international pricing

International pricing is the control and strategy of international price-setting.

Bilateral trade agreements between countries are increasingly bringing an end to the era of closed markets. Globalization and increasing transparency in pricing therefore demands an active price management from internationally operating companies. Within the European Union, there are still substantial price differences for individual product categories such as cars, cigarettes or alcoholic beverages. This is often exploited by dealers or private customers, which can result in re-imports or grey market trading.

The concentration of sourcing activities on low-wage countries can further pose a massive profitability risk. Kodak, for example, had to reduce its prices by an average of 20 percent in the mid-nineties after the Metro retail chain demanded harmonized conditions for all markets served in Europe. International Pricing proactively counteracts these developments by balancing grey market risks and sales potential. The issue of reimports and grey markets can be solved substantially by implementing a price corridor.