Price Escalation And Why It Can Mislead An International Marketer

Target sells its products from the high end of the market to the low end depending on the type of product in question. In regards to Electronics items where the caption rate is small, they price their items at the high end to ensure they meet their margins. However, in regards to Target’s name brand items, they price those at the low end, keeping the company as a discounted retailer. Target also sells designer items that range from mid to high range of the market. In 2013 Targets CEO Gregg Steinhafel adopted the philosophy “a penny saved is a penny earned”. He further mentioned that they company would be a penny higher in price than their competitors Wal-Mart (Davis, M 2013). Steinhafel stated that “We want to be a penny

The principal microeconomic issue at work is supply and demand. The author invokes a number of economic theorists (both liberal and conservative) who endorse price gouging out of a belief that it is simply the natural manifestation of a capitalist society that relies on supply and demand. There is a belief that preventing price gouging allows consumers to act with little consequence for their actions. According to this line of thinking, a business is well within its rights to raise prices because they should respond to public demand; at other times, there is little demand, so they are wise to take advantage when there is significant demand. Moreover, economic theorists have argued that price-gouging is positive because it makes people question whether the item they are considering purchasing

A large online retailer, like Amazon, can price discriminate to maximise its profits. This pricing policy is used because ‘some customers will value your product or service while others will value it less’ (Smith, 2004). Price discrimination is where a firm sells the same product at different prices to different consumers. My job, as a high powered consultant, is to analyse and discuss the possible benefits and costs of using price discrimination in Amazon.

This paper will provide insight into pricing strategies to reduce price elasticity, the effects of government policy, the importance of government involvement in the market economy. It will further go on to explain the complexity associated with expansion and the creative ways to converge interests of the managers and stockholders.

Companies can choose many ways to set prices, skimming price strategy where a company sets a higher price than normal and a penetrating price where low initial price is set. “Pricing

Pricing is a significant aspect of the value proposition for any purchase. According to the Price Tag Confidential Video by CBC Marketplace, there is a huge amount of difference in the price that consumers pay in Canada as compared with the United States. Different examples were given such as a low dose aspirin costs $13.96 CAD in Canada whereas in the United States the price is $5.96 USD i.e. 132% more. Another example given was that of a transmission safety switch which costs $389.32 CAD in Canada whereas in the United States the price is $203.89 USD i.e. 47% more. The prices of other products such as tires, running shoes, conditioner, printer, etc. were given in the video to illustrate the price gaps between these countries.

Internal factors are establishing prices and marketers ought to take into consideration the importance and significance of a number of factors which is the outcome of the organizations choices, results, and actions. These factors are manageable by the organization and they may be modified, if need be. In spite of this, making a swift transformation is not always the answer or the quick fix. For example, product pricing is determined or influenced by the productivity of an industrial facility. The salesperson realizes that rising productivity can decrease of expense of manufacturing every product and therefore lets the salesperson to possibly reduce the price. External factors are not managed by the organization but then again it will influence the choices of pricing. Being able to better comprehend these factors would entail the marketer conduct research to observe and evaluate everything that is going on in all of the markets that the organization works for because of the influences of these factors can differ within the market (Factors Affecting Pricing Decision, 2016). External forces that can impact the organization are unmanageable because the organization does not manage them however, the organization can still take action and adjust to their occurrences and effects with the organizations manageable blend of components from the organizations internal setting. The unmanageable influences in the external setting are rivalry, governmental policies and plan, natural influences, social and cultural influences, demographic determinants, and changes within technology (Bright,

One problem that trade barriers have caused is that they increase the cost of enterprises, affecting the international competitiveness of enterprises. For a long time, due to the low technological content of Chinese export products, mainly to win international markets at low prices, the developed countries have adopted some ways, such as the green subsidy system, the green packaging system, the green fortress and so on. By imposing import surcharges, increasing the cost of

Costs play an important role in setting international prices. Travelers abroad are often surprised to find that goods that are relatively inexpensive at home may carry outrageously higher price tags in other countries. Besides, such price escalation may result from differences in selling strategies or market conditions. In most instances, however, it is simply a result of the higher costs of selling in foreign markets such as the additional costs of modifying and packaging the product, higher shipping and insurance costs, import tariffs and taxes, costs associated with exchange rate fluctuations and higher channel and physical distribution costs. Futhermore, Milo also adopted Promotional Pricing strategy. Selling products is challenging when shelves are lined with similar-quality products, and customers are bombarded with advertising messages. Promotional pricing helps differentiate Milo’s product with its competitor and leverage a potential customer's attention long enough to purchase the Milo products. Promotional pricing involves lowering the price of a product, distributing coupons or offering specials, such as buy-one-get-one-free offers. For example, Milo offer promotional pricing for its product in weekly catalogue to create excitement and a sense of

The process of globalization has numerous significant effects on countries, organizations, and individuals. These effects can be observed in the quality of products, in their prices, but also in their availability. Because of globalization, numerous companies prefer to expand their business on international level. Some of them outsource some of their processes and activities to cheaper destinations that allow them to reduce their investments.

When marketers talk about what they do as part of their responsibilities for marketing products, the tasks associated with setting price are often not at the top of the list. Marketers are much more likely to discuss their activities related to promotion, product development, market research and other tasks that are viewed as the more interesting and exciting parts of the job.

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).

Another factor that we need to keep in mind is the cultural and economic realities of these marketplaces and consumers while pricing our products. Let us begin with the pricing for the European Union market Spain. This is a rich market which is centered around good quality and ready to spend the money asked for

Price interacts with all other elements of the marketing mix to determine the effectiveness of each and of the whole. The objectives that guide pricing strategy should be a subset of the objectives that guide overall marketing strategy. Thus, it is probably wrong to view price as an independent element of marketing strategy or to assert that price, by itself, is a central element in the marketing mix.” (Webster, 1979)

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).