How can a marketer adjust prices to accommodate exchange-rate fluctuations?
Exchange rate fluctuations refers to how all major currencies nowadays are floating freely relative to one another, and how no one is quite sure of the value of any currency in the future. If exchange rates are not carefully considered in long-term contracts, companies find themselves unwittingly giving 15-20 per cent discounts. Hedging means insuring against a negative currency rate, and is becoming more common as a means of ensuring no discounts are given unwittingly.