idioma, al que se le conoce como el “idioma de trabajo”, el cual debe ser Inglés, Francés o Alemán. Se les introduce un tercer idioma en el primer año de secundaria y pueden comenzar con el cuarto en el primero de preparatoria.

Cuando los estudiantes llegan a su segundo año de preparatoria, toman historia, geografía, economía, matemáticas avanzadas, música, arte y gimnasia, en el idioma de trabajo. Cuando hablan en grupo cambian constantemente de idioma a “el que se adapte mejor”.

Además de idiomas, los estudiantes aprenden historia, política, literatura y música desde la perspectiva de todos los países europeos (en pocas palabras, culturas europeas). El plan de estudios está diseñado para enseñar a los franceses, alemanes, ingleses y estudiantes de otras nacionalidades, a ser los europeos del futuro.

Este mismo enfoque también se utiliza en el nivel de maestría. La respetada Escuela de Administración tiene instalaciones en muchas ciudades diferentes (Berlín, París, Oxford y Madrid). Los estudiantes pasan parte de su tiempo en cada uno de los campus.

Los programas de maestrías en Estados Unidos están comenzando a imitar a este tipo de programas. La Escuela de Negocios de la Universidad de Chicago actualmente tiene instalaciones en Barcelona, España y Singapur. La Escuela Fuqua de Duke ofrece un programa de maestría ejecutiva único que incluye viajes a distintos países extranjeros y un porcentaje importante de la enseñanza se ofrece interactivamente a través del Internet. Este programa ha atraído a estudiantes de todo el mundo quienes están dispuestos a pagar colegiaturas de centenas de miles de dólares.

Fuente:

Tit: Marketing Internacional Aut. Phillip Cateora Duodécima Edición p.p. 525 Ed. 2009.

1.4 Cultural Factors

Pendings


Valores Siglo Xxi (Quino)



VIDEO ACTIVITY:

Watch de following the video with Patrick Dixon regarding how Social Networks on Internet can affect relationships

1.5 Competitiveness Factors

Pending


START UP FOR NEW COMPANIES IN MEXICO WEBSITE

Want to start your own company ?, check the new website from the Government of Mexico

click here.

Description

Es un portal creado por el Gobierno Federal para facilitar la constitución y puesta en operación de empresas en México, a través del uso de medios electrónicos y la simplificación de trámites federales.



TECNOLOGIA

2.0 FREE TRADE AGREEMENTS

 

Students  will analyze the advantages and disadvantages of the Free Trade Agreements and their use for the benefit of the fixation of prices.

2.1 North America Free Trade Agreement (NAFTA)


El Tratado de Libre Comercio de América del Norte TLCAN conocido también por TLC o NAFTA (por sus siglas en inglés North American Free Trade Agreement o ALÉNA, del francés: "Accord de libre-échange nord-américain" ), es un bloque comercial entre Canadá, Estados Unidos y México que establece una zona delibre comercio. Entró en vigor el 1 de enero de 1994. A diferencia de tratados o convenios similares (como el de la Unión Europea) no establece organismos centrales de coordinación política o social. Existe sólo una secretaría para administrar y ejecutar las resoluciones y mandatos que se derivan del tratado mismo. Tiene tres secciones. La Sección Canadiense, ubicada en Ottawa, la Sección Mexicana, en México, D.F.; y la Sección Estadounidense, en Washington, D.C..

Objetivos


  • Eliminar fronteras para comercializar, y facilitar el cruce por las fronteras del movimiento de servicios entre los territorios de los países miembros.
  • Promover condiciones de competencia en el área del libre comercio.
  • Proporcionar protección y aplicación de derechos intelectuales en cada país.
  • Crear procedimientos de la implementación y aplicación de este acuerdo, para su administración conjunta, así como la resolución de problemas.
  • Establecer una estructura más trilateral, regional, y multilateral de cooperación para extender y aumentar los alcances de este acuerdo.
  • Eliminar barreras al comercio entre Canadá, México y Estados Unidos, estimulando el desarrollo económico y dando a cada país signatario acceso a sus respectivos mercados.
  • Eliminar obstáculos al comercio y facilitar la circulación fronteriza de bienes y servicios con la excepción de personas entre territorios de las partes firmantes (países involucrados).
  • Aumentar sustancialmente las oportunidades de inversión en los territorios de las partes.

Barreras arancelarias y no arancelarias

Una de las partes centrales de este marco regulador del comercio de bienes es el programa de desgravación arancelaria, mediante el cual se plantea la eliminación progresiva de los aranceles sobre bienes originarios, de acuerdo con unas listas de desgravación.


  • La categoría A corresponde a la entrada libre de derechos cuando entra en vigor el Tratado.
  • La categoría B mediante la cual se prevea la eliminación del arancel en 5 etapas anuales, es decir que la eliminación del arancel en un período de 5 años.
  • La categoría C prevé que linealmente el arancel va a llegar a cero en un período de 10 años.
  • La categoría D que incorpora todos aquellos bienes que estaban exentos del pago de aranceles y que van a continuar así, por ejemplo todos aquellos productos mexicanos que se benefician de SGP (Sistema Generalizado de Preferencias Arancelarias) en los Estados Unidos o de un sistema preferencial en Canadá.
  • La categoría E que tiene una desgravación en 15 años para productos especiales, por ejemplo el jugo de naranja en Estados Unidos, el maíz y frijol en México.

Antecedentes

Ante este acuerdo, el gobierno mexicano comenzó el planeamiento de un programa propio que más tarde introduciría las industrias maquiladoras en el norte de México. Las maquiladoras son básicamente fabricas de capital extranjero (principalmente estadounidense) ubicadas casi en su totalidad a lo largo de la frontera mexicana y se caracterizan por la diversidad de su producción, abarcando desde la industria textil hasta la química, pasando por componentes electrónicos, maquinarias y repuestos para automotores. (Véase Maquiladora). El "programa de maquiladoras", fue impulsado por el gobierno mexicano como respuesta al cierre del programa de Braceros, por el cual se autorizaba a trabajadores agrarios mexicanos a realizar trabajos temporales legalmente en territorio estadounidense. El cierre del programa de Braceros acarreó una fuerte crecida de la desocupación en la zona fronteriza de México razón por la cual antes de culminar el año 1995, se puso en marcha el nuevo programa.

Contenido

Consta de un preámbulo y 22 capítulos agrupados en 8 secciones, su finalidad es aumentar la competitividad entre las empresas mexicanas, canadienses y estadounidenses.


  • Primera parte. Objetivos y Aspectos Generales.
  • Definiciones Generales.
  • Segunda Parte. Comercio de Bienes.


Trato Nacional y acceso de bienes al mercado, comercio e inversion en el sector automotriz, sector textil y el vestido, reglas de origen, procedimientos aduaneros, Energía y petroquimica básica, Sector agricola y disposiciones zoosanitarias y fitosanitarias, salvaguardas.


  • Tercera Parte. Barreras Técnicas al Comercio.
  • Cuarta Parte. Compras al sector Publico.
  • Quinta Parte. Inversión y Comercio de Servicios.
  • Sexta Parte. Propiedad Intelectual.
  • Séptima Parte. Solución de Controversias.

Críticas

Las organizaciones campesinas y obreras mexicanas organizaron para el primero de febrero de 2008 marchas contra el tratado y en concreto para renegociar con el gobierno el capítulo agropecuario en defensa de la soberanía alimentaria y en contra de la reforma energética, protestas encabezadas por la CNC CCCCNTE, el SME y el EZLN (Ejército Zapatista de Liberación Nacional) en el año nuevo de 1994, donde los manifestantes, en su mayoría indígenas, se tomaron varias sedes municipales del gobierno.1 Las manifestaciones marcharon en muchos estados aunque la mayor fue la de la capital DF, donde 200 mil, según los organizadores, fueron los que marcharon hasta el Zócalo en protesta. Las manifestaciones concluyeron de forma pacífica sin lograr una respuesta favorable por parte del gobierno para renegociar el TLC.

Fuente: Wikipedia


INTERESTING READING:

Something you should not about the most powerfull woman in business in Mexico:

María Asunción Aramburuzabala



2.2 Latin American Integration Association (ALADI)

 

Pending

2.3 Southamerican Common Market (Mercosur)

 

Pending

2.4 European Union – Mexico Free Trade Agreement

 

Pending

3.0 EXPORT AND IMPORT CONSIDERATIONS TO SET AN INTERNATIONAL PRICE FOR GOODS.

Pending


VIDEO ACTIVITY

Watch the following video in which is shown the Panama Canal and how it is works.




3.1 Pricing Definition

PRESENTACIÓN PARA ESTUDIANTES DE LICENCIATURA EJECUTIVA EN VENTAS DE LA UNIVERSIDAD DEL VALLE DE MÉXICO CAMPUS AGUASCALIENTES

Aquí podrán visualizar el contenido de la primera presentación sobre Fijación de Precios desarrollada durante las últimas sesiones para su posterior análisis y estudio.

POWER POINT SLIDES PRESENTATION FOR STUDENTS OF BACHELOR IN SALES FROM THE UNIVERSTIY OF THE MEXICO VALLEY IN THE CITY OF AGUASCALIENTES.

This is the first power point file shown during our sessions regading price fixation for further analysis and discussion.


Fijación del Precio




The price is the amount of money a consumer is willing to pay for an item or a service, which is usually based on several aspect such as cost of manufacturing, taxes, profits and a margin to settle a final price.


Types of Pricing

  • Cost plus a percentage of the cost. (usually service oriented)
  • Breakeven, that is, whatever it costs to produce the product or provide the service. (usually non-profit organizations, but not necessarily)
  • Target profit (eg: make a 20% profit before tax. This implies that you understand all of your operating costs very well.)
  • Perceived value (price to the consumer's expectation)
  • Competitive related (price using competitive price as a base)
  • Sealed bid (usually construction projects)
  • Two part pricing (fixed fee plus variable usage rate eg: telephone service)
  • Bundled pricing that combines multiple products and/or services under one price.
  • Discounts for cash payment (when cash flow is important)
  • Quantity discounts (when volume is important)
  • Trade-in price (when there is some residual value for a trade-in item)
  • Update price for an improvement to an existing product (this allows you to benefit from current customer base)
  • Discounted price to a reseller (to expand volume through channels of distribution)
  • Seasonal discount (to even out volume which allows a consistent production process)
  • Sales price(to promote demand, with volume hopefully offsetting reduced price)
  • Psychological pricing (eg: to create an impression of a lower price, $199.95 vs $200)
  • Geographical/sales site location (eg: varying prices for fuel in different geographical locations)
  • Price plus shipping (catalog/mail order type of sales)

Your Objectives

The objectives that you have set for your enterprise and/or a particular product or service will have a significant impact on your decisions related to the prices you set. Some examples of objectives and their influence on pricing decisions are:

  • Does this offering require a short term or a long term commitment? IE: Is it a "pet rock" sort of offering or is it something you can build a business around?
  • Do you need to maximize cash flow? If so, are you willing to set your price high to get the greatest return from each sale at the cost of limiting market share? If not, are you willing to significantly under-price the competition to sell in volume, generating some cash but destroying future market potential by lowering price expectations?
  • Is it your intent to capture maximum market share or attract customers for sale of other offerings? if so, are you prepared to take a loss on the sales of your current offering to build a customer base that will purchase a follow on (potentially much more lucrative) offering in the future?
  • Do you want to price at some point relative to competition (higher, lower or equal) with an intent of creating a image relative to (different than) the competition?
  • Do you have excess inventory? If so, is break even or even a loss on each sale of an offering more cost effective than having the offering sitting in inventory due to interest payments, storage costs or time sensitive materials?
  • Is it important to attract attention to the product/service? Will volume sales establish a brand recognition and if so is this more important in the short term than concern for whether any profit is realized?
  • Do you want to price to attract distributors? If so, are you willing to accept significantly lower profit margins to establish relationships with one or more distributors who will likely carry future offerings once a relationship has been established?
  • Do you want to price to set entry barriers? If so, you must decide whether a low price (that still makes you some profit) will discourage the entry of new competitors.
  • Do you want to price to hurt competition? If so, are you willing (or able) to lower prices enough to insure that you will increase your market share?
  • Are certain price levels necessary to retain customer base, channels of distribution? This may be a factor if it is your intent to remain in the market over a long period of time with numerous offerings. In this case, it may be prudent to maintain low prices which will encourage relationships with distributors and repeat purchases from your customer base.
  • Do you want to establish an image of high value, thus high price? If so, do you have the resources to have your offering considered the "top of the line" in quality, reliability and durability and thus a justifiably high price?
  • Do you want to establish an image of high value but a low price? If so, do you have the resources to have your offering considered the "top of the line" in quality, reliability and durability and still price it at a comparable or lower price than the competition?
  • Do you want to maximize profit? Are immediate profit margins more important to you than building a customer base and creating an image (enterprise, product or service) that will sustain you in the long run?

Competition


If you are not the market leader in your industry, competitive prices will influence the pricing of your product or service. Market leaders have often created a "pricing standard" against which other product/service prices are compared. So if your product or service is reasonably competitive with the market leader's offering you can set a price that is near the "standard". If you have the ability to price lower than the competition and still be profitable, you may be able to capture a greater market share which can benefit you over time as you offer new or complementary products or services to your customer base.

Your decision to compete with a lower price should not be made lightly. If the competitor perceives that your low pricing has the potential of reducing their market share or impacting their influence in the industry, they may respond with an even lower price. Then, instead of increasing your market share, you could be faced with no opportunity to profitably penetrate the market at all. It is always of value to know the capabilities and tendencies of your competitors.
A different form of competition is the 'alternative solution'. The prospect's first alternative is always, if the price is too high, a decision that they really don't need your offering or any of your direct competitor's offerings. There may also be a variety of ways for the prospect to solve their problem. For example, if you offer an airline service, you are really in the business of transportation. So your prospect has the option of your service versus trains, busses, rental vehicles, personal vehicles, hitchhiking, bicycles, walking or (back to the first alternative) staying at home. The availability of numerous alternative solutions will usually limit your pricing flexibility.

The Market/Prospect

Understanding the characteristics of the marketplace is an essential factor in establishing a price for your offering. You should first try to identify the general type of market you will be selling to.

Type of market

  • commodity (many buyers/competitors, non-unique products) - minimal pricing flexibility
  • uncontrolled (many buyers/competitors, unique products) - maximum pricing flexibility
  • controlled (many buyers, few competitors, unique products) - some pricing flexibility
  • vertical-low (limited # of buyers, many competitors)
  • vertical-high (limited # of buyers, few competitors)

Prospect Characteristics

Then you should learn as many details as possible about the 'typical' prospect in the market you have targeted. Examples of the kind of detail you should look for are:

  • Prospect's perception of your product (positive perception = higher price)
  • Prospect's awareness of your product (lack of awareness raises promotion costs)
  • Whether product is for a captive audience (eg: razor blades, minimizes marketing costs)
  • The criticality of the offering to the consumer (more critical = higher price)
  • The ability of the consumer to pay (greater ability = higher price)
  • Demand due to seasonal considerations (snow shovels priced lower in the summer)
  • Demand due to geographic considerations (snow shovels in Tahiti are unlikely to sell no matter how low the price)
  • Market trends, fads or changing consumer interests

The Product or Service

There are, of course, many characteristics of your product or service that will influence the price.

  • Does your offering provide tangible versus intangible benefits/differences? Offerings with immediate and tangible benefits will usually support higher prices.
  • The uniqueness of your offering versus the competition. Uniqueness usually supports a higher price if the offering has credibility.
  • Whether your offering is one of several in a product/service line. Pricing must be consistent with the rest of the line.
  • Whether your offering is a complement to another product/service. Sales to existing customers usually reduces marketing costs thus giving greater pricing flexibility.

Your Enterprise

A variety of factors within your enterprise will influence the pricing decision. Some examples are:

  • Your cost to produce the offering is clearly the first factor in setting the price.
  • The potential for learning curve benefits. That is, will sales volume and time result in lower production costs thus creating the potential for lower prices?
  • Your ability to meet demand. If you have a limited production capacity, you should price high enough to insure that you don't create more demand than you can satisfy.
  • Your cost to deliver, including shipping, warehousing and installing.
  • Your cost to promote, including press releases, press tours, ads, literature, demos, etc.
  • Your financial resources, giving you the ability to sustain a start-up period of losses.
  • The quality and speed of your product/service delivery. If you can deliver quickly and "how quick can I get it?" is the most critical factor to the prospect then high pricing is likely.

The Environment

In addition to characteristics of your competitors, your prospects and your enterprise there are more general, environmental factors that can influence your pricing.

  • At what point in market life cycle of your offering are you selling? If it is early in the life cycle you can usually charge a higher price.
  • What is the availability, quality and cost of channels of distribution?
  • What is the status of the economy (inflation, deflation, varying interest rates)?
  • What is the potential for government intervention? Is your enterprise verging on a monopoly? is your offering important to national stability?
  • Are market characteristics such that a lower price will generate a higher demand? (Elasticity of demand)

Other

There are many other factors that can influence pricing that are difficult to place in any of the above categories. Some of these are:

  • The method of payment you want to extend to the customer. (cash, invoice for 30 day payment, time payments, no payments until ...)
  • The cost for the prospect to switch to your offering from their current solution. Does a high switching cost imply that you need to price low to offset the switching costs or should you price high because the prospect has already committed to a high dollar solution?
  • What image is most appropriate for your offering to achieve maximum market penetration? (often higher prices imply higher quality and vice versa)
  • Are you able to define price thresholds, upper & lower, where the prospect will consider the price unreasonable?
  • Is it reasonable to segment the market for different prices? eg: first class vs tourist air fares, branded vs unbranded offerings, first time buyer vs existing customer.
  • Are there special conditions (atmosphere/ambiance) at the time of purchase? For example, the price for a cup of coffee in a deli is likely to be much lower than for a similar cup in a Hilton hotel.
  • How reliably can you project sales volumes? Reliable volume forecasts typically allows for better pricing determination.

Article extracted from: Source: Business Plans


Free Tactics to use Twitter as Promotion Tool

Watch the following video and discuss with your teacher and classmates




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3.2 Costing Definition

 

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3.3 Fixed Cost

 

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3.4 Variable Costs

 

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3.5 Profits Definition

 

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3.6 Demand Price Elasticity

 

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3.7 Crossed Price Demand Elasticity

 

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3.8 Elasticity of Demand

 

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3.9 Breakeven Point

 

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3.10 Complementary Products

 

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3.11 Substitutes Products

 

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4.0 PRINCING AND COSTING

 

Students will analyze the methods of Pricing and Costing with the purpose of choose under a previous evaluation the right price for goods in the international markets.

4.1 Pricing

 

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4.2 Costing

 

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5. INCOTERMS

 

Students will analyze the internal and external conclusions of a business in order to choose the correct Incoterms for every case.

5.1 INCOTERMS Concept

 

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5.2 International Commerce Terms (Incoterms)

 

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Library Reference

BÁSICA:

  1. CZINKOTA, Michael R., Ilkka A. Ronkainen. Marketing internacional. Prentice Hall. 6ª edición. México. 2002.
  2. PFEFFER, Jeffrey. Ventaja competitiva a través de la gente. CECSA. México. 1997.
  3. PORTER, Michael E. Ventaja competitiva. Patria. México. 2ª edición. 2004.