Exam 1: Chapter 7 Flashcards
Gray markets
Authorized, genuine products that are leaked from the normal channels and sold through other channels
-Parallel imports
What are grey products
These are real, original products
A true knockoff is a ______
counterfeit
What is a counterfeit
it is a fake product
What does it mean by parallel imports grey goods
- goes through countries lines
- they come with a parallel fashion
What are illegal parallel imports?
liquor, guns, pharmaceuticals
What are the 3 things that contribute to making a grey good?
- Excess supply of the product
- Extreme pricing differences between geographic areas
- Exchange rates.
How does Walmart have such cheap prices?
Selling grey goods
Who are the winners of grey good exchange?
- The person who made the grey good
- The person profiting off the margin of the grey good
Who are the losers of grey good exchange?
- The customer who gets a damaged package.
- The retail that is selling the same product for $40 more than the person selling the grey good.
What are one of the reasons why not to buy a grey good?
The company wont fixed your broken Rolex (grey good) or Toyota (grey good)
Example Champagne
Basically just insane margins selling champagne (grey good)
Winners and losers.
losers person selling them b4 a person came in with the grey good
Public policy issues
- the rights of the trade market owners
- branding
- downs of trade - whether you allow grey goods come into the country.
- Someone losing a job because someone is making the grey good in their country.
What is it called when someone is undercutting your price?
free riding
