Define international price escalation. Discuss how distribution channel length affects international business transactions
What will be an ideal response?
International price escalation refers to the problem of end-user prices reaching exorbitant levels in the export market caused by multilayered distribution channels, intermediary margins, tariffs, and other international customer costs. International price escalation means the retail price in the export market can be significantly higher than the domestic price, creating a competitive disadvantage for the exporter.
Distribution channel length refers to the number of distributors or other intermediaries that it takes to get the product from the manufacturer to the market. The longer the channel, the more intermediaries the firm must compensate, and the costlier the channel. High channel costs contribute to international price escalation, creating a competitive disadvantage for the firm.
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A) Problem identification research B) Segmentation research C) Problem solving research D) Marketing information systems
Off-price chains typically purchase their merchandise through traditional wholesale channels
Indicate whether the statement is true or false