International Business Report

1. An introduction to the topic and the report/main points of the article

The article “Pricing for Global Markets” by Cavusgil (1996) primarily discusses the challenges and key considerations in international pricing, as well as the approaches to price setting, and transfer pricing practices. With that said, the purpose of this report is “to review corporate practices in global price setting,” (67). Generally, pricing is subjective and complex in domestic business. With the longer distribution channels, additional cost considerations, trade barriers, and multiple currencies, it becomes more challenging to set prices in international business (66).  Generally, prices have the following functions in global markets; it helps determine the level of motivation expected of intermediaries, compensate for weaknesses in other components of the marketing mix, it impacts promotional strategy and spending and influences clients' perceptions of value (67). The globalization of marketing has increasingly put pressure on MNC pricing systems (67). Factors that affect global pricing include the location of the production facility, nature of industry or product, distribution system, foreign currency differentials, and environment and location of the foreign market (68-69). Successful approaches and a set of decision rules have been developed by managers to setting prices for international subsidiaries and customers. Furthermore, there is a need for greater uniformity of prices across global markets as a result of the increasing globalization of markets (70). A decision-making framework is an approach that is currently used to set prices internationally (73). Pricing decisions can't be attained in isolation from other aspects such as credit terms, follow-up sales opportunities, after-sale service, product quality, and so on. However, pricing globally remains still an organizational challenge (77).         

2. How does the report relate to specific class content/concepts?

This report relates to the International Business class by providing concepts that affect the aspects of the business. For instance, the report discusses how pricing globally has become increasingly challenging for international businesses to set. Also, the report introduces the concept of globalization, marketing, decision-making framework, etc. that are vital components in understanding business. As such, this report helps to expand one's knowledge of the specific class concepts/content. Furthermore, by introducing the aspect of pricing in global markets, business students can obtain credible information about how pricing influences international businesses.         

3. Who might disagree with the article information and why?

An economist might disagree with this article's information because most of them are always skeptical about price setting. Also, he/she might emphasize how controversial the setting of prices is in relation to the decision-making framework for international pricing. Therefore, the economist may find limitations in the article's overall recommendations for price setting.  

4. How can the article/information relate to a practical management setting?

The article/information can relate to a practical management setting by the aspects of providing a decision-making framework for setting prices globally. With this knowledge, international businesses can practically manage their product prices to influence customers’ perception of value.     

5. What is your reaction/perspective on the issues/events in the article?

Generally, my perspective on the issue in the article is that it is indeed challenging for international businesses to set prices in a globalized world with longer distribution channels, multiple currencies, trade barriers, and so on.