What kind of pricing strategy do international marketers ...

[KimWrice]

What kind of pricing strategy do international marketers typically use for luxury consumer markets? Why?

Question 2

Why might a business want to design a standardized global product? Why might product adaptation be necessary instead?

[Briannahope]

Answer to Question 1

Targeting luxury markets often allows international marketers to use a global standardization strategy. Luxury products typically target individuals with high incomes who are likely to have similar needs and wants and an equal ability to pay. Given this, luxury products are much more likely to have a global price. Otherwise, products could be purchased in cheaper markets and returned to local markets possibly to enter into a grey market.

Answer to Question 2

A global product can create economies of scale in R&D, production, and marketing. It also allows a company to compete against other global marketers. However, developing a global product is not always possible, and product adaptation may be required. For instance, products may be used in different environmental situations. They may have to operate in different political and legal environments. Consumers may have different cultural needs and norms. Local competition in foreign markets may be different than in domestic markets, and customization may be necessary to gain a competitive advantage.