International Marketing Essay Example

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International Marketing

International pricing strategies

International marketers use price a versatile element in the marketing mix. There are various pricing strategies at disposal for international service and product marketers. These are; penetration pricing, price skimming, psychological pricing, and value pricing, product bundle pricing and promotional pricing strategies.

On penetration pricing, Hamel (2013) notes that the price of a product is set below the market price so as to gain market share. Telecommunications firms like Sky TV and France Telecom have been using penetration pricing to gain considerable international customer numbers. Such firms choose discounts and freebies to get people to sign up for their products and services. Price skimming is used by firms with substantive competitive advantage to charge higher service or product prices. Although it is not sustainable, higher prices attract competitors which lower the price in the medium term (Hair & Lukas, 2014). For example, Rolex digital watches use skimming strategy to but without innovation, other firms like Omax can snatch the advantage. Psychological pricing is used by marketers with intentions of responding to emotional rather than rational customers. Since international consumers use a decision approach, a movie such as ‘The Take’ may be going at $12.99 at Netflix. This shows that customers may go for the product is still in the $12 range though it is $0.01 to $13. Product bundle pricing is a combination of various prices into one package. Video games and Blu-Ray discs are sold as a bundle (Vasudeva, 2006). This helps to turnover faster the slow selling items or old stock among fast selling products.

Geographical pricing is based on variations of prices in different markets and locations around the globe. For example, where shipping costs affect TV and fridges made by Samsung or Ramtons, these firms have to face more tax laws and import policies of particular countries. In addition, United Arab Emirates increased taxation for cars in order to reduce CO emissions. However, this legislation affects the import prices of the cars by increasing their prices (Deresky, 2013). In Kenya, value added tax had been increased for petrol and inelastic goods like alcohol which increases the prices of these commodities. Value pricing is applied at the time of increase competition or recession. This applies to fast food items sold by multinational like McDonalds where the customer are made to value the meals so that they can content that the price they paid is commensurate to the value they are getting. On the other hand, promotional pricing is used to promote various products using discounts, money off vouchers and Buy-One-Get-One-Free (BOGOF). Although it is subject to controversy, promotional pricing is subjective as some countries have laws that dictate that original prices should run for sometime before being discounted (Vasudeva, 2006).

The pricing strategies used by international companies point to an objective desired from the action and whether it can apply to specific markets and consumers. This is because marketing firms focus on gaining higher product margins other elements in the marketing mix such as promotion, place and product should be considered before reducing the prices.


Deresky, H. (2013) International Management: Managing across borders and cultures: Text and Cases, Pearson Publication.

Hair, J.F. & Lukas, B. (2014) Marketing research. McGraw-Hill Education Australia.

Hamel, G. (2013) Different Types of Pricing Strategy. Business central.

Vasudeva, P.K. (2006) International Marketing. Excel Books India.