Pricing and Ethical Issues for Global Markets

Abstract

Multinationals operating in global markets require analyzing several pricing considerations. They require setting appropriate prices of their products for each of the markets they operate in. Price of a product is an important criterion which decides whether a product will get sold or not. Companies contend with a number of issues in pricing like geographical pricing, price escalation, transfer prices, dumping charges, pricing for emerging markets, and pricing for individuals at the bottom of the pyramid. There are several legal and ethical aspects in pricing. These include deceptive or illegal prices – deceptive reference pricing, loss leader pricing, and bait and switch approach towards pricing; predatory pricing; price discrimination; and price fixing. The contribution of the study is that it conducts a conceptual analysis of the literature on pricing strategies and ethical issues. The analysis is validated by collecting and analyzing information from literature. It discusses how multinationals facing such situations should handle them, establish their businesses in global markets, and generate substantial revenues and profits.