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CERTIFICATE IN EXPORT MANAGEMENT SERIES(2008)

Author:  John R. Jagoe, Managing Director, The Export Institute of the United States

1. PRICING YOUR PRODUCTS COMPETITIVELY FOR EXPORT:
• Allocate Actual Costs to Your Export Prices:
• Exclude certain costs that you have already included in your domestic price, i.e., indirect manufacturing overhead, general and administrative expenses (G & A) and U. S. marketing costs.
• Five Basic Export Pricing Methods:
• "U. S. Standard Ex Works Price" Method:
1. Flow Chart: Profit Analysis and Projected Market Performance
• "U. S. Standard Ex Works Price Plus Export Costs" Method:
1. Flow Chart: Profit Analysis and Projected Market Performance
• "G & A Overhead and Discounted Profit Margin" Method:
  1. Flow Chart: Profit Analysis and Projected Market Performance
• "G & A Overhead Without Profit Margin" Method:
  1. Flow Chart: Profit Analysis and Projected Market Performance
• "Floor Price Without G & A Overhead Method (Marginal Costing)":
  1. Flow Chart: Profit Analysis and Projected Market Performance
• Export Pricing Flow Charts:
• Three flow charts detailing the costs to move goods from the exporter's facility to the final customer (end-user) in the foreign market.
  1. Flow Chart #1: Costs to Produce and Move Product from the Exporter's Facility Through the U. S. Port of Export to the Foreign Port of Import
  2. Flow Chart #2: Costs To Move Product from the Foreign Port of Import to the Final Customer in the Foreign Market
  3. Summary Chart #3: Accumulated Cost to Produce and Deliver Product to the Final Customer in the Foreign Market.
2. SEVEN MARKET ENTRY PRICING STRATEGIES:
• Exploiting the Market: Highest profit margin for as long as possible. Then leave when profits decline.
• High-Quality Pricing: Systematic development of market with excellent products and customer service.
• Life-Cycle Pricing: Coordination of prices and profit margins to the anticipated life cycle of the product
• Sharing the Market: Setting prices that will not create a competitive imbalance in the local market.
• Matching Competitive Prices: Maintaining margins to meet competitive prices in the market.
• Developing the Market: Systematic market development with competitive prices over period of time.
• Buying the Market: Disposal of excess or obsolete products at very low prices as quickly as possible.
3. DETERMINE YOUR STANDARD EXPORT EX WORKS PRICE AND PRE- TAX PROFIT MARGIN:
• Flow Chart: Worksheet to Determine Your Standard Export Ex Works Price and Pre-Tax Profit Margin
• Includes your production cost, U. S. marketing costs, incremental export costs, gross export ex works price before discounts and sales commissions have been deducted, and net export ex works price after discounts and sales commissions (and all other price concessions) have been deducted from the export price.
4. CREATE YOUR OWN INTERNATIONAL PRICE SHEET:
• Illustration: Sample of an Export Ex Works International Price
• Includes product models/part numbers, product descriptions, ex works price and price expiration dates. Does not include costs to ship the goods from your facility. Also excludes payment terms and conditions because they will be provided later in the price quotation/proforma invoice.
5. FIVE-YEAR EXPORT FORECAST:
• Table: Sample Five-Year Export Sales Forecast
• Breaks down five-year sales projections into territories, delivery dates of first orders and individual/cumulative annual sales volumes over a five-year period.
6. FIVE-YEAR EXPORT BUDGET:
• Table: Sample Five-Year Export Budget
• Item-by-Item analysis of the 23 major categories and 30 sub-categories included in an accurate and complete Five-Year Export Budget. Will assist you in determining your total export administration expenses, incremental costs to export, and annual and cumulative profit/(loss) before income taxes.