Exam 11: Pricing Decisions

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% 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:

Several Incoterms are known as "C-Terms" or "main-carriage" terms.

The Internet and globalization have forced policymakers in Germany to repeal some of the archaic laws.

GATT and the U.S.Congress have both defined "dumping." What is the difference in their definitions? Why is dumping a major issue in global marketing?

Which of the following does not contribute to price escalation in global marketing?

Levi's non-U.S.sales represent about one-third of revenues but more than 50% of profits.

A market penetration pricing strategy calls for setting price levels that are high enough to quickly build market share.

Marketers of domestically manufactured finished products may be forced to switch to offshore sourcing of certain components to keep costs and prices competitive.

In July 2001, the euro's value relative to the dollar was about €1.00 = $0.85.By November 2009, the euro had strengthened to €1.00 = $1.48.In February 2012, one euro was equal to $1.33.All other things being equal, if a European-based global company wants to preserve margins for goods exported to the U.S.market, the company should:

Toys "R" Us successfully targets the Japanese toy market by bypassing layers of distribution and adopting a warehouse style of selling similar to its U.S.approach.

"Cost-based," "market-based," and "negotiated" are three approaches to:

The European Commission recently fined Nintendo nearly $150 million after it was determined that the video game company had colluded with European distributors to fix prices.Why is price fixing not considered a good practice? What are different kinds of price fixings?

Price is a strategic variable, and hence pricing strategy should be developed using a rational, analytical approach, or an intuitive one.

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?

Why is compensation trading also called a "buyback?" How does it differ from switch trading?

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?

Which of the following is true about proper use of the term "countertrade"?

Suppose the Japanese yen is weak in relation to the U.S.dollar.Rather than stressing price benefits, Japanese companies exporting to the U.S.should emphasize quality improvements and after-sales service.

Which of the following would not be used by an exporter with a weak home-country currency?

The most general term for the global phenomenon involving reciprocal business interactions between parties in various countries is known as: