Price Kitkat

LECTURER: MS.
MAI QUYNH ANH
PRICE
KITKAT

OUTLINE FACTORS AFFECTING INTERNATIONAL

PRICING STRATEGIES
Cost of production
INTERNATIONAL PRICING OBJECTIVES Demand
AND STRATEGIES Business Competition
OBJECTIVES APPROACHES IN INTERNATIONAL Taxes, Tariffs, and Administrative Costs
PRICING STRATEGIES Inflation and exchange rate
Pricing Policy Market characteristics
Price decisions
Approaches to International Pricing
Countertrade
Price Escalation WAYS TO BETTER CONTROL THE
BASIC PRICING STRATEGIES TO APPLY PRICE IN INTERNATIONAL MARKET
Value Based Pricing
Lowering Product-Related Cost
Market Penetration Pricing
Lowering Tariffs
Competition Based Pricing
Lowering Distribution Costs
Skimming Price Market
Cost Based Pricing Using Foreign-Trade Zones to Lessen
Product Bundle Pricing Price Escalation
INTERNATIONAL
PRICING OBJECTIVES
AND STRATEGIES
OBJECTIVES APPROACHES IN
INTERNATIONAL PRICING STRATEGIES
BASIC PRICING STRATEGIES TO APPLY

OBJECTIVES APPROACHES IN
INTERNATIONAL PRICING STRATEGIES
PRICING POLICY
Price in marketing refers to the value we pay in exchange for the

product and services offered by a company.
Price is considered a vital element of marketing because it
dictates a company’s survival and profit.
Pricing policy refers to how a company sets the prices of its
products and services based on costs, value, demand, and
competition.
PRICING DECISIONS
Price decisions are viewed in two ways: pricing as an active instrument of

accomplishing marketing objectives, or pricing as a static element in a business
decision.
Companies should keep a check on the price of a product because an
overpriced or underpriced product does not attract customers.
For example, like H&M in Vietnam can source

raw materials at a low cost, so H&M maintains a
low average price in all markets. H&M's pricing
strategy aims to expand and capture many
customer segments with diverse spending
levels.H&M's prices are quite diverse and target
young and dynamic customers. Every year, the
brand spends about 5% of its revenue on
discounts on new collections.
APPROACHES TO INTERNATIONAL PRICING
Market segmentation from country to country or market to market, competitive
pricing in the marketplace, and other market-oriented pricing factors, including
cultural differences in perceptions of pricing.
COUNTERTRADE
Countertrade is a pricing tool that every international marketer must be ready to
employ, and the willingness to accept a countertrade will often give the company
a competitive advantage.
PRICE ESCALATION
The higher prices reflect the higher costs of exporting.
BASIC PRICING STRATEGIES TO APPLY
VALUE BASED PRICING
A strategy of setting prices primarily based on a consumer's

perceived value of a product or service.
Kitkat is a high market share with over 300+ unique flavors limited
by region. Products are named ''You can do it'', ''Good luck''. Tend
to buy local-taste limited edition KitKat products.
MARKET PENETRATION PRICING
Attract customers to a new product or service by offering a lower price during its
initial offering.
COMPETITION BASED PRICING
Used in a broad sense to include any

competitive strategy, including
product design and marketing
decisions.
Kit Kat's products are priced higher
than those of Big Shots like Meiji. ,
DARS, Bourbon, Pocky, and other
chocolate brands.
Demand for Kitkat products is too high
and thanks to the variety of products
and tastes, Kitkat has always been
popular in Japan.
SKIMMING PRICE MARKET
Price skimming is a product pricing

strategy by which a firm charges the
highest initial price that customers will
pay and then lowers it over time.
Product prices are high due to special
and limited products offered for a short
time and served seasonally, some
limited products with quite expensive
prices like Hojicha KitKat, Sweet Potato
KitKat, Ume KitKat, Onsen Manju KitKat,
and other special KitKat are sold on
Chocolatory and Amazon.
COST BASED PRICING
Product bundling is where the company decides to combine certain products to

sell the bundle at a reduced price.
PRODUCT BUNDLE PRICING
Cost-based pricing is the practice of setting prices based on the cost of the goods
or services being sold. If the business can make the product for less than their
competitors, they can price it lower, and do more in bulk sales.
FACTORS AFFECTING
INTERNATIONAL
PRICING STRATEGIES
Active marketing in several countries
compounds the number of pricing
problems and variables relating to price
policy.
The country in which business is being
conducted, the type of product,
variations in competitive conditions, and
other strategic factors affect pricing
activity.
COST OF PRODUCTION Price in international marketing cannot be
determined without considering the cost of the
product. Fixed and variable costs of production,
marketing and transport expenses are included
in the cost of production.
DEMAND Demand is another factor that determines the

prices in the international markets. The demand
in international markets is also affected by a
number of factors which are different from those
operating in the domestic market.
BUSINESS COMPETITION Price cannot be determined without considering

the strategy of competitors.
TAXES, TARIFFS, AND
ADMINISTRATIVE COSTS
A tariff, or duty, is a special form of taxation. Like other forms of taxes, a

tariff may be levied for the purpose of protecting a market or for increasing
government revenue.
A variety of administrative costs are directly associated with exporting and
importing a product. such costs are relatively small, they add to the overall
cost of exporting.
INFLATION AND
EXCHANGE RATE
Inflation and exchange rate also have a huge impact on the international pricing strategy of
companies. Companies need to adapt the prices to the different inflation ratios in order to
work against this effect.
For example, The inflation rate in Vietnam is 0% and in the Japan country it is 15%, that
means this would cause the Vietnam company’s proceeds to be 15% lower, and therefore it
would have to raise its prices accordingly (Unless the foreign government prohibits a rise in
prices for the product). On the other hand, international companies like Kitkat may also enjoy
the benefits of the cost advantages created by the different inflation and exchange rates
among countries.
MARKET
CHARACTERISTICS
Consumer Income level: GNP/person. Differences in income and

price level cause the elasticity of demand for a given good to also
vary.
Information on the market demand → Ceiling and flooring price
Importance of the product to the consumer.
The margin of profits.
WAYS TO BETTER
CONTROL THE
PRICE IN
INTERNATIONAL
MARKET

Lowering Product Related Cost

Out source their products internationally.
Eliminate costly functional features - lowering overall product
quality.
Lowering Tariffs
Tariffs account for a large part of price escalation -> seek
ways to legally lower the rate
Lowering Distribution Costs
Analyze the distributing procedures of and intent to reduce as
much as possible all intermediaries.
Eliminating or reducing middlemen.
Fewer middlemen may mean lower overall taxes.
For example, While many manufacturers had to cut prices in
wake of Japan’s deflation, Louis Vuitton, a maker of branded
boutique goods, was able to increase prices instead. A solid
brand name and direct distribution have permitted Vuitton’s price
strategy. Vuitton’s leather monogrammed bags have become a
Japanese buyer’s “daily necessity,” and Vuitton distributes
directly and sets its own prices.
Using Foreign Trade Zones to Lessen Price Escalation
Imported goods are stored or processed without imposing tariffs
or duties until items leave FTZ areas and are imported into the
host country.
FTZ’s can lower costs through:
Lower duties imposed
Lower labor costs in importing country
Lower ocean transportation costs with unassembled goods
(weight and volume are less)
Using local materials in final assembly
For example, A U.S. manufacturer of window shades and mini
blinds imports and stores fabric from Holland in an FTZ, thereby
postponing a 17 percent tariff until the fabric leaves the FTZ.
THANKS FOR YOUR ATTENTION

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LECTURER: MS.

MAI QUYNH ANH

OUTLINE FACTORS AFFECTING INTERNATIONAL

BASIC PRICING STRATEGIES TO APPLY

Price in marketing refers to the value we pay in exchange for the

Price decisions are viewed in two ways: pricing as an active instrument of

For example, like H&M in Vietnam can source

VALUE BASED PRICING

A strategy of setting prices primarily based on a consumer's

Used in a broad sense to include any

Price skimming is a product pricing

Product bundling is where the company decides to combine certain products to

PRODUCT BUNDLE PRICING

DEMAND Demand is another factor that determines the

BUSINESS COMPETITION Price cannot be determined without considering

A tariff, or duty, is a special form of taxation. Like other forms of taxes, a

Consumer Income level: GNP/person. Differences in income and

Lowering Product Related Cost

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