Foreign Exchange Rate Fluctuation on Pricing Decision

What implication do fluctuations in foreign convince range have on the pricing purposes of export marketing managers? world-wideisation is no longer an abstraction but a ascetical reality that virtually all firms, large and a small, face. Firms that necessity to survive in the 21st century must tarry all encompassing force that pervades every aspect of business. However, exchange rate fluctuation is an issue that affects the decisions marketing managers make near pricing. Management faces different decision situations, depending on whether currencies in rudimentary markets have strengthened or weakened relative to the al-Qaeda domain currency. If the class country currency is weakened this would be an opportunity as exchange would be in a favourable position. A producer in a weak-currency country can choose to cut export prices to increase market share or maintain its prices and reap healthier dough margins. When revenues are translated into home country, the returns would be substancial. On the other gain it is a different situation when a companys home currency strengthens, management would see this as adverse for exportation as overseas revenues would be reduced when translated to home country currency.

Management in making there decision must consider currency fluctuation even though the degree of exposure varies among companies. In an example, Honda is heavily dependent on the North American market, which accounts for more than half of its operating income. In trying to reduce currency fluctuation about tercet quarters of the cars Honda, sells in America are produced in the get together States. In late 2000 the dollar had fallen to 108 waste compared to 113 Yen the previous year, the unfavourable shift had a direct veto impact on corporate profits. In responding to currency fluctuations global marketers could utilize other elements of the marketing mix besides price. If beseech ids inelastic then the upward price adjustment overdue to strengthening of the currency would have... If you want to get a generous essay, order it on our website: Orderessay

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