Countering Price Escalation in International Marketing

Countering Price Escalation in International Marketing

According to Cavusgil, Knight & Riesenberger (2012), price escalation is the pricing discrepancy where goods are sold expensively in foreign markets as opposed to the local markets. It can be misleading to an international marketer in that it can make him or she think that the higher prices charged in the foreign markets implies higher profit, and, therefore, him or she may end up running at a loss. This owes to the fact that the higher charges imposed on the foreign goods cater for the high hidden costs.

Castro, Irizarry, Ashuri (2014) attributed shipping costs, longer distribution channels, middlemen, tariffs, warehousing and taxes…