Pricing Decisions on a Global Scene

Pricing Decisions on a Global Scene

Pricing Decisions on the Global Scene

Abstract

The five forces of influencing competition are threats of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute and rivalry among existing competitors. If the company can manage to survive the entry stage, it must then deal with suppliers and buyers. Threats from substitute are always in the sellers thoughts, especially if the product can be easily duplicated. Brand equity refers to the value of company and brand names and it offers customers some awareness, perceived quality, and brand loyalty. Once the brand is established, it is easier to launch if clients trust the original product and believe that the company offer quality products. Three alternatives to global pricing that a company has available to them would be extensions, adaptation and invention. It starts from complete price control to none at all. A perception that your companies’ price are free of favoritism or bias, equitable, impartial and consistent with rules, logic or ethics must be apparent in the market place. Marketers must reach out to economist and understand price elasticity of their product to better price the product. A wrong price can lead to revenue losses and market share deterioration.

Introduction

The five forces of influencing competition are threats of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute and rivalry among existing competitors (Porter, 1980). Newcomers to the market have plenty obstacles which would include obtaining capital for manufacturing and financing and overcoming entrenched companies that reached economies of scale and have a loyal customer base (Keegan, 1998). The company reputation can affect labor efficiency, productivity, and cost which will affect the company’s overall performance and that will be measured in five different ways, financial performance, quality and...