Exam 11: Pricing Decisions

In the United States,Levi Strauss & Company has to face competitive behavior since J.C.Penney and Sears are both aggressively marketing their own brands.

For years,Mercedes-Benz utilized a ________ pricing strategy; however,this created an opportunity for Toyota to introduce its luxury Lexus line and undercut Mercedes.

The skimming pricing strategy is appropriate in the mature phase of the product life cycle.

It is illegal for representatives of two or more companies to secretly set similar prices for their products.This practice is known as transfer pricing.

To win a contract to supply the United Kingdom with AWACS military aircraft,Boeing agreed to purchase products from the United Kingdom 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:

The ethnocentric pricing responds to the competitive and market conditions of national market.

Which of the following companies would be most likely to use some form of countertrade when selling its products in developing countries?

The unauthorized distribution of trademarked goods to exploit price differentials in world markets is known as:

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

Gray markets impose consequences which may result in authorized dealers being no longer the sole distributors.

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:

Companies using "rigid cost-plus pricing" set prices with adjustments to reflect market conditions outside the home country.

To win sales in important markets such as China,global companies can face demands for offsets even when transactions do not involve military procurement.

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:

________ occurs when a manufacturer conspires with wholesalers or retailers to ensure certain retail prices are maintained.

Joseph Quinlan,chief marketing strategist at Bank of America,estimated that about 25% 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.

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,then that company may be accused of:

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:

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.

In India,consumers do not like to be locked in to long-term contracts,and Apple distributes its iPhone exclusively through stores operated by Airtel,an Indian carrier,and Vodaphone.This pricing is an example of: