Question

What is the best approach to take when exporting to a deflationary market? Multiple Choice Use promotions to offset the effects of ever-rising prices. Keep prices low and raise brand value. Relate selling price to cost of goods sold and cost of replacing the items. Do not place emphasis on controlling price escalation. Raise prices to dominate the market.

Answer 1

Keep prices low and raise brand value.

Step-by-step explanation:

Deflation is defined as a general decline in prices of goods and services in an economy. So a deflationary market is on in which deflation occurs.

Deflation occurs when inflation falls below zero.

So when exporting to a deflationary market one will need to keep prices low but ensure there is a small margin of profit.

In addition we can raise brand awareness. This will increase sales volume, so the company will enjoy increased profits as a result of increased volume of sales.