Assignment on when it comes to escalation in price, there are a number of causes including increase in exporting costs

Questions and Answers

1# Price Escalation: When it comes to escalation in price, there are a number of causes including increase in exporting costs, administrative costs, tariffs, taxes, inflation, deflation, fluctuations in exchange rate, varying values of currency, and transportation and middlemen costs. These are the most common reasons why there is an increase in the price. In the case of pandemic and rise in the costs of masks, kits, and respirators, there are two causes including increased costs of exportation and increased costs set by manufacturers. The main cause is increased costs set by manufacturers because the current situation is recognised as a business opportunity by manufacturers. Thus, instead of lowering the costs, they are increased to make more profits and gain a competitive position in the market.

            There are two approaches that can be considered for lessening the rise in price. The first approach is lowering the costs of distribution. For instance, the use of middlemen can be eliminated and shorter channels should be used. This will serve to decrease the price. Government-influenced pricing is another approach that can lessen price escalation. For instance, government can set price ceilings to ensure that prices do not exceed a certain limit and they stay affordable. In this manner, price escalation can be reduced.

2# International Marketing: If Mazoon Dairy decides to be international, it is important to determine the way it will enter a specific foreign market along with the degree of commitment and marketing involvement that it will make. There are five phases of international marketing involvement:

No Direct Foreign Marketing: In this phase, active cultivation of consumers is absent outside national boundaries but the products of company might reach foreign markets. Sales might be made to foreign consumers or trading companies, coming directly to the organisation. This phase generates less sales but it also requires little investment.

Infrequent Foreign Marketing: In the second phase, temporary surpluses caused by changes in levels of production or demands might result in infrequent foreign marketing. There is a decline in the foreign sales activity. It results in a significant decline in sales but the same applies to costs incurred.

Regular Foreign Marketing: At this level, the organisation has a permanent productive capacity for the production of products to be marketed on a continuous basis. Additionally, products are adapted for international markets as there is a rise in domestic demand. Profits are also generates from foreign markets. The only drawback is to employ effective strategies in penetrating foreign markets and dealing with regulations.

International Marketing: In this phase, the company fully involved and committed to international activities and foreign markets. Further international expansion is also considered and potential markets are researched. At this point, the firm becomes a multinational or international firm. The firm experiences significant growth in this stage but complexities rise with choosing different modes and strategies for every market.

Global Marketing: At this level, Mazoon Dairy will treat their home market and the whole world as their potential market. Market segmentation is specified by usage patterns, income levels, or other factors that span the world. More than half of its sales and revenues come from foreign markets. By now, the company is established and generates significant revenues. However, it becomes too dependent on foreign markets and does not experience growth or expansion as much.

3# Marketing Research: When it comes to making decisions, information and insights into the market are critical. These insights are provided by marketing research. After all, it is the systematic analysis, recording, and collection of data for providing information in decision making. Following are the stages of research process:

Defining the Problem: The major challenge or difficulty is converting ambiguous business problems into a highly achievable and drawn research objectives. Other difficulties often stem from failures in establishing problem limits that broad enough to involve every relevant element.

Developing the Plan: The second step is concerned with determining how you are going to perform your research. At this stage, the challenge is to choose the appropriate methods of research.

Collecting Data: In the collection of data, a major challenge is the unavailability of data. For instance, most nations do not release governmental reports and commonly, official reports have false data because governments are too optimistic about their statistics. An important challenge in secondary data is to collect reliable data while in primary technique, there are issues such as inadequacies in translation of questionnaire.

Interpreting Information: At this stage, some of the major challenges include lack of cultural understanding, researcher must have talent for adapting research, and possessing a sceptical attitude in the management of secondary and primary data.

Representing Results: When it comes to the representation of results, a significant challenge is to ensure that results are clear and precise, and not ambiguous. Another challenge is that results must align with the research objectives.

Communicating: In the last stage of communicating with decision makers, it is important for information to be delivered to decision makers within the deadline. In addition to it, another challenge is to ensure that all decision makers are capable of understanding the language in which results are presented.

4# Political and Economic Risk Assessments

            For an international marketer, it is critical to conduct both political and economic risk assessments for the home country and host country because these assessments enable the marketer to identify the risks facing him and what type of complexities must be handled to stay competitive or efficient in both of the markets. There are a number of risks that can be faced by a marketer including adverse political conditions and laws, increased inflation, or fluctuating economic stability. These are some risks that can be faced by an international marketer. The identification and mitigation of these risks are considered critical for ensuring success in both local and foreign markets (Coviello, 2010).

            If there is a risk of adverse regulations which put a limit or restriction then it can only be mitigated by either complying with them or holding a meeting with the authority to ensure that a solution can be developed. In case of adverse regulations, international marketers often use local intermediaries so that restrictions are not imposed on them. Meanwhile, in case of economic fluctuations and inflation, such pricing strategies have to be adopted which can enable the marketer to stay competitive regardless of the economic issues. For instance, in times of inflation, penetration pricing strategies can be considered for attracting customers.

5# History and Geography: In general, history helps in defining the mission of nation, how neighbours are perceived by it, and what its position in the world is. Meanwhile, insights into history are critical for the comprehension of current attitudes.

            Temperature extremes, humidity, climatic features, and altitude influence the functions and uses of equipment and products. For instance, products that are efficient in temperate zones might quickly deteriorate or might need special cooling for functioning properly in tropical zones. It was determined by Rolls Royce that carbs require significant renovations and body-work after running in Canada for even a short time. Population trends determine the demand for goods and changes in population significantly influence future demand. The most critical deterrent to control of population is cultural attitudes and perceptions about the significance of large families. It is the trade routes that represent significant attempts in overcoming effects of geography, causing social and economic instability (Fernhaber, Gilbert, & McDougall, 2014).