Global Marketing PricingDecisions
PolyPrin Clothing Inc. is a manufacturer of women’s fashion clothing out of San Diego, California. The company has been in business for five years operating a plant
capable of producing 4 million items per annum. PolyPrin’s fashion lines are a series of casual yet elegant light dresses designed with the tropical spirit in mind.
The name of the company is derived from the influence of Pacific culture, and positioned for young to middle aged women seeking an exotic image.
At present PolyPrinproduces and sells 3 million dresses a year. It distributes its products through its own retail outlets and to some specialty stores across the US
west coast. Details of the company’s 2014 financial statement are as follows:
All items expressed in $millions
Revenue – 90
Labour – 12
Materials – 22
Energy – 6
Plant Overhead – 3
Total Operating Costs– 43
SG&A Costs – 14
Profit Before Tax –33
Tax – 10
NET PROFIT – 23
After years of success in the west coast of the USA, PolyPrin has decided to export its fashions to Australia in 2014. The company believes the culture of Australia
is similar to that of California, and so should be successful. As well, Polyprin also feels its products are well suited across a variety of global cultures. As a
result, Australia’s increasingly multicultural society, as well as its similar business practices with the USA, makes the company believe it is an ideal overseas
market to enter.It is eventually looking to take its products into neighbouring emerging nations.
Moreover, the company believes Australia as a nation promises good economic prospects, especially in lieu of the growing importance of its commodity exports to nearby
emerging Asian nations. The rising demand for commodities has increased the value of its currency, the Australian dollar, from as low as $US0.60 in late 2008 to
$US1.03 at present.In the last couple of year, monetary policy has been relatively tight and interest rates are double those in the US at nearly 4%. This is in
response to strong economic activity, due to surging commodity exports, that has pushed up the inflation rate in Australia.