10.18.1 Regulatory influences on prices
Strategic pricing is closely related to dumping. Dumping is selling in one export market at a price lower than prices charged in the domestic market or in third country export markets. The sales prices may be lower than the production costs. Dumping is common, despite being discussed by the WTO. Two examples which frequently make newspaper headlines are:
- the export of agricultural and dairy products by European community countries to markets which have traditionally been served by Australia
- the US Export Enhancement Program which damages Australia 's wheat markets.
Dumping may attract anti-dumping legislation by local governments if it damages local industry.
Overcharging for products is a practice typical of monopolies. It is quite common in the pharmaceutical industry, where a patent on a new drug prevents competitors entering the market and permits the monopolist to charge excessive prices. Most developed countries have regulations designed to restrict such monopoly practices, but there is usually a delay between the onset of the practice and its suppression.
Turn to Hill (2005) now for his section on 'Strategic pricing'. Hill (2005) also ties each of the 'P' elements together in explaining how to configure the four P marketing mix. A practical example of using marketing to access the Thailand and Asian markets and avoiding the errors is part of the next reading.
In your text
Hill 2005, Chapter 17, pp. 601-603.
Reading 10.6
Hannen, M. 2000, 'Exporting success', Business Review Weekly ,
13 October, pp. 61-62.
Activity 10.8
In judging how far to go in standardizing elements of the marketing mix, managers must also be mindful of the interactions among them. What are some of the interactions?
That completes our discussion of the four Ps of marketing in the international context. As indicated in the introduction to this topic, we now consider R&D which has an intimate association with marketing.
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