The following information was submitted:
Transactions: INTERNATIONAL JOURNAL of EDUCATION AND INFORMATION TECHNOLOGIES
Transactions ID Number: 19-688
Full Name: Radu Cristian Musetescu
Position: Senior Lecturer
Age: ON
Sex: Male
Address: 41 Mihai Eminescu, Sector 1, Bucharest
Country: ROMANIA
Tel: 004073015356
Tel prefix:
Fax:
E-mail address: radu.musetescu@rei.ase.ro
Other E-mails: radu.musetescu@gmail.com
Title of the Paper: A Strategic Approach to Tax Increases and Dynamic Competitive Positioning: the Reactions of Romanian Firms to Value Added Tax Hike
Authors as they appear in the Paper: Radu Cristian Musetescu, Adina Musetescu
Email addresses of all the authors: radu.musetescu@rei.ase.ro,adinamusetescu@gmail.com
Number of paper pages: 8
Abstract: Taxation has rarely been an issue in the marketing and strategic literature. However, we argue that tax modifications can have a significant impact on the competitive positioning of firms. These firms should have in consequence a strategic approach to their reactions to such external events. From a theoretical perspective, the most significant reaction to an increase in an indirect tax calculated as a percentage of the final price should come from the competitors positioned both at the lowest and at the highest price-to-quality segments of the market. Taking into consideration the pricing reaction of Romanian firms to the 1st of July 2010 increase in Value Added Tax (the biggest V.A.T. hike in Europe), we qualify their reaction as weak. It was not strategic and it was most probably based on the comfort that such an event would not change their competitive positioning. The most affected market segment by such a tax hike, the luxury segment, seems to purely and simpl!
y ignore the potential consequences. Price-sensitive distributors who did react have however used "tax deductions" techniques as a seasonal adjustment to demand.
Keywords: Competitive positioning, Indirect taxation, Pricing strategy, Tobacco excise, VAT increase
EXTENSION of the file: .doc
Special (Invited) Session: Indirect Taxation, Corporate Pricing Strategy and Competitive Positioning: the Reaction of Romanian Firms to Value-Added Tax Increase
Organizer of the Session: 648-197R
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