Question 1

In a global context, the price that a product can gain in the market often determines its development. For example, in low income countries, price must be in line with _____.&#10;A) purchasing power&#10;B) purchasing parity&#10;C) borrowing power&#10;D) promotional pricing&#10;E) consumer logistics

Accepted Answer

In low-income countries, the price of a product must align with the purchasing power of consumers, which refers to the financial ability of people to buy goods and services. This ensures that products are affordable to the target market.

Question 2

Which of these is NOT one of the four groups of international pricing decision factors?&#10;A) competitive factors&#10;B) promotional factors&#10;C) consumer factors&#10;D) product factors and distribution factors&#10;E) country factors

Accepted Answer

Promotional factors are not listed among the four groups of international pricing decision factors, which typically include competitive factors, consumer factors, product and distribution factors, and country factors.

Question 3

An important variable to consider in pricing decisions is the ____ of the Product Life Cycle existing in ____ countries.&#10;A) validity; developing&#10;B) stage; developing&#10;C) stage; different&#10;D) efficacy; different&#10;E) generalizability; developing

Accepted Answer

The stage of the Product Life Cycle is crucial in pricing decisions, and it varies across different countries due to variations in market maturity, consumer preferences, and economic conditions.

Question 4

When determining a product's final price, all of the following should be taken into consideration EXCEPT______________.&#10;A) marketing expenses&#10;B) variable costs&#10;C) finance and bank charges&#10;D) sunk costs&#10;E) export-related charges

Accepted Answer

Sunk costs are costs that have already been incurred and cannot be recovered. They should not influence the decision-making process for setting a product's final price, as pricing should be based on current and future costs and revenues, not on past expenditures.

Question 5

In some cases, exchange rate risk could be shifted to buyers if the buyer agrees to pay using the exporter's currency. However, there may not be a choice if the trade conventions are ____.&#10;A) reciprocal&#10;B) non-standard&#10;C) differentiated&#10;D) undifferentiated&#10;E) standard

Accepted Answer

When trade conventions are standard, it often means that there are established norms and practices regarding the currency in which transactions are conducted. In such scenarios, the exporter may not have the flexibility to shift exchange rate risk to the buyer by insisting on payment in their own currency, as the standard practice might dictate the use of a specific currency (often a major global currency like the USD or Euro) for international transactions.

Question 6

A(n) _________ of a domestic currency can stimulate exports and also create new market opportunities.&#10;A) weakening&#10;B) increasing&#10;C) strengthening&#10;D) reduction&#10;E) dollarization

Accepted Answer

A weakening of a domestic currency makes exports cheaper and more competitive in the global market, potentially increasing demand for them and opening up new market opportunities.

Question 7

The __________ method focuses on setting prices by fixing a profit margin over established product costs and thus ensures a more stable, predictable profit.&#10;A) market-based&#10;B) cost-based&#10;C) skimming&#10;D) penetration&#10;E) centralized

Accepted Answer

The cost-based pricing method involves setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk. This method ensures a stable and predictable profit by adding a fixed profit margin over the total costs.

Question 8

___________________ implies the same price position strategy across different markets.&#10;A) Price discounting&#10;B) Full-cost pricing&#10;C) Price standardization&#10;D) Incremental-cost pricing&#10;E) Price adaptation

Accepted Answer

Price standardization implies maintaining the same pricing strategy across different markets, meaning a company sets a uniform price for its products or services, regardless of the geographical location.

Question 9

When discussing transfer pricing, the ______________________ is based on the results of a hypothetical negotiation with an independent business partner.&#10;A) market-based transfer price&#10;B) independent transfer price&#10;C) assumed transfer price&#10;D) arm's-length transfer price&#10;E) negotiated transfer price

Accepted Answer

The arm's-length transfer price is based on the results of a hypothetical negotiation with an independent business partner, reflecting the price that would have been agreed upon by unrelated parties under similar circumstances.

Question 10

____________________ is the umbrella term that encompasses the trading or exchange of goods or services without using currency.&#10;A) Currency swap&#10;B) Non-financial exchange&#10;C) Negotiated trade&#10;D) Sovereign trade&#10;E) Countertrade

Accepted Answer

Countertrade is the correct term for the exchange of goods or services without using currency, acting as an umbrella term for various forms of barter and trade agreements that do not involve direct monetary transactions.

Question 11

Why can the same product have different prices in two countries that are next to each other Why is this of concern to a marketer?

Accepted Answer

The answer of Why can the same product have different...

Question 12

Marketers work hard to establish value by setting a reasonable price that matches firm policies and objectives. Customers don't often care about that; they are interested in what the product will cost them. What are the elements of cost that a customer includes beyond the &#34;sticker price&#34; to develop the price that provides value to him or her?

Accepted Answer

The answer of Marketers work hard to establish value by...

Deck 11: Setting Global Prices