Exam 11: Pricing Decisions

Toyota, Sony, Olympus, and Komatsu are some of the well-known Japanese companies that use target costing, a process which is also known as "design to cost."

If a Lexus car is priced in U.S. dollars and sold at the dollar converted price in Indian rupees, what problems can be expected? What is the difference between ethnocentric, polycentric and geocentric pricing?

If a company manufactures a product in the home-country market as well as in foreign markets it is considered black marketing.

One of the highest profile companies, PepsiCo, which has done business in the Soviet and post-Soviet market for decades, has used this form of countertrade:

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

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?

When Sony introduced the first consumer VCRs in the 1970s, the retail price exceeded $1,000. Within a few years, the price dropped well below $500. This is an example of:

Gray market goods are trademarked products that are exported from one country to another and sold by authorized persons or organizations.

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:

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

Despite the high expenses associated with operating elegant stores and purchasing advertising space in upscale magazines, the premium retail prices that luxury goods like Louis Vuitton command translate into handsome profits. The Louis Vuitton brand alone accounts for 60% of LVMH's operating profit. On the other hand, Louis Vuitton spends $10 million annually battling:

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?

Which of the following would not be taken into account by a company using an ethnocentric approach to pricing decisions?

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 without permission. The distinctive packaging of the perfume is also protected by the U.S. copyright law. The ruling implies that:

Mexican customers generally carry small coins. To keep prices of shampoo and detergent below 11 or 12 pesos, Procter & Gamble is using which method of pricing?

Gray markets impose several costs or consequences on global marketers, which does not include:

Nintendo was fined nearly $150 million after it was determined that the video game company had colluded with European distributors. The distributors in countries with lower retail prices had agreed not to sell to retailers in countries with high prices. This is a classic example of:

When Walmart came to Brazil in the mid-1990s, it discovered that local competitors did not have the technological infrastructure that allowed them to match its aggressive pricing policies.

The following activities must be performed when goods cross international boundaries except:

Joseph Quinlan, chief marketing strategist at Bank of America, estimated that about 25 percent of U.S. merchandise exports represent shipments by American companies to their foreign affiliates and subsidiaries. This situation underscores the importance of ________ in global marketing.