Developing Export Pricing Strategies : Decision-making on price adaptation in B2B industrial trade

In nowadays globalized economies companies tend to expand their presence in the foreign markets by exporting their product offerings, which requires managers to revise their strategies to match the international environment. Furthermore, special attention must be paid to pricing since prices are indicated to be an essential strategic tool and have direct influence on profit. It is also known that there are internal company- and external environment-specific contingency factors that incline managers towards adaptation of their pricing strategies and affect export performance of companies. However, little is known about the process that leads managers to certain decisions on export pricing and the roles of different contingency factors in the process are unclear. Therefore, this research develops a theoretical framework to outline the weightiest contingency factors considered by decision-makers and get deeper understanding on the process of developing and adapting export pricing strategies. In addition, the focus is on industrial business-to-business (B2B) trade that has its specificities compared to the business-to-customer (B2C) context while being characterized by more rational trade participants and more complex processes. The empirical data collected in the semi-structured interviews indicate that the most influential factors affecting decisions on export price adaptation in the context of B2B industrial trade are related to competition, market characteristics, product and distribution, together with company goals. Moreover, customer and its situation revealed to play a significant role in the process, which is in line with the theoretical background for the B2B trade pricing, but not considered in the contingency theory. Finally, the heuristic model of the process of making export pricing decisions in B2B industrial trade is proposed to provide industrial managers with indicative guidelines about how to approach export pricing.