Exam 17: Global Pricing

Market-based pricing is determined by the initial price of a product in comparison to competitors' prices.

Uncontrolled prices can exist when sales are made by members of the multinational corporation to unrelated parties.

Which of the following is a growing trend among U.S. based multinational corporations with central procurement facilities that must send products to subsidiaries?

When the government creates regulations that set maximum or minimum prices for products, and the government imposes limits on price changes, this is known as guerilla pricing.

The IRS requires that the price or royalty rate for any cross-border transfer must be commensurate with income. What does this mean?

What are the three philosophies of transfer pricing?

Allocation of resources among the various units of the multinational corporation requires central management to establish the appropriate transfer price to meet all but which of the following objectives?

Who or what sets the price ceiling in a given market?

Which of the following is a disadvantage of organizing an in-house versus a third party countertrade transaction?

Credits in a clearing account can be sold or transferred to a third party. This activity is called:

A countertrade is a transaction in which purchases are tied to sales and sales to purchases.

Transfer pricing is described as:

High transfer prices on goods shipped into a subsidiary and low prices on goods imported from it will result in minimizing the tax liability of a subsidiary operating in a country with high income taxes.

What is one thing that the price element of the marketing mix creates that the other three elements do not?

When competition is keen or expected to increase in the near future, what would cause a product to be more attractive to buyers and the market less attractive to the competition?