UNDERSTANDING THE HIDDEN VALUE OF CORPORATE RESOURCES!
Most companies have hidden overlooked resources representing 20% and 30% of their balance sheet!
Valuating your products can be the most challenging, especially pricing overlooked holdings from underutilized resources that affect their corporate balance sheet and profit margins.
- Giving complete and accurate quotations, choosing the terms of the sale, and selecting the payment method are four critical elements in making a profit on your sales.
- The key elements include assessing your company’s market objectives, product-related costs, incremental cost, currency cost market- demand, and competition. Other factors to consider are transportation, taxes and duties, sales commissions, insurance, and financing.
- These challenges are always present in import-export and domestic markets, no matter the industry the size of the company.
- Larger companies have in-house departments to achieve the companies objectives.
- Smaller companies can achieve results by partnering with governments, larger companies and experts in the trade banking industry.
Valuating Products for Domestic & Export Markets.!
Valuating goods for export markets, as in the domestic market, the price at which a product or service directly determines your company’s revenues. Your firm’s market research should include an evaluation of all variables that may affect the price range for your product or service.
If your company’s price is too high, the product or service will not sell. If the price is too low, export activities may not be sufficiently profitable may create a net loss.
Traditional components for determining proper pricing are costs, market demand, and competition. Each- component- must be compared with your company’s objective in entering the foreign market. An an-analysis of each component from an export perspective may result in export prices being different from domestic prices.
Some of the costs are in addition. And are typically borne by the importer. These include tariffs, customs fees, currency fluctuation, transaction costs (including shipping), and value-added taxes (VATs). These costs can add substantially to the final price paid by the importer, sometimes resulting in a total that is more than double the price charged in products often compete better on quality, reputation, and service than they do on price—but buyers consider the whole package.
DEVELOPPING A PRICING STRATEGY!
As you develop your export pricing strategy, these considerations will help determine the best price for your product overseas:
- What type of market positioning (i.e., customer perception) does your company want to convey from its pricing structure?
- Does the export price reflect your product’s quality?
- Is the price competitive?
- What type of discount (e.g., trade, cash, quantity) and allowances (e.g., advertising, trade-offs) should your company offer foreign customers?
- Should prices differ by market segment?
- What should your company do about product-line pricing?
- What pricing options are available if your company’s costs increase or decrease?
- Is the demand in the foreign market elastic or inelastic?
- Is the foreign government going to view your prices as reasonable or exploitative?
- Do the foreign country’s antidumping laws pose a problem?
ESSENTIAL FOREIGN MARKET OBJECTIVES!
Elements of Pricing Analysis
An essential aspect of your company’s pricing analysis is the determination of market objectives. For example, is your company attempting to penetrate a new market, seeking long-term market growth, or looking for an outlet for surplus production or outmoded products? Marketing and pricing objectives may be generalized or tailored to particular foreign markets.
The actual cost of producing a product and bringing it to market is key to determining if exporting is financially viable.
The cost-plus method is when the exporter starts with the domestic manufacturing cost and adds administration, research and development, overhead, freight forwarding, distributor margins, customs charges, and profit. However, the effect of this pricing approach may be that the export price escalates into an uncompetitive range once exporting costs have been- included.
Marginal or Incremental cost pricing; is a more competitive method of pricing a product for market entry.
This method considers the direct out-of-pocket expenses of producing and selling products for export as a floor beneath which prices cannot be; assessed without incurring a loss. For example, additional costs may occur because of product modification for the export market. Costs may decrease. However, the export products are stripped-down versions or made without increasing the fixed costs of domestic production.
The costing must be assessed- for domestic and export products according to how much benefit each product receives from such expenditures, and may include:
- Fees for market research and credit checks
- Business travel expenses
- International postage and telephone rates
- Translation costs
- Commissions, training charges, and other costs associated with foreign representatives
- Consultant and freight forwarder fees
- Product modification and special packaging costs
COUNTERTRADE IN NEW MARKETS!
COUTERTRADE TO LEVERAGE HOLDINGS!
- Companies from food and beverage companies to energy and automation technology Giants understand the value of Trade Banking, Countertrade Counter purchase, Switch Trading, Offset and other forms of alternative capital solutions to gain a competitive advantage over others.
- Companies like Pepsi Cola, General Motors, McDonnell Douglas, Caterpillar have CounterTrade Banking departments leveraging and exchanging their underutilized resources to expand & grow their markets.
MARKET DEMAND!
Market demand per capita measurement for consumer goods and services is a good gauge of a market’s ability to pay for Some products. (for example, popular fashion labels) create a strong demand that even low per capita income will not affect their selling price. Simplifying the products to reduce their selling price; may be an answer for your company in markets with low per capita income. Your company must also keep in mind that currency fluctuations may alter the affordability of its goods and services.
COMPETITION!
In the domestic market, companies carefully evaluate their competitors’ pricing policies. You will also need to assess your competitors’ prices in each potential export market. If there are many competitors within the foreign market, you may have to match the market price or even underprice the product or service for the sake of establishing a market share.
If the products or services are new to a particular foreign market, it may be possible to set a higher price than in the domestic market.
PRICING SUMMARY!
It’s important to remember several key points when determining your product’s price:
- Determine the objective in the foreign market.
- Compute the actual cost of the export product.
- Compute the final consumer price.
- Evaluate market demand and competition.
- Consider modifying the product to reduce the export price.
- Include “non-market” costs, such as tariffs and customs fees.
- Exclude cost elements that provide no benefit to the export function, such as domestic advertising.
TRADE BANKING & YOUR COMPANY!
- Corporations, considering adding a Trade Banking Division to their operations. Can increase company sales and gain entry into complex markets, generate new business.
- Alliance Merchant Trade Banking provides a flexible Increment Cost formula, an umbrella of services including Target-Marketing and a team of Globally-minded in-house-trained personnel without interfering with clients present operations.
- Our Career-minded entrepreneurs are chosen from referrals of our clients around the globe to work from our international offices, from home full and part-time.
PERFORMANCE GUARANTEE!
- When Alliance enters into a Trade Agreement with a client, Alliance, at its expense, evaluates the potential of the client corporate-overlooked holdings. Initiates a professional targetted presentation- distributed - to potential new customers who have never heard of you or your company. And provide you with full disclosure reporting clients' reactions and opinions of goods, price point customer acceptance.
- Alliance is not fee-based nor charge interest; it is reimbursed on a pre-agreed agreement between the Client and Alliance and is compensated based on a Guaranteed performance.
Alliance Dual Currency Trade Finance!
Dual Currency finance is an essential element in reengineering your balance sheet. Finance long or short-term obligations & leverage a wide range of goods, services and other assets of economic value.