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The Factors Involved in Setting International Prices

The determination of the international pricing policy is essential for the management team of an enterprise that wants to develop its activities abroad and set a long-term vision for the new markets. Pricing, as part of marketing policy, has a direct impact on the dynamics of sales and profitability, a false step in pricing may immediately affect the results. It is crucial to consider the specifics of foreign markets, the economic, political, legal, social, and cultural environment of a country to set prices. This essay will discuss the central factors involved in setting international prices for products or services.

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It is necessary to keep in mind the peculiarities of international trade, as opposed to domestic business. Kotler states that the management of the company should take into account economic factors when setting global prices because sales abroad involve the cost of transportation and importer, wholesaler, and retailer margins (2015). Commercial features also include competition, income distribution, inflation, exchange rate, demand for certain goods, and other elements that might influence the establishment of prices (Rique Media, & Sumeet Marketing Inc., 2019). The situation in the world might impact the company’s decision to choose a global pricing strategy or standardize its products or services.

Another scope of features that are involved in international pricing setup is political factors. It is suggested that laws, tariffs, regulations, health and safety standards, or other legislative measures established in certain countries might require adjusting goods according to local standards (Rique Media, & Sumeet Marketing Inc., 2019). The necessity to make modifications or changes might influence international prices that are proposed to clients.

For instance, many countries tend to regulate specific industries, such as pharmaceutical or oil and gas production, which means that prices for certain products might be capped by local authorities (Wolfe, 2017). Thus, it is essential to check the internal regulations that all countries have when establishing international prices.

Furthermore, the social situation in local and global markets might have an impact on the company’s international pricing strategy. Social factors include unique culture, climate, education, religion, tastes, values, and preferences that consumers in various countries have (McCormick, 2016). For instance, the development of the middle class in Asian countries influenced the rise of consumerism and the increase in expenditures on various goods (European Commission, n.d.).

It is reported that the same situation in India has led to higher spending on services, such as mobility, healthcare, and entertainment, and on products, such as apparel, personal care, gadgets, and housing (Ojha & Ingilizian, 2019). Therefore, social factors should be observed strictly to determine proper international prices.

Technological changes and advancements are also involved in the process of establishing global pricing strategies. It is suggested that digital solutions, technological improvements that exist in specific countries might influence the level of competition in local markets (Rique Media, & Sumeet Marketing Inc., 2019). As the company usually uses unique technologies and infrastructure, the necessity to set operations abroad might have an impact on product and services prices because supporting technologies would require additional expenditures to establish a pipeline of activities (Rique Media, & Sumeet Marketing Inc., 2019). These factors might affect how a company can price products internationally.

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To conclude, one might say that there is a variety of factors that have an impact on the international prices of companies across the world. International treaties, trade practices, and customs might challenge the management team to find ways how to address the international pricing policy of the company. It is crucial to evaluate specific factors that local markets experience to price products and services competitively and ensure that the marketing strategy of an organization is adequately adjusted to the unique reality of the country.


Kotler, P. T., & Armstrong, G. (2015). Principles of marketing (16th ed.). Pearson.

European Commission. (n.d.). Developments and forecasts of growing consumerism. Web.

McCormick, M. (2016). Pricing issues for international marketing. Black Curve. Web.

Wolfe, M. (2017). Factors to determine an international pricing strategy. Web.

Ojha, N., & Ingilizian, Z. (2019). How India will consume in 2030: 10 megatrends. Web.

Rique Media, & Sumeet Marketing Inc. (2019). Pricing in the international marketing environment. Web.

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