Determining the price of a product or service in international markets is a complex task due to the variety of factors involved. In this week's publication, we will explore some of the key strategies that companies can adopt to ensure competitive and profitable prices on a global scale.

1. Understand the market

‍Before setting your prices, it's essential to understand your target market. This task includes not only analyzing direct competition, but also considering factors such as local purchasing power, consumer preferences, regulations, and economic conditions. Detailed market research is critical to making informed pricing decisions.

2. Categorize the costs involved

‍It is crucial to consider the costs involved in the production, distribution and commercialization of your products or services internationally, defining and categorizing the indirect costs and risks associated with operating in different markets, including:

• ‍Fixed and variable production costs: Os variable costs fluctuate according to the quantity produced and sold, while fixed costs remain constant regardless of the volume of production. Even if the customer fully assumes the costs of international shipping and other logistics expenses for loading and unloading, it is essential to consider the expenses involved in an international logistics operation, from the use of suitable packaging for transportation to the availability of the team responsible for packing the container. Direct costs are more related to the product, including expenses such as transportation, export packaging, customs fees, and others. On the other hand, the indirect costs are necessary for indirect production, as well as for export.

• ‍Costs of an export operation: Understanding fixed and variable costs, direct and indirect, empowers companies to plan their budget more effectively, avoiding unnecessary expenses. In addition, the categorization of costs helps companies to better understand the impact of their pricing strategy based on competitive intelligence during the internationalization process. When analyzing export costs, that is, when carrying out this classification, companies can determine appropriate prices for the target market, allowing for a maximization of return on investment.

• ‍Costs of adapting the product to the target market: Just as it is essential to adjust the pricing strategy for export, it is equally crucial to adapt the product to the needs of the target market. An example of this is obtaining specific quality certifications, such as the UL seal for electronic equipment. In some countries, domestic regulations are so strict that importers require this certification to ensure product quality and safety. This certification is not just a formality, but rather a market requirement, which is often discovered during prospecting or through detailed market research. In addition to the costs related to quality certifications, it is also necessary to consider the expenses with the adaptation of the final package, including labels, design, and language-specific details of the destination country.

3. Establish the desired profit margin

Once the manufacturing price has been determined, it's crucial to add the desired profit margin. This step is essential to guarantee the viability and profitability of the operation.

At the same time, it is also essential to consider the exchange rate variation margin. After all, the exporter cannot expose himself to the risk that only fluctuations in the exchange rate will make the operation unfeasible.

4. Compare the ideal price and the price charged in the target market

The most effective approach to this comparison is to gather information about your target audience's willingness to pay and then use that data to determine the optimal price.

It is crucial to stress that, when it comes to prices, it is necessary to find a balance between competition and the profitability of your company. Therefore, all the variables mentioned earlier must be carefully evaluated.

In this sense, the use of competitive intelligence is indispensable - it is essential to observe the market as a whole, in addition to the prices charged by competitors, to find the ideal price.

5. Understand the competition

Understanding the competition involves evaluating how your company positions itself in relation to other market participants, especially those that operate in the same target market.

By having a deeper understanding of the competition, it is possible to collaborate effectively to maximize opportunities to capture a larger share of the market. This may involve adjustments to the pricing strategy to ensure profitability and offer distinct or innovative products to stand out from competitors.

6. Hire an expert consultancy

When considering hiring a specialized consultancy, AdvizeOne stands out as a strategic partner for your internationalization process. Our team of specialists offers comprehensive services, including identifying target markets, strategic planning, structuring services, and implementing processes.

In addition, we can provide essential additional features, such as process automation, market analysis, trend monitoring, and raising financial resources. With our expertise, you save time and resources, taking advantage of the specialized knowledge necessary to achieve the best results in your internationalization plan. Together, we can drive the success of your business in global markets.

If you want to know more, schedule a free consultation with one of our specialists in business internationalization through From this link.