Deck 11: Setting Global Prices

Question 1

Emma's selection of an $80.00 coffee maker instead of a $35.00 coffee maker with similar features marks her as a consumer who makes __________ choices.

A) price-seeking
B) best-value
C) price-averse
D) sale price

Answer 1

A

Question 2

Coordination of prices across countries often results in the reduction of _________________________.

A) gray market imports
B) distribution channel partners
C) customs duties
D) profitability

Answer 2

A

Question 3

Consumer rationality has been aided by the growing use of the Internet for shopping.

Answer 3

True

Question 4

GranitiFiandre tiles support their price positioning with communications that emphasize _____________________________.

A) product life cycle pricing
B) pricing promotions
C) low-cost producer status
D) value creation

Question 5

India-based Arvind Ltd.produces products for Wrangler and Tommy Hilfiger and also produces price-appropriate "Ruff & Tuff" jeans in India via _________________________________________________.

A) use of substandard fabric
B) a USD 6.00 'sew it yourself' kit
C) cost reductions resulting from low levels of advertising
D) significantly reduced profits

Question 6

When Ralph Lauren markets both its designer Ralph Lauren fashions to high end boutiques in global markets,and also markets the less expensive Lauren by Ralph Lauren brand to department stores in North America it is utilizing a __________________.

A) wholesale pricing strategy
B) direct sales strategy
C) non-prestige pricing strategy
D) two-tiered pricing strategy

Question 7

Lu-Ann has finally decided to join the ranks of PC users after years of being a loyal Mac devotee.When she starts using her new PC she is uncomfortable with the differences in operation,and realizes she will have to spend several hours 're-learning' her PC operating skills.Lu-Ann's situation is representative of a ____________________________________.

A) monetary price
B) non-monetary price
C) PC price
D) promotional price

Question 8

Isabella's commissions to her foreign sales agent,as well as the costs of raw materials required to produce her product,are considered __________________________________.

A) total costs
B) export costs
C) variable costs
D) fixed costs

Question 9

As Hans calculates his final price the introduction of his fishing gear into Australia,he assesses the impact of freight forwarding,import duties and country-of-origin marking.Hans is assessing ______________________.

A) fixed costs
B) product development costs
C) export-related charges
D) finance charges

Question 10

All of these constitute methods of lowering the producer's retail price except _____________________________.

A) eliminating intermediaries
B) including additional distributors and dealers in the distribution channel to increase sales
C) reducing costly product features
D) shifting production to countries with lower labor costs

Question 11

If a company is selling a commodity-type of product or service,then quality will be the driving factor determining sales.

Question 12

Global price comparisons have been facilitated by ________________________________________________.

A) global price regulations
B) websites such as NexTag.com
C) efforts by multinationals to standardize global pricing
D) the convergence of global consumer purchasing behavior

Question 13

Non-monetary price represents the idea the consumer's perception of a price as cheap or expensive.

Question 14

Companies that have a strong brand image relative to competition are often subjected to price pressures.

Question 15

Max perceives himself to be a rational thinker.When determining which brand of flatscreen television to purchase,he analyzes the price of the item in relation to its specifications,and service warranties to find the product with the lowest total expected cost.Max applies the ____________ choice strategy.

A) sale price
B) price-averse
C) best value
D) price-seeking

Question 16

The two dimensions of the consumer's perceived price of a product include ________________________________.

A) core price and supplemental price
B) company and consumer prices
C) retail and wholesale prices
D) monetary and non-monetary prices

Question 17

To be price competitive in the Chinese toothpaste market,Proctor and Gamble _______________________________.

A) introduced a new product with lower manufacturing costs
B) reduced price and profit to meet Chinese consumer requirements
C) reduced the number of channel partners in China
D) significantly reduced the amount of toothpaste in each package

Question 18

The addition of channel intermediaries in an export transaction will usually result in ___________________________________.

A) increased consumer prices or decreased profitability
B) increased profitability or decreased prices
C) an unprofitable export transaction
D) retail prices too high to generate sales

Question 19

Globalization has resulted in a convergence of consumer price perceptions.

Question 20

A combination of price and prestige sensitivity in China has contributed to _____________________________________.

A) a large black market for counterfeit brands
B) an inability for U.S. firms to be successful there
C) large and rapid profitability for foreign firms entering the Chinese market
D) a lack of interest in prestige brands

Question 21

If inflation is high in a producer's country,_____________________________.

A) exit the market
B) plan on increased margin levels.
C) the company should implement a price increase
D) the company may be forced to absorb the added costs

Question 22

A credible floating exchange rate creates a threat to international trade.

Question 23

With respect to money supply,price levels and current account balances,floating exchange rates can be ________________.

A) excessively volatile
B) a stabilizing factor
C) regulated by the World Court
D) easily predicted

Question 24

Penetration pricing _________________________________________________.

A) is successful in a market where consumers are price sensitive
B) sets a high price for new products in order to quickly pay back R&D costs
C) is not efficient in market share
D) is best applied to prestige products

Question 25

Jennifer is Accounting Manager with 5M Corporation in Pittsburgh.She wishes to purchase the equivalent of USD 500,000 worth of sprockets from a firm in the UK.Her supplier insists on receiving payment in British pounds,and expects payment upon product delivery in three months. Jennifer realizes that between the time her purchase order is received and her product arrives,the value of the British pound in U.S.dollars could increase considerably,and she could wind up paying far more than she'd anticipated due to currency exchange fluctuations.How can she employ hedging to mitigate this risk?

A) She can cross her fingers and hope for the best!
B) She can purchase $500,000 of British pounds now.
C) She can invest in Euros.
D) She can pay for the product immediately.

Question 26

The difference between incremental revenues and incremental cost of exporting in a foreign target market is represented by _________________.

A) domestic versus export pricing
B) profit contribution
C)
D) market-based pricing

Question 27

Eric's supervisor advises that his prices for organic pet foods in the Japanese market must deliver a 40% gross profit margin per unit no matter what competitive and demand conditions are evident.Eric is thus forced to apply _____________ pricing.

A) market-based
B) cost-based
C) competition-based
D) marketing-mix based

Question 28

Socio-economic and political country characteristics are among the controllable elements that can influence a company's pricing strategies and policies.

Question 29

True Blue produces water treatment products. The firm has constructed several distribution centers in its EU markets that are specifically designed to accommodate the special tanker trucks used to transport the treatment chemicals.Its increased ability to control pricing in these markets is related to __________________.

A) asset specificity
B) its large size
C) its prior experience in the international marketplace
D) market acceptance of the product

Question 30

The Economist's Big Mac Index measures _______________________.

A) Purchasing Power Parity
B) exchange rate fluctuations
C) world economic health
D) the relative price of food in various countries

Question 31

Marta is purchasing document scanners for her company's Greek headquarters building.The U.S.company supplying her has quoted her in U.S.dollars.Marta is incurring ____________ in proceeding with the deal as specified.

A) import duties
B) exchange rate risk
C) distribution channel risk
D) non-currency risk

Question 32

Demand elasticity is taken into consideration when the __________________ method is applied.

A) export pricing
B) cost-based pricing
C) competition pricing
D) profit-contribution pricing

Question 33

One benefit of a weakening domestic currency is ___________________________________.

A) an increase in exports to foreign markets
B) the increased price of exports to foreign markets
C) greater stability in foreign currency transactions
D) the increased value of domestic assets

Question 34

A periodic adjustment in the value of a currency in relation to other currencies is called a ____________________.

A) Special Drawing Rights
B) devaluation
C) fixed exchange rate
D) floating exchange rate

Question 35

Centralized decision-making in international pricing leads to higher control of final prices and of their coordination across different countries.

Question 36

Government subsidies are typically introduced in order to ___________________________.

A) increase a domestic firm's competitiveness
B) increase the quantity of imported goods
C) increase local prices
D) increase prices in export markets

Question 37

Because the Danish Kroner is pegged closely to the value of the Euro,___________________________.

A) Danish consumers pay considerably less for products produced in Europe than in Denmark
B) Danish consumers pay considerably more for products produced in Europe than in Denmark
C) pricing in Kroner or Euro is almost equivalent
D) high volatility surrounds Kroner/Euro transactions

Question 38

A skimming strategy is based on the concept that a company can charge some consumer segments higher prices for a product.

Question 39

Because BlendBest products price are marketed through retail chains that operate in numerous global markets,their pricing strategy should reflect _________________________.

A) price customization
B) price adaptation
C) price standardization
D) price modification

Question 40

The Venezuelan government's application of government price controls on value priced,fresh ground coffee exports resulted in ________________________.

A) a shortage of premium priced and flavored coffees
B) a decrease in the price of value-priced coffee
C) a shift to sales of expensive, non-regulated coffee types
D) an increase in sales of value-priced coffees

Question 41

Countertrade refers to the trading/exchange of goods or services without using currency.

Question 42

When Jim's division is charged the same amount for the polypropylene he purchases from his sister division as the injection molding he competes with,his company is a proponent of _______________________.

A) competitive pricing
B) adaptive pricing
C) preferential pricing
D) arm's length pricing

Question 43

The price set and paid for products shipped between units of the same organization is referred to as _____________ pricing.

A) transfer
B) unit
C) multinational
D) domestic

Question 44

Banco de Roma has guaranteed that it will pay Giovanni 5,000 Euros upon receipt of documents confirming the transaction for which payment is expected.Giovanni is being paid via _____________________.

A) a letter of credit
B) cash in advance
C) open account
D) countertrade

Question 45

Low-income emerging markets often require price adaptation for successful market penetration and retention.

Question 46

The existence of differences in transportation costs and local economic and financial conditions and increasing globalization are factors that favor decentralized price decision-making.

Question 47

Global price leaders often target and dominate a transnational segment where prices are homogeneous.

Question 48

Dumping is the practice of selling products in other countries' markets below cost or below domestic prices.

Question 49

The most secure method of payment for an export order is advance payment.

Question 50

Bolton watches are sold for an average price of $30.00 per unit in Taiwan,but typically command a price of $65.00 or higher in other global markets.When Bolton's Taiwanese distributors resell the watches to Russia to obtain higher prices,it is an example of ________________________.

A) dumping
B) a parallel import
C) a tariff barrier
D) price lining

Question 51

Pricing for the medical supply industry tends to be standardized across different countries.Catronics,a maker of medical lab safety items,feels pressured by the pricing tactics of competitive global brands.Catronics is an example of a __________________.

A) multi-local price follower
B) local price follower
C) global price follower
D) global price leader