The currency fluctuations in global markets have a big impact on international transactions. What actions can be adapted if the domestic currency is strong?

Question

What will be an ideal response?

Answer 1

Currency fluctuations complicate the task of setting prices. A weakening of the home-country currency swings exchange rates in a favorable direction if the currency in the country of business is strong. An equally opposite effect can happen when the currency is strong. In responding to currency fluctuations, global marketers can utilize other elements of the marketing mix besides price. Other actions that can be taken if the domestic currency is strong are: (1 ) engaging in non-price competition by improving the quality of the products, delivery methods, or after-sale services; (2 ) improving productivity by taking actions that may result in cost reduction; (3 ) if possible, sourcing can be shifted outside the home country; (4 ) giving priority to exports to countries, either temporarily or permanently, with stronger currencies; (5 ) trimming profit margins and using marginal-cost pricing; (6 ) keeping the foreign-earned income in host country as well as slowing down collections; (7 ) maximizing expenditures in the local currency of the host-country; (8 ) buying needed services aboard and paying them in local currencies; and (9 ) billing foreign customers in the domestic currency.