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

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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:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

7)Incountrieswherelargesharesofthepopulationaremovingintomiddle-incomeclasses,penetrationpricingwilldepressmarketgrowth.

Answer:FALSE

Explanation:Incountrymarketsexperiencingrapidandsustainedeconomicgrowth,andwherelargesharesofthepopulationaremovingintomiddle-incomeclasses,penetrationpricingmaybeusedtostimulatemarketgrowthevenwithminimumcompetition.Penetrationpricingmaybeamoreprofitablestrategythanskimmingifitmaximizesrevenuesasabaseforfightingthecompetitionthatissuretocome.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

8)Deflationresultsinever-decreasingprices,creatingapositiveresultforconsumers,butputtingpressureoneveryoneinthesupplychaintolowercosts.

Answer:TRUE

Explanation:Deflationresultsinever-decreasingprices,creatingapositiveresultforconsumers,butbothputpressuretolowercostsoneveryoneinthesupplychain.Inadeflationarymarket,itisessentialforacompanytokeeppriceslowandraisebrandvaluetowinthetrustofconsumers.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

9)Withdeflation,consumersfaceever-risingpricesthateventuallyexcludemanyofthemfromthemarket.

Answer:FALSE

Explanation:Deflationresultsinever-decreasingprices,creatingapositiveresultforconsumers,butputtingpressuretolowercostsoneveryoneinthesupplychain.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

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

Answer:TRUE

Explanation:TheweakerU.S.dollar,comparedwithmostoftheworld'sstrongercurrencies,thatexistedinmid-2003stimulatedexportsfromtheUnitedStates.Consequently,whenthedollarstrengthens,U.S.exportswillsoften.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

11)Priceescalationcouldleadtothesalesofexportedgoodsbeingconfinedtoalimitedsegmentofwealthy,price-insensitivecustomers.

Answer:TRUE

Explanation:Unlesssomeofthecoststhatcreatepriceescalationcanbereduced,themarketerisfacedwithapricethatmayconfinesalestoalimitedsegmentofwealthy,price-insensitivecustomers.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

12)Theinternationalmarketermustrelyonexperienceandmarketingresearchtodeterminemiddlemancostsbecausenoconvenientsourceofdataonmiddlemancostsisavailable.

Answer:TRUE

Explanation:Theinternationalmarketermustrelyonexperienceandmarketingresearchtoascertainmiddlemancostsbecausenoconvenientsourceofdataonmiddlemancostsisavailable.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

13)Eliminatingcostlyfunctionalfeaturesofaproductorloweringoverallproductqualitycanreducepriceescalation.

Answer:TRUE

Explanation:Eliminatingcostlyfunctionalfeaturesorevenloweringoverallproductqualityisamethodofminimizingpriceescalation.Forexample,thequalityandadditionalfeaturesrequiredforthemoredevelopedhomemarketmaynotbenecessaryincountriesthathavenotattainedthesamelevelofdevelopmentorconsumerdemand.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

14)Longerchannelsofdistributionaremoreusefulforkeepingpricesundercontrolthanshorterchannelsofdistribution.

Answer:FALSE

Explanation:Shorterchannelscanhelpkeeppricesundercontrol.Designingachannelthathasfewermiddlemenmaylowerdistributioncostsbyreducingoreliminatingmiddlemanmarkups.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

15)Involvingfewermiddlemenindistributionmeanshigheroveralltaxes.

Answer:FALSE

Explanation:Besideseliminatingmarkups,fewermiddlemenmaymeanloweroveralltaxes.Somecountrieslevyavalue-addedtaxongoodsastheypassthroughchannels.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

16)Inafreetradezone,paymentofimportdutiesispostponeduntiltheproductleavesthefreetradezoneandentersthecountry.

Answer:TRUE

Explanation:InafreeportorFTZ,paymentofimportdutiesispostponeduntiltheproductleavestheFTZareaandentersthecountry.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

17)Forcountervailingdutiestobeinvoked,itmustbeshownthatpricesarehigherintheimportingcountrythanintheexportingcountry.

Answer:FALSE

Explanation:Forcountervailingdutiestobeinvoked,itmustbeshownthatpricesarelowerintheimportingcountrythanintheexportingcountryandthatproducersintheimportingcountryarebeingdirectlyharmedbythedumping.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

18)Gerardwasconcernedthathewouldnotbeabletogetmaintenanceandservicingonequipmentusedinhisoverseasoperation.LeasingtheequipmentwouldbethebestoptionforGerard.

Answer:TRUE

Explanation:Leasinghelpsguaranteebettermaintenanceandserviceonoverseasequipment.

Difficulty:2Medium

Topic:RequirementsofaGloballyDispersedProductionSystem

LearningObjective:18-03Priceescalationandhowtominimizeitseffect.

Bloom's:Apply

AACSB:KnowledgeApplication

Accessibility:KeyboardNavigation

19)Countertradingdoesnotbenefitcountriesthatfaceashortageofhardcurrencieswithwhichtotrade.

Answer:FALSE

Explanation:Corporatedebtstosuppliers,paymentsandservices,eventaxes—allhaveanoncashcomponentorareentirelybartered.Manycountriesconstantlyfaceashortageofhardcurrencieswithwhichtotradeandthusresorttocountertradeswhenpossible.

Difficulty:1Easy

Topic:Countertrade

LearningObjective:18-04Countertradinganditsplaceininternationalmarketingpractices.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

20)Barterhouseshelpcountriesnegotiatepricesforimportsandexportsandalsoprovidefacilitiesforcashpaymentsandreceipts.

Answer:FALSE

Explanation:Barterhousesspecializeintradinggoodsacquiredthroughbarterarrangementsandaretheprimaryoutsidesourceofaidforcompaniesbesetbytheuncertaintyofacountertrade.

Difficulty:1Easy

Topic:Countertrade

LearningObjective:18-04Countertradinganditsplaceininternationalmarketingpractices.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

21)Administeredpricingisanattempttoestablishpricesforanentiremarket.

Answer:TRUE

Explanation:Administeredpricingisanattempttoestablishpricesforanentiremarket.Suchpricesmaybearrangedthroughthecooperationofcompetitors;throughnational,state,orlocalgovernments;orbyinternationalagreement.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-05Themechanicsofpricequotations.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

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

Answer:TRUE

Explanation:Acartelexistswhenvariouscompaniesproducingsimilarproductsorservicesworktogethertocontrolmarketsforthetypesofgoodsandservicestheyproduce.

Difficulty:2Medium

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-05Themechanicsofpricequotations.

Bloom's:Apply

AACSB:KnowledgeApplication

Accessibility:KeyboardNavigation

23)Cartelshavetheabilitytomaintaincontrolofmarketsforindefiniteperiods.

Answer:FALSE

Explanation:Oneimportantaspectofcartelsistheirinabilitytomaintaincontrolofmarketsforindefiniteperiods.Greedbycartelmembersandotherproblemsgenerallyweakenthecontrolofthecartel.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-05Themechanicsofpricequotations.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

24)DomesticcartelizationislegalintheUnitedStates.

Answer:FALSE

Explanation:Thelegalityofcartelsgloballyatpresentisnotclearlydefined.DomesticcartelizationisillegalintheUnitedStates.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-05Themechanicsofpricequotations.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

25)Lettersofcreditshiftthebuyer'screditrisktothebankissuingtheletterofcredit.

Answer:TRUE

Explanation:Lettersofcreditshiftthebuyer'screditrisktothebankissuingtheletterofcredit.

Difficulty:1Easy

Topic:CurrencyManagementandBusinessStrategyintheGlobalMonetarySystem

LearningObjective:18-06Themechanicsofgettingpaid.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

26)Anirrevocable,confirmedletterofcreditmeansthataU.S.bankacceptsresponsibilitytopaythesellerregardlessofthefinancialsituationofthebuyerorforeignbank.

Answer:TRUE

Explanation:Anirrevocable,confirmedletterofcreditmeansthataU.S.bankacceptsresponsibilitytopayregardlessofthefinancialsituationofthebuyerorforeignbank.Fromtheseller'sviewpoint,thisstepeliminatestheforeignpoliticalriskandreplacesthecommercialriskofthebuyer'sbankwiththatoftheconfirmingbank.

Difficulty:1Easy

Topic:CurrencyManagementandBusinessStrategyintheGlobalMonetarySystem

LearningObjective:18-06Themechanicsofgettingpaid.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

27)Exceptforcashinadvance,lettersofcreditaffordthegreatestdegreeofprotectionfortheseller.

Answer:TRUE

Explanation:Exceptforcashinadvance,lettersofcreditaffordthegreatestdegreeofprotectionfortheseller.

Difficulty:1Easy

Topic:CurrencyManagementandBusinessStrategyintheGlobalMonetarySystem

LearningObjective:18-06Themechanicsofgettingpaid.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

28)Theportionofinternationalbusinesshandledonacash-in-advancebasisisnotlargeandthisistypicallyusedwhencreditisdoubtful.

Answer:TRUE

Explanation:Theportionofinternationalbusinesshandledonacash-in-advancebasisisnotlarge.Cashplacesunpopularburdensonthecustomerandtypicallyisusedwhencreditisdoubtful.

Difficulty:1Easy

Topic:CurrencyManagementandBusinessStrategyintheGlobalMonetarySystem

LearningObjective:18-06Themechanicsofgettingpaid.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

29)Inbillsofexchange,thebuyerassumesalltheriskuntilthepaymentismade.

Answer:FALSE

Explanation:Inlettersofcredit,thecreditofoneormorebanksisinvolved,butwithbillsofexchange(alsoknownasdollardrafts),thesellerassumesallriskuntiltheactualdollarsarereceived.

Difficulty:1Easy

Topic:CurrencyManagementandBusinessStrategyintheGlobalMonetarySystem

LearningObjective:18-06Themechanicsofgettingpaid.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

30)Salesonopenaccountsarerecommendedwhenshippingishazardous.

Answer:FALSE

Explanation:Salesonopenaccountsaregenerallynotrecommendedwhenthepracticeofthetradeistousesomeothermethod,whenspecialmerchandiseisordered,whenshippingishazardous,whenthecountryoftheimporterimposesdifficultexchangerestrictions,orwhenpoliticalunrestrequiresadditionalcaution.

Difficulty:1Easy

Topic:CurrencyManagementandBusinessStrategyintheGlobalMonetarySystem

LearningObjective:18-06Themechanicsofgettingpaid.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

31)Assumingthataninternationalmarketerhasproducedtherightproduct,usedtheproperchannelofdistribution,andpromotedthegoodscorrectly,theeffortwillfailiftheinternationalmarketerfailsto

A)informthehostgovernmentaboutallitsmarketingobjectives.

B)settherightpriceforthegoodsorservices.

C)settheimporttariffforthegoodsorservices.

D)formajointventureinordertoselltheproduct.

E)workonafranchisebasisinthecountry.

Answer:B

Explanation:Evenwhentheinternationalmarketerproducestherightproduct,promotesitcorrectly,andinitiatestheproperchannelofdistribution,theeffortfailsiftheproductisnotproperlypriced.

Difficulty:2Medium

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-01Componentsofpricingascompetitivetoolsininternationalmarketing.

Bloom's:Understand

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

32)Ingeneral,pricedecisionsareviewedintwoways:pricingasastaticelementinabusinessdecision,andpricing

A)thatdependsonfactorsthatareoftenbeyondthecontrolofacompany.

B)asmoreaphenomenonofluckthanplanning.

C)asanactiveinstrumentofaccomplishingmarketingobjectives.

D)thatisdeterminedbylocalsalesmanagers.

E)thatisstaticnomatterthemarket.

Answer:C

Explanation:Ingeneral,pricedecisionsareviewedtwoways:pricingasanactiveinstrumentofaccomplishingmarketingobjectives,orpricingasastaticelementinabusinessdecision.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-01Componentsofpricingascompetitivetoolsininternationalmarketing.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

33)Whatismostlikelytobetrueofacompanythatviewspricesasanactiveinstrumentofaccomplishingmarketingobjectives?

A)Thecompanysetspricestoachievespecificobjectives.

B)Thecompanyfollowsmarketpricestoachievespecificobjectives.

C)Thecompanyexportsonlyexcessinventory.

D)Thecompanyviewsitsexportsalesasaninsignificantsourceofrevenue.

E)Thecompanyplacesalowpriorityonforeignbusiness.

Answer:A

Explanation:Ifpricesareviewedasanactiveinstrument,thecompanysetsprices(ratherthanfollowingmarketprices)toachievespecificobjectives,suchasreturnsonprofitortargetedsalesvolumes.

Difficulty:2Medium

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-01Componentsofpricingascompetitivetoolsininternationalmarketing.

Bloom's:Understand

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

34)Acompanythatviewspricingasastaticelementinabusinessdecisionmostprobably

A)placesahighpriorityonforeignbusiness.

B)setspricestoachievespecificobjectivessuchastargetedreturnonprofit.

C)viewsexportsalesasactivecontributionstosalesvolume.

D)viewsdomesticsalesasaninsignificantsourceofrevenue.

E)placesalowpriorityonforeignbusiness.

Answer:E

Explanation:Thecompanythatfollowspricingasastaticelementprobablyexportsonlyexcessinventory,placesalowpriorityonforeignbusiness,andviewsitsexportsalesaspassivecontributionstosalesvolume.

Difficulty:2Medium

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-01Componentsofpricingascompetitivetoolsininternationalmarketing.

Bloom's:Understand

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

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

A)black-listedimporting

B)indirectimporting

C)circularimporting

D)co-mingledimporting

E)parallelimporting

Answer:E

Explanation:Becauseofthedifferentpricespossibleindifferentcountrymarkets,aproductsoldinonecountrymaybeexportedtoanotherandundercutthepriceschargedinthatcountry,knownasaparallelmarket.AsGiftGrouphasboughtperfumefromtheFrenchcompanyandsolditintheUnitedStatesforalowerpricethanwhattheFrenchcompanysellsitforinordertoundercutthem,itispracticingparallelimporting.

Difficulty:3Hard

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Apply

AACSB:KnowledgeApplication

Accessibility:KeyboardNavigation

36)________distribution,apracticeoftenusedbycompaniestomaintainhighretailmarginstoencourageretailerstomaintaintheexclusive-qualityimageofaproduct,cancreateafavorableconditionforparallelimporting.

A)Exclusive

B)Speculative

C)Intensive

D)Lateral

E)Dual

Answer:A

Explanation:Exclusivedistribution,apracticeoftenusedbycompaniestomaintainhighretailmarginstoencourageretailerstoprovideextraservicetocustomers,tostocklargeassortments,ortomaintaintheexclusive-qualityimageofaproduct,cancreateafavorableconditionforparallelimporting.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

37)Firmsthatareunfamiliarwithoverseasmarketingandfirmsthatproduceindustrialgoodsorienttheirpricingsolelyonthebasisof

A)culturaldifferencesinperceptionsofpricing.

B)marketsegmentationfrommarkettomarket.

C)thecostsofproductionofthegoods.

D)marketsegmentationfromcountrytocountry.

E)competitivepricinginthemarket.

Answer:C

Explanation:Firmsunfamiliarwithoverseasmarketingandfirmsproducingindustrialgoodsorienttheirpricingsolelyonacostbasis.Firmsthatemploypricingaspartofthestrategicmix,however,areawareofsuchalternativesasmarketsegmentationfromcountrytocountryormarkettomarket,competitivepricinginthemarketplace,priceforstabilityofoperations,andothermarket-orientedpricingfactors,includingculturaldifferencesinperceptionsofpricing.

Difficulty:2Medium

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Understand

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

38)In________pricing,afirmisconcernedonlywiththemarginalorincrementalcostofproducinggoodstobesoldinoverseasmarkets.

A)full-cost

B)fixed-cost

C)variable-cost

D)demand-based

E)premium

Answer:C

Explanation:Invariable-costpricing,afirmisconcernedonlywiththemarginalorincrementalcostofproducinggoodstobesoldinoverseasmarkets.

Difficulty:1Easy

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Remember

AACSB:AnalyticalThinking

Accessibility:KeyboardNavigation

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

Answer:C

Explanation:Invariable-costpricing,thefirmisconcernedonlywiththemarginalorincrementalcostofproducinggoodstobesoldinoverseasmarkets.Suchfirmsregardforeignsalesasbonussalesandassumethatanyreturnovertheirvariablecostmakesacontributiontonetprofit.Variable-costpricingisapracticalapproachtopricingwhenacompanyhashighfixedcostsandunusedproductioncapacity.Anycontributiontofixedcostaftervariablecostsarecoveredisprofittothecompany.

Difficulty:2Medium

Topic:ElementsThatInfluenceInternationalPricingStrategies

LearningObjective:18-02Howtocontrolpricinginparallelimportorgraymarkets.

Bloom's:Apply

AACSB:KnowledgeApplication

Accessibility:KeyboardNaviga