Question

Why has dumping become such a key issue/problem in recent years? How can Marketers attempt to fix this problem?

minimum 300 words

Answer 1

Dumping is the practice using which a company exports its products to another country at a price, fairly lower than the price which is prevailing in that country’s market. This practice helps the organization to beat local competition in the host country and facilitate its market hold in that market. This is basically a practice of price discrimination to favor the business strategy of the company.

In recent years, the tendency of dumping has witnessed an upsurge. This is so because the global economy is evolving and full of opportunities. Companies want to grab these opportunities and develop a competitive advantage and substantive visibility of the company in the global market. Hence to gain easy access of the new market, companies resort to the practice of global dumping.

The practice of dumping can prove to be quite detrimental for the local trade of the host country. Hence government of such countries come up with various antidumping laws and statutes as well as watchdog organizations to keep the practice of dumping in check. WTO is the world organization which acts as a watchdog for the practice of global dumping. GATT has been given the power to observe the scope of dumping and keep a check if it is proving to be a constraint for the trade of the member nations. In such a scenario, GATT has the power to limit the scope of the company or country causing dumping.

Some other measures adopted by companies to keep the practice of dumping in check:

· Governments levy duties and taxes to keep the extreme dumping scenarios in check

· Various countries give subsidies to the local companies to facilitate the local trade

· Anti-dumping duties get implemented in the country’s trade so as to keep dumping practices in continuous vigil

· WTO has come up with various global trade rules so that any practice of dumping can be kept in check