Deck 11: Export Pricing

Question 1

Incoterms are the terms agreed upon by nation states that allow for incorporation of companies as recognized globally.

Answer 1

False

Question 2

A draft is a form of government currency used to pay duty on products shipped across country boundaries.

Answer 2

False

Question 3

Because international currency is fluid, neither party will get harmed if the exchange rate is different in one country versus another.

Answer 3

False

Question 4

The most favorable term to the exporter is cash in advance.

Question 5

Some exporters prefer price stability to the greatest possible degree and allow mark-ups to vary in maintaining stable local currency prices.

Question 6

The ability to offer financing or credit terms is often critical in competing for, and winning, export contracts.

Question 7

Dun & Bradstreet is one of the firms which supplies credit information on companies.

Question 8

Absorption defines the currency fluctuation in which the government compensates an exporter for losses in a given market.

Question 9

Forfaiting provides the exporter with cash at the time of the shipment.

Question 10

When penetrating pricing is used, the product is offered at a higher price intended to generate high sales figures for the new product.

Question 11

Financing assistance for exporters is only available from the public sector.

Question 12

The most favorable term to the importer is consignment selling, which allows the importer to defer payment until the goods are actually sold.

Question 13

Political risk is a controllable variable, which the exporter controls through paying extra taxes or import duties.

Question 14

An option gives the holder the right to buy or sell foreign currency at a pre-specified price on our up to a pre-specified date.

Question 15

The final export price of a good is negotiated in person.

Question 16

Jumping is selling goods overseas for less than in the exporter's home market or at price below the costs of production, or both.

Question 17

The costs of modifying the product for foreign markets are considered export-related costs.

Question 18

As in all marketing decisions, the marketing intermediaries establish the basic premise for pricing.

Question 19

Factoring houses are places where customs affords reliable accounting of the dollar increment of actual purchasing power.

Question 20

Price is the only element of the marketing mix that is revenue generating.

Question 21

Through foreign sourcing, the exporter may accrue an additional benefit to lower costs. An expert may be refunded up to 99 percent of duties paid on imported goods when they are exported or incorporated in articles that are subsequently exported within five years of the importation. What is this called?

A) Foreign sourcing
B) Zipping imports
C) Duty drawbacks
D) Long term pressure

Question 22

The marginal cost method of pricing considers the direct costs of producing and selling products for export. What costs need to be excluded in these direct costs?

A) currency fluctuations
B) potential government regulations in future legislative sessions
C) fixed costs, R&D and domestic overhead
D) weather forecasts, especially in regards to El Nino

Question 23

In preparing a quotation, an exporter must be careful to take into account three things. Which of the following is not one of those requirements?

A) Government action in previous tariff related intergovernmental disputes.
B) The cost of modifying the product for foreign markets.
C) Operating costs of the export operation.
D) Costs incurred in entering the foreign market.

Question 24

The combined effect of both clear-cut and hidden costs results in export prices that far exceed domestic prices. This cause is known as:

A) export pricing
B) seamless integration
C) relationship pricing
D) price escalation

Question 25

_________ price is set regardless of the buyer and maybe based on average unit costs of fixed, variable or export related costs.

A) Pinnacle
B) Situational
C) Standard worldwide price
D) Export variable price

Question 26

Which of the following is not a strategy described in the text to compensate for price escalation?

A) Weeding out government controls and avoiding them by entering markets through third parties.
B) Reorganize the channel of distribution
C) Adapt the product.
D) Use new or more economical tariff or tax classifications.

Question 27

Which of the following is considered external factors in setting an export price?

A) Specific target market customers
B) Cost of developing the product
C) Cost of producing the product
D) Cost of marketing the product

Question 28

_________ price system differentiates between domestic and export prices, and two approaches to pricing products for exports are available: driven and market-driven method.

A) Dual pricing
B) Bilateral pricing
C) Semi-pricing
D) Export secondary methodology

Question 29

VAT is a form of government sanction which is imposed on the full export selling price which represents a government action to products introduced from another country. What does VAT represent?

A) Visions and Trust
B) Variable Actions Transcontinental
C) Value added tax
D) Variable annuity tax

Question 30

What is true about the price element in the marketing mix?

A) Price is the only element to start with the letter P.
B) Price has no affect on the other variable elements.
C) Price is the only element of the marketing mix that is revenue generating.
D) Prices are always static.

Question 31

Which of the following is not a general price-setting strategy in international marketing?

A) Base plus cost margin
B) Standard worldwide price
C) Dual pricing
D) Market-differentiated pricing

Question 32

Which of the following is not one of the instances when a price change is appropriate?

A) Never
B) Product launch
C) Change in market conditions
D) Change in exporter's internal situation

Question 33

With multiple-product pricing, the various items in the line may be differentiated by pricing them appropriately to indicate all but which of the following examples?

A) Economic version
B) Standard version
C) Top-of-the-line version
D) Generic version

Question 34

Market differentiated pricing calls for export pricing according the dynamic conditions of the marketplace. What are the three changes which might affect this type of pricing?

A) Pre, present and post fluctuations.
B) Changes in competition, exchange rates and the environment.
C) Space, time and utility.
D) Money, media and markets.

Question 35

Which of the following is not a general alternative pricing mechanism?

A) Posting
B) Skimming
C) Market Pricing
D) Penetration

Question 36

Which of the following is not a factor to be considered in determining price of an exported product?

A) The importance of price in consumer decision making.
B) The brand or brand family being considered.
C) The strength of perceived price-quality relationships.
D) Potential reactions to marketing mix manipulation by marketers.

Question 37

In the cost-plus method of pricing, there is one major drawback that sometimes precludes exports from using it. What is this drawback?

A) The cost of the final price may be so high that the firm's competitiveness is compromised.
B) It is so variable that the actual price cannot be substantiated.
C) There is high turnover of product resulting in costing fluctuations.
D) Each of the elements has to be examined individually, providing complex structures grids.

Question 38

CIF is the cost based on adding a simple set of formula to the price. What does CIF stand for?

A) Cost in Foreignland
B) Cumulative infrastructure framework
C) Cost, insurance and freight
D) Consumers, involvement and framing.

Question 39

Which of the following is not considered an Internal factor for setting and export price?

A) Company philosophy
B) Goals
C) Objectives
D) Customer

Question 40

Without accurate information, a company cannot combat phenomena such as price escalation. Appropriate export pricing requires the establishment of procedures to assess export performance. What department can provide this vital information on hidden costs?

A) Strategy and Planning
B) Research and Development
C) Accounting
D) Administration

Question 41

Prices quoted ex-works (EXW) are when the seller agrees to place the goods at the disposal of the buyer at the specified place on the date or within the fixed period. At which point do these prices apply?

A) At the end of the contract
B) Only at the point of origin
C) Throughout the entire process
D) Before, during and after the process

Question 42

What does Free Alongside Ship (FAS) mean?

A) At a named U.S. Port of export the exporter quotes a price for the goods including delivery, alongside a vessel at the port.
B) The price is designated while traveling on a ship in an ocean.
C) The customs representatives pull upside the ship to make the pricing decision.
D) When other ships come alongside the vessel, there are not taxes making it free.

Question 43

Which one of the following is not a description of a letter of credit?

A) Irrevocable versus revocable.
B) Instant versus prolonged.
C) Confirmed versus unconfirmed.
D) Revolving versus non-revolving.

Question 44

What is the most favorable term of funding for the importer?

A) Space
B) Time sensitivity
C) Consignment selling
D) Check execution

Question 45

Which of the following does not apply to Freight Forwarders?

A) They act as facilitators and advisors and help keeping down some of the export-related costs.
B) They can prepare quotations.
C) They pay for the shipping and absorb the costs.
D) Ensure that unexpected charges do not cause the exporter to lose money.

Question 46

The most favorable term to the exporter is:

A) freight on board.
B) shipment in process.
C) cash in advance.
D) credit with duty.

Question 47

When a draft is drawn on and accepted by a bank, what does it become?

A) Money in the bank
B) Banker's acceptance
C) Surety
D) Break line

Question 48

Which of the following is a draft most like?

A) A money order.
B) A line of credit.
C) An established credit application.
D) A personal check.

Question 49

What are the two forms of risk external to the process which might affect an export transaction?

A) Inward and Outbound
B) Pre and Post selling
C) Commercial and Political
D) Contact and Expatriate

Question 50

Why has Price become such a dynamic element of the marketing mix?

Question 51

Which of the following is not a one of the different types of term of sale?

A) FAS
B) FOB
C) CFR
D) FOP

Question 52

How is the final price negotiated for an exported good?

A) In person or electronically
B) Through the foreign exchange commissions
C) In order of acceptance
D) Aboard the vessel

Question 53

What is a skimming price strategy?

Question 54

Destination-specific adjustment of mark-ups in response to exchange-rate changes are referred to as:

A) Plastic
B) Markup via commercialization
C) Prime manipulation
D) Pricing-to-Market

Question 55

What is a Letter of Credit?

A) An instrument issued by a bank at the request of a buyer in which the bank promises to pay a specified amount of money on presentation of documents stipulated in the letter.
B) A way to establish and maintain a credit card purchase.
C) Given to shipping companies who have a line of vessels.
D) An instrument of currency issued by a foreign government to the exporter.

Question 56

What is the process of setting an export price?

Question 57

Free on board (FOB) applies to what kind of shipments?

A) Rail
B) Truck
C) Air
D) Vessel

Question 58

The International Chamber of Commerce accepted standard definition for terms of sale in 1936 and revised them in 2000 assist buyers and sellers in the international marketplace. What are these standard definitions called?

A) Buyer/Seller Pragmatism
B) E-commerce bylaws.
C) Setting prices constituencies
D) Incoterms