The primary objective of this Learning Unit is to understand the importance of an appropriate pricing strategy when entering new export markets. We are going to examine the pricing options available to the exporter and outline the criteria to be used when establishing a pricing strategy. We will also look at the criteria defined in pricing under Incoterms 2000.

One of the most complicated aspects of foreign trade is pricing policy. An incorrect pricing policy can lead to total failure in international markets. First of all we should find out about prices in various international markets, this information will allow us to have some real criteria for setting our export prices. However, we will meet the familiar dilemma of global or local prices. From another point of view the price is attached to the selected Incoterms, in the more competitive markets it is habitual to deliver product to client's premises, thereby offering DDP prices. In some countries this is impossible, and it will cause us problems. One of the solutions can be if we have FOB Global prices and then we will be able to adapt them to each market according to the costs of this market.