MKTG 445 - Chapter 11

19. Which of the following is true about proper use of the term "counter-trade"? A) "Counter-trade" is a blanket term that refers to several different types of business transactions. B) The term "counter-trade" is interchangeable with "counter-purchase". C) The term "counter-trade" is interchangeable with "barter" D) The term "counter-trade" is interchangeable with "dumping". E) The term "counter-trade" is interchangeable with "offsets".

A) "Counter-trade" is a blanket term that refers to several different types of business transactions.

21. All of the listed advantages are for "Extension or Ethnocentric" pricing except: A) it does not respond to the competitive and market conditions of each national market. B) it is extremely simple since it does not require information on market condition. C) it calls for the per-unit price of an item to be the same all over the world. D) it does not require competitive conditions for implementation. E) the importer must absorb freight and import duties.

A) it does not respond to the competitive and market conditions of each national market.

16. Parallel importing occurs when companies employ a(n) _____ multinational pricing policy that calls for setting different prices in different country markets. A) polycentric B) ethnocentric C) geocentric D) regiocentric E) extension

A) polycentric

10. 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: A) pursuing artificially high margins B) dumping C) using offsets D) market skimming E) gray marketing

B) dumping

14. Coffee bearing the Fairtrade label signifies that the coffee is: A) pure and free of contamination and grown organically B) purchased by farmers getting a fair share based on the quality C) donated by a Catholic organization to its members D) sponsored by an organization that supports price decisions E) purchased with not taxes and duties paid to exporters

B) purchased with farmers getting a fair share based on the quality

17. For years, Mercedes-Benz utilized a ______ pricing strategy; however, this created an opportunity for Toyota to introduce its luxury Lexus line and undercut Mercedes. A) cost-based B) skimming C) gray market D) market holding E) penetration

B) skimming

2. "Cost-based", "market-based", and "negotiated" are three approaches to: A) counter-trade B) transfer pricing C) price skimming D) dumping E) gray marketing

B) transfer pricing

9. ____ occurs when a manufacturer conspires with wholesalers or retailers to ensure certain retail prices are maintained. A) Horizontal price fixing B) Gray marketing C) Vertical price fixing D) Dumping E) Black marketing

C) Vertical price fixing

1. Which of the following forms of counter-trade does not require use of money or credit between parties? A) offset B) switch trading C) barter D) compensation trading E) none of the above

C) barter

4. The direct exchange of goods or services between parties in lieu of monetary payment is: A) switch trading B) counter-purchase C) barter D) compensation trading E) offset

C) barter

18. The most general term for the global phenomenon involving reciprocal business interactions between parties in various countries is known as: A) offset B) compensation trading C) counter-trade D) switch trading E) barter

C) counter-trade

13. Which of the following would not be used by an exporter with a weak home-country currency? A) Exploit marketing opportunities in all markets B) Speed repatriation of foreign earned income C) Expand product line and add more costly features D) Shift sourcing outside home-country market E) Buy advertising, insurance, and other services in home-country market

D) Shift sourcing outside home-country market

12. 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? A) geocentric B) polycentric C) extension pricing D) ethnocentric E) regiocentric

D) ethnocentric

15. The unauthorized distribution of trademarked goods to exploit price differentials in world markets is known as: A) market skimming B) licensing C) black marketing D) gray marketing E) dumping

D) gray marketing

20. A market _____ pricing strategy calls for setting price levels that are low enough to quickly build market share. A) cost-based B) holding C) skimming D) penetration E) gray

D) penetration

6. If the manufacturer of a sophisticated new consumer electronics product determines that many target consumers qualify as "innovators" and "early adopters" with relatively inelastic demand curves, the company should use the _____ pricing strategy. A) market holding B) gray market C) penetration D) skimming E) cost-based

D) skimming

7. When Sony first 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: A) penetration strategy B) cost-based strategy C) transfer pricing strategy D) skimming strategy E) price ceiling strategy

D) skimming strategy

8. A firm without much export experience uses the rigid cost-based pricing method. Which of the following considerations is the exporter ignoring? A) Is the price competitive in view of local market conditions? B) Does the price take anti-dumping laws into consideration? C) Does the price reflect the product's quality? D) Will authorities in export markets view the price as reasonable or exploitative? E) All of the above

E) All of the above

22. If a distributor's margins are based on the "landed" price of an import shipment, they will be based on: A) VAT B) ex-works price C) transportation costs D) insurance costs E) all of the above

E) all of the above

3. Which pricing strategy has the advantage of being simple to calculate but has the disadvantage of ignoring demand and competitive conditions? A) penetration B) market holding C) gray marketing D) skimming E) cost-based

E) cost-based

5. 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. A) adaptation B) geocentric C) regiocentric D) polycentric E) ethnocentric

E) ethnocentric

11. According to a recent study of European industrial exporters, companies that utilized independent distributors would be most likely to utilize: A) extension pricing B) regiocentric pricing C) ethnocentric pricing D) geocentric pricing E) polycentric pricing

E) polycentric pricing