Exam 16: International Pricing Strategy

A firm is vulnerable to competition from parallel imports if it

Which type of countertrade is the only type of exchange that does not involve monetary exchange?

Even in unified markets such as the European Union, price differentials exist.

Governments defend the payment of subsidies to developing industries under the _________________________ argument.

The location of production facilities determines

It is difficult for financial officers to keep track of product costs in international marketing.

The location of production facilities determines the extent to which a company can control costs and price the products competitively.

Companies can and often do price themselves out of the market in certain countries.

Diverting products purchased in a low-price market to other markets by means of a distribution system not authorized by the manufacturer is known as a(n) ____________________ market.

In countries like Egypt and Romania a company using even pricing will be at a disadvantage even if it is pricing below competitors' prices.

A manufacturer may charge different prices in different markets for the same product. Which reason is not a valid reason for differential pricing?

What loophole do international firms take advantage of in circumventing anti-dumping laws?

According to the World Trade Organization, dumping should be condemned if it threatens to cause injury to an established industry in a particular market and/or if it delays the establishment of a viable domestic industry.

_________________________ involves two exchanges that are paid for in cash. This involves two parallel contracts.

According to the text, for which industry does the U.S. government support the use of countertrade?

____________________ involves selling a product to a buyer and agreeing to accept, in return for payment, products from the buyer's firm or from the trade agency/institution of the buyer.

____________________ involves a simple, non-monetized exchange of goods and/or services between two parties.

Transfer pricing is viewed as unethical by most international firms and is even illegal in some countries.

A typical example of ____________________ involves a foreign company that enjoys high prices and high profits at home as a result of trade barriers against imports. The company uses those profits to sell at lower prices in foreign markets in order to build market share and suppress the profitability of competitors with open home markets.

In a(n) _________________________, the seller builds and provides a turn-key plant. The seller is paid up-front part of the cost of the plant in an agreed upon convertible currency. The seller also agrees to purchase specific quantities of the plant's output over an extended period of time.