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Internal Determinants International Organizational Structure Cost Structure Way Of Transfer Pricing Decisions On Other Parts Of The Marketing Mix External Determinants Political, Legal And Economical Framework Behaviour And Preferences Of Customers Competitive Structure And Behaviour Exchange Rate Volatility Occurrence Of Gray Markets
Price Escalation
Costs of Exporting: The term relates to situations in which ultimate prices are raised by shipping costs, insurance, packing, tariffs, longer channels of distribution, larger middlemen margins, special taxes, administrative costs, and exchange rate fluctuations. Taxes, Tariffs, and Administrative Costs: These costs results in higher prices, which are generally passed on to the buyer of the product.
Price Escalation
Inflation: Inflation causes consumer prices to escalate and the consumer is faced with rising prices that eventually exclude many consumers from the market Middleman and Transportation Costs: Longer channel length, performance of marketing functions and higher margins may make it necessary to increase prices
Price Escalation
Exchange Rate Fluctuations and Varying Currency Values: Currency values swing vis--vis other currencies on a daily basis, which may make it necessary to increase prices