International – Ch. 11 – Flashcards

41) Which pricing strategy would be most appropriate for a marketer of luxury designer brands? A) gray market B) skimming C) penetration D) market holding E) cost based

42) If the manufacturer of a sophisticated new consumer electronics product determines that many target consumers qualify as "innovators" and "early adopters" with relatively inelastic demand curves, the company should use the ________ pricing strategy: A) gray market B) skimming C) penetration D) market holding E) cost based

43) Which pricing strategy did Sony use when launching the Walkman personal stereo? A) gray marketing B) skimming C) penetration D) market holding E) cost based

45) Excelsior Corp. launches a new hand-held personal digital assistant (PDA) for busy corporate executives. The initial retail price is set at $699. One year later, in an effort to reach a broader market, the price is lowered to $299. Which of the following describes the pricing strategies used by Excelsior Corp? A) skimming strategy followed by penetration strategy B) penetration strategy followed by cost based strategy C) penetration strategy followed by skimming strategy D) penetration strategy only E) skimming strategy only

49) A manufacturer attempting to set prices for its products in export markets must realize that CIF, VAT, and distributor markup all lead to: A) currency devaluations. B) dumping charges. C) market skimming. D) price escalation. E) market penetration.

51) Which of the following does not contribute to price escalation in global marketing? A) shipping and insurance charges B) value added taxes (VAT) C) different Incotherms as incentives D) duties and tariffs E) fluctuating exchange rates

54) Suppose a company selling in various country markets makes statements such as "we know what the customer wants, and he or she will have to pay for it." This is an indication of a(n) ________ approach to setting prices. A) ethnocentric B) polycentric C) regiocentric D) geocentric E) adaptation

55) According to a recent study of European industrial exporters, companies that utilized independent distributors would be most likely to utilize: A) ethnocentric pricing. B) polycentric pricing. C) regiocentric pricing. D) geocentric pricing. E) extension pricing.

56) Which automaker was described as using an ethnocentric approach to setting prices in the United States? A) Toyota B) Nissan C) Volkswagen D) Mercedes E) Lexus

57) Which of the following pricing strategies recognizes both local market differences and the importance of headquarters input into pricing decisions? A) ethnocentric pricing B) polycentric pricing C) geocentric pricing D) rigid cost-based pricing E) extension pricing

58) Which of the following would NOT be taken into account by a company using an ethnocentric approach to pricing decisions? A) the possibility of implementing a penetration strategy B) profitable price points that could be tied to local sourcing as opposed to home-country sourcing C) integration of price with other marketing mix elements D) factors unique to individual country markets E) none of the above would be taken into account by a company using ethnocentric pricing

59) If company managers decide to set the export price for a particular product at an amount equivalent to the home country price, they would be using which approach to pricing? A) ethnocentric B) polycentric C) regiocentric D) geocentric E) extension pricing

61) When Tag Heuer, a marketer of luxury watches, takes out newspaper ads urging consumers to purchase Tag Heuer products from authorized dealers only, the company is most likely attempting to combat the ________ problem. A) countertrade B) market holding C) price escalation D) gray market E) market skimming

62) In the early 1990s, the U.S. International Trade Commission ruled that several Japanese manufacturers were selling active-matrix flat panel display screens in the U.S. at less than fair value and thereby injuring the sole U.S. producer of similar screens. The ITC's ruling concerned: A) black marketing. B) market skimming. C) gray marketing. D) dumping. E) licensing.

63) Following the 1997 currency crisis in Asia, which American industry appealed to President Clinton for protection from foreign producers that were allegedly "dumping" products in the United States: A) auto industry. B) computer industry. C) steel industry. D) photo products industry. E) restaurant industry.

64) If a company sells products in export markets at prices that are below fair market value and that can harm producers in the export market, that company may be accused of: A) market skimming. B) using offsets. C) pursuing artificially high margins. D) dumping. E) gray marketing.

65) Germany's Bayer Group was fined millions of dollars to settle a lawsuit alleging it had conspired with ArcherDanielsMidland and other global companies to set prices for an enzyme used in animal feeds. What was the issue in this lawsuit? A) price skimming B) market penetration C) price bundling D) price fixing E) dumping

69) Which of the following is true about proper use of the term "countertrade?" A) The term "countertrade" is interchangeable with "offsets." B) The term "countertrade" is interchangeable with "barter." C) The term "countertrade" is interchangeable with "counterpurchase." D) "Countertrade" is a blanket term that refers to several different types of business transactions. E) The term "countertrade" is interchangeable with "dumping."

70) The most general term for the global phenomenon involving reciprocal business interactions between parties in various countries is known as: A) switch trading. B) barter. C) offset. D) compensation trading. E) countertrade.

71) In the 1970s and 1980s, the arrangement by which PepsiCo received payment for soft drink products sold to the Soviet Union was: A) switch trading. B) barter. C) offset. D) compensation trading. E) counterpurchase.

72) The direct exchange of goods or services between parties in lieu of monetary payment is known as: A) barter. B) switch trading. C) offset. D) compensation trading. E) counterpurchase.

73) Which of the following forms of countertrade does not require use of money or credit between parties? A) barter B) switch trading C) offset D) compensation trading E) none of the above

74) Which type of countertrade arrangement is required by governments seeking to reduce the budgetary impact of expenditures for defense or telecommunications? A) barter B) switch trading C) offset D) compensation trading E) none of the above

75) To win a contract to supply the United Kingdom with AWACS military aircraft, Boeing agreed to purchase products from the UK whose value was equivalent to 130 percent of the contract. This type of pricing arrangement, which is common when the customer is a foreign government and the product has military applications, is known as: A) barter. B) switch trading. C) compensation trading. D) offset. E) dumping.

76) When one of the parties to a barter transaction is not willing to accept the goods included in the transaction, that party is likely to utilize the services of a: A) switch trader. B) Foreign Trade Organization. C) Foreign Sales Corporation. D) Mittelstand owner. E) broker.

77) Suppose that World Corp. signs a contract to build a lumber processing plant in Siberia. If World Corp. signs a second contract agreeing to take partial payment for the plant in the form of lumber products produced at the plant, it is engaging in: A) barter. B) switch trading. C) offset. D) compensation trading. E) a hybrid countertrade arrangement.

78) Which of the following companies would be most likely to use some form of countertrade when selling its products in developing countries? A) Procter & Gamble B) Bell Helicopter Textron C) Nokia D) Mercedes-Benz E) Coca-Cola

80) Luxury good marketers found a new way to combat gray market imports into the United States. In March 1995, the U.S. Supreme Court let stand an appeals court ruling prohibiting a discount drugstore chain from selling Givenchy perfume with permission. The distinctive packaging of the perfume is also protected by the U.S. Copyright law. The ruling implies that: A) Givenchy can only be sold in copyrighted packages. B) Costco and Wal-Mart will no longer be able to sell Givenchy. C) Costco and Wal-Mart will be able to sell Givenchy with authorization. D) gray marketers will be able to market with authorization. E) discount drugstores cannot market a product resembling Givenchy's perfumes.