A Model of the Influence of Marketing Objectives on Pricing Strategies in International Countertrade

Abstract

As international markets become increasingly more competitive, firms must employ innovative marketing strategies merely to survive. One such strategy is the use of international countertrade. Offering to countertrade or responding to countertrade offers not only can enable a firm to survive, but also can provide the firm with the opportunity to achieve its marketing objective. Because countertrading involves complex exchanges of widely disparate products with debatable values, the pricing strategy employed is an important factor. The authors develop and empirically test a model of the influence of marketing objectives on buyers’ price expectations and sellers’ pricing strategies in international countertrade. Qualitative interviews provide insight into the world of countertrading and assist the articulation of the model and research methodology. A mail survey involving 108 countertrade practitioners from 23 countries offers support for 22 of the 24 hypotheses. The authors develop implications for policymakers and managers.