Pricing Strategy for Export Activity in Developing Nations

Abstract

This article examines management information techniques deemed useful in planning and implementing a pricing strategy for export activity of manufactured products from developing nations. The existence of alternative accounting principles governing the identification, measurement, and communication of product cost elements requires that a careful examination be made of the different costing methods and their impact on the net inflow of foreign currency and the realization of an adequate rate of return. This study rejects the use of the full-costing method for export pricing in developing nations. Instead, it argues that the use of direct-costing methods combined with the differential-cost approach will help establish a floor price which will lead to profit maximization. The author suggests three areas that require attention for such maximization to occur.