I (Meaning and importance of Exports) Unit Structure

10.5 EXPORT PRICING STRATEGIES 
Pricing strategy refers to the basic policy adopted in respect 
of pricing in a given market situation. There are several pricing 
strategies. The exporter may adopt a particular strategy at the time 
of launching the product in the overseas market. The exporter has 
to adopt pricing strategies during the lifetime of the product. The 
exporter should constantly review the pricing strategy adopted by 

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his firm. If required, the exporter may switch over from one strategy 
to another. 
The following are some of the important pricing strategies. 
1) Skimming pricing strategy 
– 
A high premium price is charged when a product is launched 
in the market. This strategy aims at high profit margins in the early 
stages of product introduction. The skimming pricing strategy can 
be of two types i.e. 
– 
a) Rapid skimming pricing 
– 
When high prices are charged, and the product is promoted 
with heavy promotional expenditure. 
b) Slow skimming pricing 
– 
Where high prices are charged, and there is limited 
promotional effort to promote the product. 
2) Penetration pricing strategy 
– 
A strategy of charging law prices in the early stages of 
product introduction in the market is called 
“Penetration Pricing 
Strategy”. 
The objective is to launch a new product at a lower price to 
capture as large a share of the market as possible within a short 
time. 
This strategy can be of two types. 
a) Rapid Penetration pricing strategy
Where low prices are charged, and the product is promoted 
with heavy promotional expenditure. 
b) Slow Penetration pricing strategy
Where low price is charged, and there is limited promotional 
expenditure to promote the product.