Costing Vs Pricing

We have been debating over this issue for many years now and "Costing" for Indian Market will have to be defined in a very different way. I remember the first time I travelled to Europe and I was paying all the expenses in Euros, interestingly I used to convert all the expenses in INR and the reach of those products looked out of my pocket, some products were reasonably priced such as footwear, perfumes, accessories, clothing etc. others like beverages, food and many other items were exorbitant. The similar approach has been taken by the international brands in India that they are still pricing it based on their European and American cost models, which in my opinion will not last for too long. Their pricing includes their cost as per European/American value+transportation+import duty+other though they might be manufacturing in India OR SriLanka. The base for pricing is based on their company's expenditure model in their countries. Work out a local office, base the prices realistically and see the conversions, otherwise THEY will have to increase sale period from present 3-4 months to 10 months. All objects OR brands can't be fitting into objects of desire kind of Model. They will have to meet utility pattern and discretionary income as per the geography and customs of people at large.

Today you look at cinema tickets, dinner at five star hotels, luxury shopping, and many other activities and you realise that cost of those activities are based on international pricing that are uniform but not localised. One needs to look at the perceived value of these products, experiences and activities in the domain of cultural context. The costing must consider the perceived value of various products, its utility and function and income increase over past decades in order to have a derive correct pricing. The brands and companies needs to look at this aspect that will derive a true global consumption.