Essay Questions

This document contains essay questions on two different views of price decision and price escalation. It discusses the internal and external factors that constitute price decision, such as organisational factors, marketing mix strategy, product differentiation, cost of products, and company objectives. It also explores the concept of price escalation and the factors that contribute to higher prices in foreign markets. The document includes references for further reading.

Essay Questions
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TABLE OF CONTENT
ESSAY.............................................................................................................................................3
1 Two different view of constitute price decision.......................................................................3
2 Price Escalation........................................................................................................................3
REFERENCES................................................................................................................................5
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ESSAY
1 Two different view of constitute price decision
There are various internal and external factors that constitute price decision in the market
such as organisational factors, marketing mix strategy, product differentiation, cost of products
an company objectives. But as per view of some of the people various external factors helps in
setting price such as demand, economic condition, government intervention, supplier and
competition level within particular industry. Top management of organisation decide price of
products on basis of quality of products and its target segments so that it can earn maximum
amount of profitability (Shirai, 2018). Marketing mix strategy of firm also helps in setting
specific price such as if particular firm is manufacturing qualitative products than it will plan to
charge high pricing from customers. Another factor that constitute price is cost involved in
manufacturing of particular products and services. Organisation objective is another internal
factor that helps in deciding price of products as firm may have different objective such as to
offer valuable products or generate maximum sales by reducing price of products (). Another
factor that set price is Demand of product in particular market such as If demand of products is
high cost of products automatically increases. Competition level also constitute price decision
such as if competition is high than other company will sell products at similar rates or less than
to gain competitive advantages. Price decision also depends upon supplies of input or raw
material within particular economic for examples supply is more than price of products will be
low. Economic condition such as inflation, deflation and number of buyers within particular
market segment also helps in determining price of various products and services.
2 Price Escalation
Price escalation refers to disparity in price of product and services in domestic as well as
foreign country such as higher cost of products in foreign market as compared to domestic
market. Higher price of products in foreign market is due to various factors such as extra cost
include in transportation of products and services for examples exporting cost and transportation.
In other term it can be explained as sum or aggregate of cost factors in distribution channel of
products and services that lead to increase in cost of products in foreign market as compared to
domestic market condition (Noone and Robson, 2016). Sometime government of various
countries impose high tariff and tax in order to protect local supplier of particular company thus
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such international trade barrier lead to increase in cost of products and services in foreign
market. Another definition of price escalation can be stated that when an agreement is made such
that change in price of input products lead to renegotiated and increase price of contract. Such
cost increase prices of products in foreign market and burden on last customer thus might impact
on sales and profitability of organisation (Liu and et.al., 2019). Therefore it can be stated that
price escalation refers to additional charges that are incurred while transferring goods and
services from one country to another such as shipping charges, tariff, and high impose duties and
distribution channel.
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REFERENCES
Journals and Books
Liu, G. and et.al., 2019. Coordination and Decision of Supply Chain Under: Price-Dependent
Demand and Customer Balking Behavior. International Journal of Information Systems
and Supply Chain Management (IJISSCM), 12(3). pp.21-46.
Noone, B.M. and Robson, S.K., 2016. Understanding consumers’ inferences from price and
nonprice information in the online lodging purchase decision. Service Science, 8(2).
pp.108-123.
Shirai, M., 2018. Consumer Perceptions of Price Reframing in an In-Store Decision
Context. Journal of Finance and Economics, 7(1). pp.20-29.
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