One of the most important challenges facing the Jordanian economy, especially in the current and future international conditions, the appearance of international economic blocs and the World Trade Organization, where it has developed strategies that define the means to increase its competitiveness in global markets, which focused on the technical methods for developing products and the quality systems to ensure the protection of the environment in the production process and the international standard specifications, which results in a change in the terms of global trade exchange and reliance on quality and efficiency standards and superiority over the criteria of comparative advantage explaining international trade trends, due to the difference of the product price as a result of the difference in production costs from one country to another.
So the need has increased to rely on the competitive advantage that is comprehensive and dynamic and includes in its meaning the production of the product at a low cost with high quality through the development of production and attention to the efficiency of the marketing performance to reduce the price distortions and meet the requirements of export, which made the Jordanian Sea products sector improve their production processes in terms of quantity and quality To raise their competitiveness.
The Russian market is one of the most important markets for Jordan, especially for the Dead Sea products sector, and the pricing process is one of the most important axes for efficient penetration in the Russian markets.
Pricing is one of the main factors in the marketing mix and it is significant for both Jordanian Dead Sea products producers and the distributors and customers in the Russian markets. Where the customer approves the price if the quality according to his expectation.
In the Russian markets, the retail prices of Dead Sea products could be similar to the Jordanian local prices as the consumer’s needs in both markets are the same because their request is to obtain a value for what they are spending. But it could defer according to the Jordanian Dead Sea products companies’ strategies and objectives.
The pricing of Jordanian Dead Sea products strategies as the following:
1- Russian market prices are lower than the Jordan local market prices, as the product is not well known yet in Russian markets and the effect of competition.
2- Russian markets prices are equal to the Jordan local market prices, for the following reasons:
– To penetrate the Russian markets with the Jordanian Dead Sea Products safely.
– lack of information about competitors.
– lack of expertise in this market.
– Not to be involved in the dumping strategy.
– Aggressive competition in the local market.
– The objectives of the Russian company are different from the Jordanian objectives.
3- Russian markets prices are higher than the Jordan local market prices, because of:
– The expenses in the Russian markets are higher than in Jordan’s local markets.
– To give credit to the buyers in the Russian markets.
– Compensate for the high risks.
4- Differential pricing for the following reasons:
– Different elasticity of demand (increasing the prices would decrease the demand and vice versa).
– Local Market fragmentation and an encouraging profit in the Russian markets
– Different strategies in both markets and to allow a good penetration in the Russian new markets.
– High costs in the Russian market and consumers’ inability to recognize the real costs which lead to profit margins diversification.
Author: D. Tareq Faisal Tamimi