Ethnocentric pricing
Pros:
It is a simpler pricing process compared to other processes as same price is charged throughout the globe
It can really be beneficial in businesses which are centrally controlled and require less mangerial decisions at lower levels eg: franchise business, company retail outlets etc
It strengthens brand value as people persive that same quality and standard is maintained where ever they buy the product because the price remains same
Cons:
As the price remains same, it gives less room to a company to tackle with competition in price war
Also, different geographies have different tax structure, if selling price is kept same, the reliazed value for the company may vary region to region
Costing may also differ to companies at different geographies, which will again hamper thier gross margins
Polycentric pricing
Pros:
The liberty to decide price by affiliate managers or subsidiaries helps to fight competition effectively
It also helps to decide true value for the product or service as managers get involved deeply in there respective regions
Products or services may become more acceptable to customers as the prices will match their desired value in their region
Cons:
Company may require skilled managers at regional levels to set the appropriate price
It could also lead arbitrage due to price disparity as higher price regions may buy from lower price regions if tax rates gives benefits
It also gives more work to head office to plan out different strategies for different regions as the regional managers manage their markets differently
Geocentric pricing
Pros:
It is the most dynamic approach in international market that is a collabrative approach between centres and regional managers
It helps headquarters to keep their goals aligned with also taking competition into picture
The market strategies also becomes easier as the prices are controlled by head office which also decides the market strategies
Cons:
Head office may not be well adaptive with regional markets deeply which may result in incorrect pricing
Customers may feel repellant to brand as they may percive they are charged wronly compared to their known ones are charged other rates
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