Question

Discuss the difficulty in having a standardized price for a company’s products across all countries and areas within a country. Give an example of a company that prices a product differently through a region. ?over 400 words?

Answer 1

The prices of the product are different on the basic of the country economic conditions. When the product or a service is launched in the market it is the market who regulates the price of the product. Although company sets the price for the selling the product but it is the market factors that effects the decision of the company. The standardized price of the product is very good idea if it is within the boundary of the country but if we talk about the global location it may not possible. It varies as the economic conditions of the country are different, the purchasing power parity of the people varies, the needs of the product country to country varies, social acceptance of the product is different, demand for the product in the market. There are many product which price varies such as electronics items, cars prices, Gas price etc.

It's not only these product that vary in price across the globe but also certain product prices which too varies accordingly.

When the price of the product is standardizing then there may be many countries which are developed gets the product in the cheaper cost and also the situation may arise that there may be countries which pays more for the same product. This is because the growth rate or inflation rate of the company are different in various county. The problem may arise that the people go for the substitute product which may be cheaper in the cost in some country that pays more. The standardization also need not be implemented because the resources cost, legal cost, taxation systems, technological usage cost, human resources cost varies countries to country. The standardization would may have impact of the profit margin of the company.

The areas inside the country may be feasible but according to the country geography and the access to the places of the outskirts. Within the country also same situations happened that particular state may have lower income level group who may not interested in the product so standardization may feel difficult to implement in the country or outside the country too.

For example, Ford Motors company car Ford Mustang price varies in various countries. In India the price of Ford Mustang is INR 74.62 Lakhs which is equal to the $ 111,930. If we see the price of Same product in the USA we found that the price is $ 25,680 to $ 55,940. So, this shows that Indian market customers are paying more for the same product. This is due to the difference in the condition of both the country.