Carl Arthur Solberg, Barbara Stöttinger, and Attila Yaprak
Executive Summary
Pricing plays a critical role in the internationalizing firm’s effort to be globally integrative yet locally responsive. A wide array of external and internal factors that differ from market to market and are subject to constant changes must be considered. To maintain the firm’s financial prosperity under these conditions, it is crucial to develop more sophisticated pricing strategies and execute them effectively. Although research in many dimensions of marketing has flourished in the past few decades, pricing, especially in the context of international markets, has remained an underresearched area in the literature. Solberg, Stöttinger, and Yaprak aim to fill this gap by extending existing knowledge in the field in various ways.
On the basis of the degree of globality in the firm’s industry and the firms’ own preparedness for international involvement, Solberg, Stöttinger, and Yaprak develop a taxonomy into which they classify the export pricing practices of the 24 firms in their sample. The categories consist of local price follower, multilocal price setter, global price follower, and global price leader. This research is based on the pricing behavior of exporters from three countries, Austria, Norway, and the United States, which represent three different regions of the world; use of the different regions provides greater generalizability to the findings. The research focuses on three key ingredients of pricing behavior: information needs, strategic choice, and desired control.
Solberg, Stöttinger, and Yaprak obtain several key findings: First, globalization of markets does not necessarily lead to standardized prices; market idiosyncrasies, such as different levels of country risk, market size, and strategic importance of the market to the firm, typically justify adapted prices in local markets. Second, price transparency across borders in a global industry does not necessarily transcend all the export pricing practices of the individual firm; firms actively exploit these differences to their advantage. Third, information sources tend to become more varied, more sophisticated, and less dependent on foreign partners as the international preparedness of the firm increases. Fourth, experienced exporting firms hold much tighter control over their prices in different markets than their less experienced counterparts, typically over the entire pricing process. Similar results are observed in all three countries studied, which suggests that country background is not necessarily significant in the exporting firms’ pricing behavior and that pricing approaches could be relatively universal, not culture specific. Finally, the underlying framework that Solberg, Stöttinger, and Yaprak use appears to be a meaningful model through which exporting firms’ pricing practices can be investigated.
Biography
Carl Arthur Solberg is an associate professor and Department Chair of the Marketing Department at the Norwegian School of Management. He received his doctoral degree from the University of Strathclyde, Glasgow. His areas of interest include globalization, headquarters–subsidiary/intermediary relations, the role of market information, and offshoring. He has consulting experience in the petrochemicals industry. In addition to Journal of International Marketing, he has forthcoming contributions to Managerial Issues in IB, Management International Review, and Advances of International Marketing.
Barbara Stöttinger is an associate professor in the Department of International Marketing and Management at the Wirtschaftsuniversität Wien. Before joining the Wirtschaftsuniversität Wien, she gained industrial experience as a product group manager and in consulting with banks and investment and consumer good companies. Professor Stöttinger has extensive experience as a lecturer in marketing and international marketing (e.g., at the University of Budapest; the University of Ljubljana; the University of Economics, Prague; Ecole Supérieure de Commerce, Bordeaux (France); Aston Business School; the MBA program at Texas A&M University; the international MBA program at the Wirtschaftsuniversität Wien [where she also won Best Teacher Award]; and the executive MBA program at the University of Tampa, Florida). Her work has been published in leading journals, including Journal of International Marketing, Advances in International Marketing, International Business Review, Management International Review, Marketing Education Review, and International Marketing Review. She is also coauthor of the textbook, Global Marketing-Management (in German, with Warren J. Keegan and Bodo B. Schlegelmilch).
Attila Yaprak received BS and MBA degrees from Indiana University. He received his doctoral degree in Marketing and International Business from Georgia State University. His teaching and research interests are global marketing strategy and cross-national consumer behavior. He has consulting experience in the automobile industry and has advised foreign trade promotion offices of several countries through the International Trade Center of the World Trade Organization. In addition to the Journal of International Marketing, he has also recently published in Journal of Business Research. He is currently conducting research in 12 emerging countries on consumer value transformations and their role in marketing strategy.
Journal of International Marketing, Vol. 14, No. 1, March 2006
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