Price Standardization

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Price Standardization

Price Standardization in International Trade

Meaning of Price Standardization, according to the Dictionary of International Trade (Global Negotiator): Price strategy for international markets based on setting a price for the product as it leaves de factory. At its simplest it involves setting a fixed world price at the headquarters of the firm. This fixed world price is then applied in all markets after taking account of factors such as foreign exchanges rates and variance in the regularity context. This pricing strategy might be appropriate if the firm sells to very large customers, who have companies in several countries. In such a situation the firm might be under pressure from the customer only to deliver at the same price to every country subsidiary, throughout the customer's multinational organization. Another advantage of price standardization includes the potential for rapid introduction of new products in international markets and the presentation of a consistent price image across markets. See price differentiation.

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