The Selected Aspects of a Company's Pricing Policy in Foreign Markets

Wojciech Grzegorczyk
European Research Studies Journal, Volume XXVIΙ, Issue 1, 422-433, 2024
DOI: 10.35808/ersj/3367


Purpose: The purpose of the article is to show the relationship between the pricing policy of the exporting company with selected financial factors of price and forms of payment, and to present the possibility of price differentiation in foreign markets. Design/Methodology/Approach: The article uses the method of critical analysis of domestic and foreign literature (descriptive and statistical) in the field of international marketing, export transactions and corporate financial management. Findings: In determining the price in exports, it is necessary to take into account the cost of manufacturing and delivering products to the foreign market, as well as factors of a financial nature These primarily include the exchange rate between the exporter's currency and the currency of payment, the inflation rate in the importer's country and the form of payment for exported products. These factors reduce risk in export transactions and allow price differentiation for exported products. Practical Implications: Taking into account the relationship between the exchange rate of the exporter's currency and the currency of payment, as well as the inflation rate in the countries-parties to the transaction, makes it possible to limit the risk of reduced export receipts due to exchange rate changes and inflation in the importer's country. On the other hand, the choice of a specific form of payment reduces the risk of not receiving payment for exported products in whole or in part. In turn, the choice of a specific trade formula (INCOTERMS 2020) determines the obligations of the parties to the transaction and affects the exporter's costs. These consequently determine the amount of the export price. Originality/Value: The practical implications of the problems addressed in the article relate to the exporting company's decision to choose foreign markets and determine the price of the exported product. It is then that financial factors and the form of payment play a special role. Not considering them leads to excessive commercial risks and increases the cost of the export transaction.

Cite Article (APA Style)