Define price escalation in exporting and explain why it occurs.
Chapter 17 Global Marketing
#Daniels #15edition #GlobalMarketing #Chapter17International Business: Environments and Operations, 15e, Global Edition (Daniels et al.)
Daniels, 15edition, Global Marketing, Chapter 17
Answer: Price escalation occurs if standard markups are used within distribution channels and lengthening the channels or adding expenses somewhere within the system further increases the price to the consumer. Price escalation in export sales occurs for two reasons: (1) channels of distribution usually span greater distances because exporters need to contract with organizations that know how to sell in foreign markets and (2) tariffs are an additional cost that may be passed on to consumers.
ReplyDelete