国际市场营销学 （原书第18版）测试题及答案 Chapter 18 Pricing for International Markets

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InternationalMarketing,18e(Cateora)

Chapter18PricingforInternationalMarkets

1)Settingtherightpriceforaproductcanbethekeytosuccessorfailureininternationalmarkets.

2)Companiesthatusepricingtoachievemarketingobjectivesusepricingasastaticelement.

3)Aproductsoldinonecountrymaybeexportedtoanotherandundercutthepriceschargedinthatcountry.

4)Thepossibilityofaparallelmarketoccurswhenpricedifferencesarelessthanthecostoftransportationbetweentwomarkets.

5)Torestrictthegraymarket,companiesmustestablishandmonitorcontrolsthateffectivelypolicesaleschannels.

6)Companiesshouldusethefull-costpricingapproachwhenithashighfixedcostsrelativetoitsvariablecosts.

7)Incountrieswherelargesharesofthepopulationaremovingintomiddle-incomeclasses,penetrationpricingwilldepressmarketgrowth.

8)Deflationresultsinever-decreasingprices,creatingapositiveresultforconsumers,butputtingpressureoneveryoneinthesupplychaintolowercosts.

9)Withdeflation,consumersfaceever-risingpricesthateventuallyexcludemanyofthemfromthemarket.

10)WhentheU.S.dollarstrengthens,U.S.exportswilldecrease.

11)Priceescalationcouldleadtothesalesofexportedgoodsbeingconfinedtoalimitedsegmentofwealthy,price-insensitivecustomers.

12)Theinternationalmarketermustrelyonexperienceandmarketingresearchtodeterminemiddlemancostsbecausenoconvenientsourceofdataonmiddlemancostsisavailable.

13)Eliminatingcostlyfunctionalfeaturesofaproductorloweringoverallproductqualitycanreducepriceescalation.

14)Longerchannelsofdistributionaremoreusefulforkeepingpricesundercontrolthanshorterchannelsofdistribution.

15)Involvingfewermiddlemenindistributionmeanshigheroveralltaxes.

16)Inafreetradezone,paymentofimportdutiesispostponeduntiltheproductleavesthefreetradezoneandentersthecountry.

17)Forcountervailingdutiestobeinvoked,itmustbeshownthatpricesarehigherintheimportingcountrythanintheexportingcountry.

18)Gerardwasconcernedthathewouldnotbeabletogetmaintenanceandservicingonequipmentusedinhisoverseasoperation.LeasingtheequipmentwouldbethebestoptionforGerard.

19)Countertradingdoesnotbenefitcountriesthatfaceashortageofhardcurrencieswithwhichtotrade.

20)Barterhouseshelpcountriesnegotiatepricesforimportsandexportsandalsoprovidefacilitiesforcashpaymentsandreceipts.

21)Administeredpricingisanattempttoestablishpricesforanentiremarket.

22)Paul'soildeliverycompanywasstrugglingtomakeendsmeet,soitconspiredwiththeotheroildeliverycompaniesintheareatosetprices,allocatemarketterritories,andredistributeprofits.Bycontrollingthemarketinthisway,thecompaniescreatedacartel.

23)Cartelshavetheabilitytomaintaincontrolofmarketsforindefiniteperiods.

24)DomesticcartelizationislegalintheUnitedStates.

25)Lettersofcreditshiftthebuyer'screditrisktothebankissuingtheletterofcredit.

26)Anirrevocable,confirmedletterofcreditmeansthataU.S.bankacceptsresponsibilitytopaythesellerregardlessofthefinancialsituationofthebuyerorforeignbank.

27)Exceptforcashinadvance,lettersofcreditaffordthegreatestdegreeofprotectionfortheseller.

28)Theportionofinternationalbusinesshandledonacash-in-advancebasisisnotlargeandthisistypicallyusedwhencreditisdoubtful.

29)Inbillsofexchange,thebuyerassumesalltheriskuntilthepaymentismade.

30)Salesonopenaccountsarerecommendedwhenshippingishazardous.

31)Assumingthataninternationalmarketerhasproducedtherightproduct,usedtheproperchannelofdistribution,andpromotedthegoodscorrectly,theeffortwillfailiftheinternationalmarketerfailsto

A)informthehostgovernmentaboutallitsmarketingobjectives.

B)settherightpriceforthegoodsorservices.

C)settheimporttariffforthegoodsorservices.

D)formajointventureinordertoselltheproduct.

E)workonafranchisebasisinthecountry.

32)Ingeneral,pricedecisionsareviewedintwoways:pricingasastaticelementinabusinessdecision,andpricing

A)thatdependsonfactorsthatareoftenbeyondthecontrolofacompany.

B)asmoreaphenomenonofluckthanplanning.

C)asanactiveinstrumentofaccomplishingmarketingobjectives.

D)thatisdeterminedbylocalsalesmanagers.

E)thatisstaticnomatterthemarket.

33)Whatismostlikelytobetrueofacompanythatviewspricesasanactiveinstrumentofaccomplishingmarketingobjectives?

A)Thecompanysetspricestoachievespecificobjectives.

B)Thecompanyfollowsmarketpricestoachievespecificobjectives.

C)Thecompanyexportsonlyexcessinventory.

D)Thecompanyviewsitsexportsalesasaninsignificantsourceofrevenue.

E)Thecompanyplacesalowpriorityonforeignbusiness.

34)Acompanythatviewspricingasastaticelementinabusinessdecisionmostprobably

A)placesahighpriorityonforeignbusiness.

B)setspricestoachievespecificobjectivessuchastargetedreturnonprofit.

C)viewsexportsalesasactivecontributionstosalesvolume.

D)viewsdomesticsalesasaninsignificantsourceofrevenue.

E)placesalowpriorityonforeignbusiness.

35)GiftGroupInc.,animportingorganizationinNewYork,buysperfumefromacompanyinFrancefor$13aunit.UnknowntotheFrenchcompany,GiftGroupsellsthisproductintheUnitedStatesfor$19aunit.ThisleadstoalossofrevenuefortheFrenchcompanyasitalsosellsitsperfumeintheUnitedStatesbutforahigherpriceof$22.Whatconceptdoesthisdemonstrate??

A)black-listedimporting

B)indirectimporting

C)circularimporting

D)co-mingledimporting

E)parallelimporting

36)________distribution,apracticeoftenusedbycompaniestomaintainhighretailmarginstoencourageretailerstomaintaintheexclusive-qualityimageofaproduct,cancreateafavorableconditionforparallelimporting.

A)Exclusive

B)Speculative

C)Intensive

D)Lateral

E)Dual

37)Firmsthatareunfamiliarwithoverseasmarketingandfirmsthatproduceindustrialgoodsorienttheirpricingsolelyonthebasisof

A)culturaldifferencesinperceptionsofpricing.

B)marketsegmentationfrommarkettomarket.

C)thecostsofproductionofthegoods.

D)marketsegmentationfromcountrytocountry.

E)competitivepricinginthemarket.

38)In________pricing,afirmisconcernedonlywiththemarginalorincrementalcostofproducinggoodstobesoldinoverseasmarkets.

A)full-cost

B)fixed-cost

C)variable-cost

D)demand-based

E)premium

39)Marianne'sChocolatessellwellintheU.S.atapriceof$24perpound,andshehasoverproducedonekindofchocolatebar.MariannehasdecidedtoseeifshecanselltheminMexico,soshesetsapricethatisjustoverhercost.Shefiguresifshemakesevenalittlemoney,itwouldbeworthit.Marianneisusing________pricing.

A)full-cost

B)fixed-cost

C)variable-cost

D)demand-based

E)premium

40)Whatcharacterizesthevariable-costpricingapproach?

A)Pricesareoftensetonacost-plusbasis,thatis,totalcostsplusaprofitmargin.

B)Nounitofasimilarproductisdifferentfromanyotherunitintermsofcost.

C)Eachunitmustbearitsfullshareofthetotalfixedandvariablecost.

D)Thisapproachissuitablewhenacompanyhashighvariablecostsrelativetoitsfixedcosts.

E)Anycontributiontofixedcostaftervariablecostsarecoveredisprofittothecompany.

41)________pricingisapracticalapproachtousewhenacompanyhashighfixedcostsandunusedproductioncapacity.

A)Full-cost

B)Cost-plus

C)Marginal-cost

D)Demand-based

E)Premium

42)Companiesthatuse________pricinginsistthatnounitofasimilarproductisdifferentfromanyotherunitintermsofcostandthateachunitmustbearitsfullshareofthetotalfixedandvariablecost.

A)full-cost

B)fixed-cost

C)variable-cost

D)demand-based

E)premium

43)Whichapproachtopricingismostsuitablewhenacompanyhashighvariablecostsrelativetoitsfixedcosts?

A)full-costpricing

B)marginal-costpricing

C)static-costpricing

D)demand-basedpricing

E)premiumpricing

44)Acompanyuses________whentheobjectiveistoreachasegmentofthemarketthatisrelativelypriceinsensitiveandthuswillingtopayapremiumpriceforthevaluereceived.

A)penetrationpricing

B)everydaylowpricing

C)predatorypricing

D)priceskimming

E)psychologicalpricing

45)Ifthesupplyofaproductinamarketislimited,acompanymayfollowa________approachtomaximizerevenueandtomatchdemandtosupply.

A)penetration

B)psychologicalpricing

C)variable-costpricing

D)predatorypricing

E)priceskimming

46)A________policyisusedtostimulatemarketandsalesgrowthbydeliberatelyofferingproductsatlowprices.

A)penetrationpricing

B)variable-costpricing

C)premiumpricing

D)priceskimming

E)full-costpricing

47)Cosmeticon,aU.S.-basedfirm,hasrecentlystartedexportingcosmeticstoIndia.Cosmeticonhasintroducedanewrangeofmineral-basedmakeupproductsforthefirsttimeintheIndianmarket.AsCosmeticonhasnocompetitorsinthissegmentoftheIndiancosmeticsmarket,ithassetaveryhighpriceforitsproductsinordertoreachthepremium,priceinsensitivesegmentofthemarket.Thisisanexampleof

A)penetrationpricingpolicy.

B)psychologicalpricingpolicy.

C)bundling.

D)priceskimming.

E)cost-basedpricingpolicy.

48)Inmostcases,thereasonproductscostrelativelylittleinonecountryandcostmoreinanotheristhe

A)profiteeringmeasurestakenbyexportingcompanies.

B)consistencyinperceptionofqualityinallcountries.

C)inelasticdemandofmostconsumergoods.

D)requirementthatallexportgoodsmustusesetskimmedprice.

E)highercostsofexporting.

49)Whatresultsfromtheaddedcostsincurredasaresultofexportingproductsfromonecountrytoanother?

A)pricedeflation

B)penetrationpricing

C)priceescalation

D)pricegouging

E)predatorypricing

50)A(n)________dutyisaflatchargeperphysicalunitimported.

A)advalorem

B)compound

C)prohibitive

D)alternative

E)specific

51)________dutiesareleviedasapercentageofthevalueofthegoodsimported.

A)Specific

B)Protective

C)Prohibitive

D)Advalorem

E)Compound

52)Whatprimarydiscriminatorytaxmustbetakenintoaccountinforeigncompetition?

A)transfertaxes

B)tariffs

C)tolls

D)excisetaxes

E)inflationtaxes

53)Inadeflationarymarket,inordertowinthetrustofconsumers,itisessentialforacompanyto

A)engageinforfaitingagreementswithconsumers.

B)spendmoreonadvertisingandstalltheproductionofproducts.

C)allowpricestoescalateandtargetthepriceinsensitivesegmentofthemarket.

D)keeppriceslowandraisebrandvalue.

E)formacarteltocontrolthedynamicsofthemarket.

54)Whenthevalueofthedollarisweakrelativetothebuyer'scurrency,sellersusuallyuse________pricing.

A)competition-based

B)demand-based

C)premium

D)psychological

E)cost-plus

55)WhentheIndianrupeedepreciatedagainsttheU.S.dollar,PCmanufacturerswhoweredependentonimportedcomponentshadtoeitherabsorbtheincreasedcostor

A)raisethequantityofinputstheyusedinproduction.

B)givediscountstotheircustomers.

C)increasethewagesthattheypaidtolabor.

D)increasetheproductionofPCs.

E)raisethepriceofPCs.

56)WhenacompanyexportsaproductfromtheUnitedStatestoanothercountry,thecompanyismostlikelytobeunabletodeterminetheultimatepriceofaproductif

A)thechannelsofdistributionareshort.

B)thenumberofmiddlemeninitsdistributionchannelsislow.

C)largeordersareplacedbyretailers.

D)marketinganddistributionchannelinfrastructuresarewelldeveloped.

E)themiddlemanmarkupsarenotstandardized.

57)Whatisthemostprobablereasonamanufacturerwouldchoosetoconductitsmanufacturingoperationsinathirdcountry?

A)tostandardizemiddlemenmargins

B)toreducethecreditriskoftheseller

C)toincreasethecapital–laborratio

D)toavoidantidumpingduties

E)toreducemanufacturingcosts

58)Lowerpricestothebuyermayalsomeanlowertariffs,becausemosttariffsareleviedona(n)________basis.

A)specific

B)alternative

C)accrual

D)shorter,lower

E)advalorem

59)Thecreationofafreetradezonemayleadto

A)adeclineinexports.

B)anincreaseintaxesanddutiesleviedonaproduct.

C)areductioninthepriceescalation.

D)adeclineinimports.

E)anincreaseinlaborcostsandoverheads.

60)Byshippingunassembledgoodstoafreetradezone(FTZ)inanimportingcountry,amarketercantypicallylowercostsbecause

A)laborcostsarehigherintheimportingcountry.

B)thefinalpricesofthegoodsareadjustedforinflation.

C)useofunassembledgoodsgivesthemarketerimmunityfromdumpingpenalties.

D)dutiesaretypicallyassessedatlowerratesforunassembledgoods.

E)localcontentusedinproductionislow.

61)Amarketermayfacelowercostsbyshippingunassembledgoodstoafreetradezone(FTZ)inanimportingcountrybecause

A)locallyproducedcomponentsmaynotbeusedinproduction.

B)laborcostsmaybelowerintheimportingcountry.

C)FTZslevyhighertaxesandsurchargesonimportedgoods.

D)oceantransportationratesmaynotbeaffectedbytheweightandvolumeofthecomponents.

E)dutiesmaybeassessedatahigherrateforunassembledgoods.

62)Thecostsofproductionmaybeloweredifafirmshipsunassembledgoodstoafreetradezone(FTZ)inanimportingcountrybecause

A)wagesandotheroverheadsmaybehigherinanFTZ.

B)locallyproducedcomponentsdonotqualifyfortariffs.

C)unassembledgoodsmayqualifyforlowerfreightrates.

D)thefinishedgoodscannotbeexportedtoothercountries.

E)goodsimportedinanFTZqualifyforthesameleveloftariffsasotherimportedgoods.

63)Dumpinghasbeendefinedasthesituationinwhichaproductissoldintheinternationalmarket

A)atapricebelowthecostofproduction.

B)onlytothepremium,priceinsensitivesegmentofthemarket.

C)wherethedemandfortheproductislowerthaninthedomesticmarket.

D)atahigherpricethaninthedomesticmarket.

E)atthesamepriceasinthedomesticmarket.

64)Whatisthefunctionofacountervailingduty?

A)balancerevenuesagainstcosts

B)restricttheamountacountrywillimport

C)increaserevenuesfromparallelimports

D)increasetheamountacountrywillexport

E)permittheuseofforeigncurrencywithinthecountry

65)A________,whichrestrictstheamountacountrywillimport,maybeimposedonforeigngoodsbenefitingfromsubsidies,whetherinproduction,export,ortransportation.

A)triggervolume

B)triggerprice

C)minimumaccessvolume

D)marketaccessopportunity

E)substantialcause

66)For________dutiestobeleviedonaproduct,itmustbeshownthatpricesarelowerintheimportingcountrythanintheexportingcountryandthatproducersintheimportingcountryarebeingdirectlyharmedbythedumpingoftheproduct.

A)countertrade

B)domesticprotection

C)countervailing

D)foreignpractice

E)importrestriction

67)Dumpingintheworldmarketsismostlikelytoincreasewhen

A)domesticproductioncapacityislow.

B)demandinthehomecountryislow.

C)demandintheforeigncountryislow.

D)foreignproductioncapacityishigh.

E)costofproductionislow.

68)Assemblyintheimportingcountryisawaycompaniesattempttolowerpricesandavoiddumpingcharges.Theseassemblyplantsareknownas________plants.

A)antidumping

B)screwdriver

C)import-oriented

D)export-oriented

E)automated

69)Animportantsellingtechniquetoalleviatehighpricesandcapitalshortagesforcapitalequipmentisthe________system.

A)leasing

B)antidumping

C)directbuy-back

D)consignment

E)rental

70)Whatwouldbeconsideredanadvantageofleasingequipmentratherthanowningit?

A)Leaserevenuetendstofluctuategreatly.

B)Leasedequipmentrarelybreaksdown.

C)Leasinghelpsguaranteebettermaintenanceonoverseasequipment.

D)Leasingkeepscompaniesfromusingexperimentalequipment.

E)Leasingislessriskythanoutrightsaleofequipment.

71)WhenBurgerBoysanAmericanfast-foodcompany,wantedtomarketitsburgersandfriesinFrance,itwasaskedtoimportFrenchmustardtotheUnitedStatesinreturn.Thisisanexampleof

A)bargaining.

B)countervailingduties.

C)buy-back.

D)countertrade.

E)bribery.

72)Theuseofcountertradeininternationaltrade

A)allowstradewithcountriesshortofhardcurrency.

B)reducesafirm'scompetitiveadvantage.

C)increasesthetaxliabilitiesoftradingfirms.

D)leadstoalossofrevenue.

E)isconsideredunethical.

73)Acrucialproblemconfrontingasellerinacountertradenegotiationisdeterminingthe________forthegoodsofferedaspayment.

A)deliverymethod

B)warranties

C)insurancepremiums

D)potentialdemand

E)thecost

74)Whatdobarterhousesdo?

A)Theyspecializeintradinggoodsacquiredthroughbarterarrangements.

B)TheynegotiatebarterarrangementswithcountriesthataccepttheU.S.currencyasacountertrade.

C)Theyspecializeinbarteringwiththirdcountriesforunusedrawmaterials.

D)TheydirectbarteredgoodstotheWorldTradeOrganizationforitsapproval.

E)TheyreviewdisputesinbarterarrangementsattherequestoftheInternationalCourtofJustice.

75)________aretheprimaryoutsidesourceofaidforcompaniesaffectedbytheuncertaintyofacountertrade.

A)Tradeunions

B)Barterhouses

C)Industryassociations

D)Swapcenters

E)Satellitetowns

76)Whatistrueofpricequotationsforinternationalsale?

A)Pricequotationscanbemadeonlyifitisshownthatpricesarelowerintheimportingcountrythanintheexportingcountry.

B)Pricequotationsmustspecifythecurrencytobeused,credittermsofthetransaction,anddocumentsrequired.

C)Thepricequotationandcontractshoulddefineonlythequantityofgoodsandnotnecessarilythequality.

D)Pricequotationsmustbequotedonlyintermsofelectronictradedollars.

E)Pricequotationsneedtospecifythetransportationchargesbutneednotnecessarilystatewhattypeofdocumentationneedstobeused.

77)Ingeneral,theendgoalofall________activitiesistoreducetheimpactofpricecompetitionoreliminateit.

A)reciprocalpricing

B)administeredpricing

C)freetrade

D)export-orientedtrade

E)priceskimming

78)Whatisanexampleofaprice-fixingarrangementmostdirectlyassociatedwithinternationalmarketing?

A)priceescalation

B)barterhouses

C)lettersofcredit

D)cartels

E)countertrade

79)A________existswhenvariouscompaniesproducingsimilarproductsorservicesworktogethertocontrolmarketsforthetypesofgoodsandservicestheyproduce.

A)cabal

B)monopoly

C)cartel

D)producers'association

E)competitivemarket

80)OPECisanexampleofa________;itcancontrolthepriceofoilbycontrollingthemarket.

A)cabal

B)monopoly

C)cartel

D)producers'association

E)competitivemarket

81)Whatisthetypicalpaymentprocedureforestablishedcustomerswherethegoodsaredeliveredandthecustomerisbilledonanend-of-the-monthbasis.

A)anopenaccount

B)aletterofcredit

C)abillofexchange

D)cashinadvance

E)forfaiting

82)A(n)________meansthatoncethesellerhasacceptedthecredit,thebuyercannotalteritinanywaywithoutpermissionoftheseller.

A)openaccount

B)letterofcredit

C)billoflading

D)billofregression

E)salesagreement

83)A________,whichshiftsthebuyer'screditrisktothebank,isnotaguaranteeofpaymenttotheseller.Rather,paymentistenderedonlyifthesellercompliesexactlywithitsterms.

A)openaccount

B)letterofcredit

C)billoflading

D)billofregression

E)creditagreement

84)With________,thesellerassumesallriskuntiltheactualdollarsarereceived.

A)openaccounts

B)irrevocablelettersofcredit

C)billsofexchange

D)factoringagreements

E)forfaitingcontracts

85)Acompanymanufacturesextremelyspecializedequipmentformedicalimaging.Becauseofitsvalue,whenthecompanyexportsthisequipmentoverseastohospitals,itgenerallyrequires________,whichisanonrefundabledeposit.

A)aletterofcredit

B)adollardraft

C)aforfaitingcontract

D)cashinadvance

E)anopenaccount

86)________leavesellersinapositionwheremostoftheproblemsofinternationalcommercialfinanceworktotheirdisadvantage.

A)Lettersofcredit

B)Dollardrafts

C)Forfaitingcontracts

D)Cashinadvanceagreements

E)Openaccounts

87)Ina(n)________transaction,thesellermakesaone-timearrangementwithabankorotherfinancialinstitutiontotakeoverresponsibilityforcollectingtheaccountreceivable.

A)forfaiting

B)factoring

C)barter

D)cash-in-advancepayment

E)openaccount

88)Salesonopenaccountsare

A)verycommonasamethodofpaymentinforeigntrade.

B)generallyrecommendedwhenspecialmerchandiseisorderedbythebuyer.

C)notgenerallyrecommendedwhenthereispoliticalunrestintheimporter'scountry.

D)recommendedwhenthecountryoftheimporterimposesdifficultexchangerestrictions.

E)lessriskyforthesellerwhenitinvolvesnewbuyers.

89)In________,acompanyhasanongoingrelationshipwithabankthatroutinelybuysitsshort-termaccountsreceivableatadiscount.

A)forfaiting

B)factoring

C)abartertransaction

D)acash-in-advancetransaction

E)anopenaccountstransaction

90)Differentiatethetwowayspricedecisionsareviewed.

91)Describewhathappensinparallelimporting.Whataretheadvantagesanddisadvantagesofthispractice?

92)Whatisthedifferencebetweenvariable-costpricingandfull-costpricing?Whenwouldacompanychooseoneovertheother?

93)Whatarecommonreasonswhypriceescalationoccursininternationalmarketing?

94)Whatisatariff?Whatarethethreebasicwaysinwhichtariffsmaybelevied?

95)Whatisacountertrade?Whataretheadvantagesanddisadvantagesofcountertrading?

96)Makingpricequotationsforinternationalsalesrequiresincludinganumberofelementsthatmaynotberelevantindomesticpricing.Explaintheprocessandwhatmustbeconsidered.

97)Whatisadministeredpricing,andhowdoesitdifferfrompricefixing?Howisitarrangedininternationalmarkets?

98)Discussthemeaningandnatureofcartels.Arethesegroupsbeneficial?Stateanexample.

Whatisthedifferencebetweenforfaitingandfactoring?

InternationalMarketing,18e(Cateora)

Chapter18PricingforInternationalMarkets

1)Settingtherightpriceforaproductcanbethekeytosuccessorfailureininternationalmarkets.

Answer:TRUE

Explanation:Settingtherightpriceforaproductorservicecanbethekeytosuccessorfailureininternationalmarkets.Evenwhentheinternationalmarketerproducestherightproduct,promotesitcorrectly,andinitiatestheproperchannelofdistribution,theeffortfailsiftheproductisnotproperlypriced.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-01Componentsofpricingascompetitivetoolsininternationalmarketing.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

2)Companiesthatusepricingtoachievemarketingobjectivesusepricingasastaticelement.

Answer:FALSE

Explanation:Pricedecisionsareviewedtwoways:pricingasanactiveinstrumentofaccomplishingmarketingobjectives,orpricingasastaticelementinabusinessdecision.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-01Componentsofpricingascompetitivetoolsininternationalmarketing.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

3)Aproductsoldinonecountrymaybeexportedtoanotherandundercutthepriceschargedinthatcountry.

Answer:TRUE

Explanation:Becauseofthedifferentpricespossibleindifferentcountrymarkets,aproductsoldinonecountrymaybeexportedtoanotherandundercutthepriceschargedinthatcountry.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

4)Thepossibilityofaparallelmarketoccurswhenpricedifferencesarelessthanthecostoftransportationbetweentwomarkets.

Answer:FALSE

Explanation:Aparallelmarket(graymarket)existswhenproductsintendedtobesoldinonemarket,exclusivelyataparticularlowprice,aresoldinasecondmarket(usuallyillegally)wheremarketpricesarehigher.Thepossibilityofaparallelmarketoccurswheneverpricedifferencesaregreaterthanthecostoftransportationbetweentwomarkets.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

5)Torestrictthegraymarket,companiesmustestablishandmonitorcontrolsthateffectivelypolicesaleschannels.

Answer:FALSE

Explanation:Companiesthatareseriousaboutrestrictingthegraymarketmustestablishandmonitorcontrolsthateffectivelypolicedistributionchannels.Insomecountriestheymaygethelpfromthecourts.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

6)Companiesshouldusethefull-costpricingapproachwhenithashighfixedcostsrelativetoitsvariablecosts.

Answer:FALSE

Explanation:Companiesfollowingthefull-costpricingphilosophyinsistthatnounitofasimilarproductisdifferentfromanyotherunitintermsofcostandthateachunitmustbearitsfullshareofthetotalfixedandvariablecost.Thisapproachissuitablewhenacompanyhashighvariablecostsrelativetoitsfixedcosts.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02How