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Definition
| pricing based on adding international costs and a markup to the domestic manufacturing cost |
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| Dynamic incremental pricing |
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| pricing that is based on the international costs that ignores domestic fixed costs on the premise that they have to be borne regardless of whether the goods are exported |
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| the process of covering incremental costs (e.g. shipping insurance, tariffs, margins of various intermediaries) that make the final foreign retail price higher than the domestic retail price |
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| how much currency movements are reflected in changes to the price customers pay |
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| destination-specific adjustments of markups in response to exchange rate movements |
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Term
| Local-currency price stability |
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Definition
| ): a special form of prcing-to0market in which markups are adjusted to stabilize prices in the buyer’s currency (adjust markups in such a way that local currency prices remain fairly stable) |
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| prices charged for sales transactions (involving trade of raw materials, components, finished goods, or services) among related entities of the same organization in different countries |
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| uses market mechanism as a cue for setting transfer prices |
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| a transfer price set by charging the price that any buyer would pay, as though the transaction occurred between 2 unrelated organizations |
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Definition
| covers various prolicies that deviate from market-based pricing, the most prominent ones being cost-based pricing and negotiated pricing |
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| transfer pricing that simply adds a markup to the cost of the goods |
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Definition
| transfer pricing in which the pricing is negotiated between country affiliates |
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| the introduction of a product to the market of another country at less than the product’s normal value (meaning the domestic price) in the home market; it is a form of price differentiation between markets |
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Definition
| the price range in markets across a region, ideally set to balance profits and minimize parallel importing (parallel imports arise when unauthorized distributors purchase the product in low-price markets and then ship it to high-price markets) |
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Term
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Definition
| the organization’s headquarters are able to influence pricing decisions at the local level by way of the transfer prices that are set for the goods that are sold to or purchased from the local affiliates. Or rationing which is when headquarters sets upper limits on the number of units that can be shipped to each country |
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Definition
| pricing decisions made at central or regional headquarters level; uncommon; sacrifices flexibility needed to respond rapidly to local competitive conditions |
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Definition
| headquarters spells out a set of pricing rules that the country managers should comply with; they have flexibility to in determining their ultimate prices |
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| emphasis on informing and persuading rather than prescribing and dictating (example: discussion groups and ‘best practice’ gatherings) |
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Definition
| the trading of products without direct monetary payments |
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| swap of one product for another |
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Definition
| 2 governments agree to import a set specified value of goods from one another over a given period |
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Term
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Definition
variant of clearing arrangements in which a third party is involved
(money involved) |
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Term
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Definition
| typically with sale of technology, turnkey plants or machinery equipment; the seller provides the equipment and agrees to be paid by the products resulting from using the equipment |
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Term
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Definition
| most popular; 2 parallel contracts are set up; each party agrees to buy a specific amount of goods from the other for hard currency over a set period; the products are unrelated |
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Term
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Definition
| the seller agrees to offset the purchase price by sourcing from the importer’s country or transferring technology to the other party’s country. |
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