This document discusses export pricing and methods of payment. It defines price and lists factors that affect export price determination like costs, competition, demand elasticity and government policies. It then outlines various export pricing strategies and methods of payment like letters of credit. Letters of credit are described as advantageous for both exporters and importers by guaranteeing payment while avoiding blocked funds or bad debts.

1. EXPORT PRICING AND Presented by
METHODS OF PAYMENT group 3

2. DEFINATION OF PRICE
Price is the value of utility of goods and services expressed
in terms of money.
It is one of the important factors that determine the success
of an export organization.
International market being buyer market, the price quoted by
an export should be reasonable and final.

3. FACTORS AFFECTING DETERMINATION OF EXPORT PRICE:
a. Cost of the Product
b. Competition
c. Elasticity of Demand
d. Government Policies
e. Incentives offered by the Government
f. Frequency of purchase
g. Product Differentiation and Brand Image
h. Miscellaneous factors

4. IMPORTANCE OF EXPORT PRICING
a. Helps to achieve objectives
b. Increases probability
c. Helps to penetrate the market
d. Helps to skim the cream
e. Helps to increase market share
f. Helps to develop brand loyalty
g. Helps to face competition
h. Reflects the quality of product

5. EXPORT PRICING STRATEGIES
a. Skimming pricing strategies
b. Penetration pricing strategy
c. Transfer pricing
d. Marginal cost pricing
e. Market oriented pricing
f. Competitors pricing

6. EXPORT PRICING QUOTATIONS
a. Five on board (FOB) quotation
b. Cost and freight(C&F) quotation
c. Cost Insurance and freight (CIF) quotation

7. CONDITIONS FOR REALIZATION OF EXPORT PAYMENT
a. Payment in permitted currencies
b. Prevent Immobilization of foreign exchange
c. Submission of shipping documents
d. Export full value of goods
e. Authorized dealers
f. Different form of payments

8. FACTORS AFFECTING EXPORT PAYMENT TERMS
a. Nature of product.
b. Creditworthiness of buyer.
c. Exchange and import controls in importing country.
d. Competitors credit terms.
e. Economic situation in importers country.
f. Sixe of export order.
g. Financial position of the exporter
h. Relation with the importer.

9. METHOD OF PAYMENT
a. Payment in advance.
b. Open account.
c. Consignment stock payment.
d. Documentary bills of exchange.
e. Letter of credit.

10. ADVANTAGES OF LETTER OF CREDIT
For Exporter For Importer
a. Avoids blockage of finance a. Better terms of trade
b. Prevents Bad Debts b. Timely Delivery
c. Fulfillment oh Import c. Overdraft Facility
Regulation d. NO Blocking of Finance
d. Guarantee of Payment e. Good Relations &
e. Avoids refusal by importer Protection for both
Parties