With the improvements in communications, greater ability to travel and freer trade agreements, we are becoming more of a single world marketplace. And, while this presents new opportunities for businesses both new and old, at the same time it is also forcing major changes in the economic environment. And, these changes are continuously developing, with many not yet even with a clear end.
During the past decade, the Internet has developed into a diverse and wide reaching method of communication. While at the same time, there has been a tremendous growth of production ability in lower-wage countries. And, both of these are large factors in the changes now occurring through-out the world marketplace.
Within the environment of trade, the matter of product pricing is critical for the long term well-being of the various participants in trade - From the producer through to the retailer.
The combination of the availability of products from lower wage countries with the better communications (that allow producers to sell more directly down the supply chain) seems beneficial. As it can give the end-consumers lower prices on the products that they buy.
And, as we have all been seeing, many large companies involved in selling products in their own domestic marketplaces have been closing their own domestic plants, and utilizing the new supply chain. Thus, these companies have been greatly influencing the changes that are occurring.
Also, we are now seeing very ambitious efforts of relatively new companies that are looking to expand within this new environment. Many of these are new businesses that are in the producing countries (either working for the new producers or independently), while there are many trading companies (new and old) growing in the target marketplaces.
And though this new environment is presenting more competitive pricing and opportunities, it has not yet matured. Many businesses, eager to compete with the overall lower prices of goods in the marketplace, do not yet fully understand the responsibilities and risks associated with bringing a product to market, and how to calculate proper pricing to cover those responsibilities and risks.
A good example of this is the recent ambitious efforts of companies in the new producing countries to offer products more directly to dealers and retailers in the consuming countries. And, those dealers and retailers have been equally ambitious in taking advantage of the lower market prices.
Though, what many of these sellers and buyers have not fully understood are the risks and responsibilities that come with successfully bringing a product into a marketplace. Thus, many of the dealer and retail buyers have been unprepared to deal with the logistical problems of getting the products from the producers to the store, and are realizing the difficulties of selling what consumers will see as just a generic product. And, that is because consumers place value on known name brands - known from extensive marketing efforts.
So, the subject of pricing is not only of interest for new businesses, but also for the established businesses that now find themselves selling more directly into new marketplaces, and those that find themselves sourcing from new marketplaces.