ch.18

Question 1

international pricing

Answer 1

1- setting and changing prices are key strategic marketing decisions
2- an offering price must reflect the quality and the value consumers percieves

Question 2

pricing objectives?

Answer 2

active element: companies set prices rather than following market prices
static: follow market price

Question 3

Parallel Imports?

Answer 3

whenever price differences are greater than the cost and transportation between two markets as firms have to change different prices from country to country

Question 4

approaches to international pricing/ pricing methods?

Answer 4

1- full cost: insist that no unit of a similar product is different from any other unit in terms of cost.
2- variable cost: concerned only with the marginal cost of producing goods to be sold in overseas markets
3- skimming: premium prices (high prices)
4- penetration: capture market share (low pricing)
5- premium
6- economy

Question 5

price escalation?

Answer 5

the added cost as a result of exporting products from one country to another

Question 6

factors in price escalation?

Answer 6

1- taxes, tariffs, admin costs
2- inflation
3- middlemen: channel length, performance of marketing
4- exchange rate: varying currency values

Question 7

Approaches to Lessening
Price Escalation?

Answer 7

1- lowering distribution costs (Shorter channels –Reducing or eliminating middlemen)
2- using foreign trade zones: Establish free trade zones (FTZs)
3- lowering tariffs (Repackaging)
4- lowering cost of goods (Manufacturing in a third country)

Question 8

Types of countertrades?

Answer 8

1-Barter
2-Compensation deals
3-Counter-purchase
4-Product buyback

Question 9

Problems of Countertrading?

Answer 9

1-Determining the value of and potential demand for the goods offered
2-Barter houses

Question 10

Transfer Pricing Strategy benefits?

Answer 10

1-Lowering duty costs
2-Reducing income taxes in high-tax countries
3-Facilitating dividend repatriation when dividend repatriation is
curtailed by government policy

Question 11

Price Quotations
May include specific elements affecting the price such as?

Answer 11

1-Credit
2-Sales terms
3-Transportation
4-Currency
5-Type of documentation required

Question 12

price standarization?

Answer 12

applied in all marketsafter certain factors such as exchange rates: low risk and consistent image

Question 13

price differentiation?

Answer 13

allowing local partner to set the price that is most appropriate: affect image, lack of control over time