I (Meaning and importance of Exports) Unit Structure

158 
= 20,000 
= $ 500 
ii) C&F = FOB + Freight 
= $ 600 
10.11
SUMMARY 
There are internal and external factors which determine the 
export price. Internal factors include cost, objectives of the firm, 
product, image of the firm, promotional activities, product life cycle 
etc. External factors include competition, demand, consumers, 
economic condition, channel of distribution, market opportunity etc. 
While determining the cost some basic data has been 
required such as product cost, cost of distribution, export cost, cost 
estimates, regulations in export country and importing country etc. 
Marginal cost pricing suggests that only variable costs 
should be recovered from export if the export is more competitive 
and the fixed costs can be recovered from the domestic market. 
There are several export pricing strategies like Skimming 
strategy, Penetration strategy, Probe strategy, Follow the leader 
strategy, Differential trade margins strategy, Standard export 
strategy, Market strategy, Transfer strategy, Trial strategy, Flexible 
strategy. 
Quotation is an offer or proposal made by an exporter in 
reply to the enquiry from an importer. Important types of quotation 
are FOB Quotation, C&F Quotation, CIF Quotation. 
 
 
 
 
10.12 QUESTIONS FOR SELF-ASSESSMENT 
 
1. 
Discuss the factors to be considered in export pricing? 
2. 
What are the various items of cost included in export pricing?
Explain it ? 
3. 
State the basic data required in export pricing? 
4. 
Explain in brief the pricing strategies? 
5. 
Write a short note on the FOB quotation? 
6. 
Bring out the impact of incentives on pricing? 
7. 
Write short notes on the following 
a) Skimming pricing strategy 

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