Question 1

Culture can play a role in the setting of a firm's product price in an overseas market.

Accepted Answer

Cultural differences can affect the perception of value, preference for certain product features, and willingness to pay among consumers in different countries. Therefore, firms may need to set different prices in overseas markets to account for these cultural factors.

Question 2

A culturally influenced aspect of pricing is that the price of a product can be viewed as a surrogate indicator of:

Accepted Answer

In many cultures, a higher price is often perceived as an indicator of higher quality, as people tend to associate cost with the value and quality of a product.

Question 3

The role of price is an important element in a firm's international marketing mix because price will:

Accepted Answer

All of the above statements are true. Price can impact the profitability of the firm, influence the level of demand for the product, contribute to the revenue generated by sales, and affect the perceived value and positioning of the product in the market. The pricing strategy must be carefully considered as it will impact the success of the firm's international marketing efforts.

Question 4

When determining the final price in international marketing, which of the following needs to be factored in?

Accepted Answer

When determining the final price in international marketing, all of the above factors - terms of sales, terms of payment, and consistency with other elements of the marketing mix - need to be factored in. It is important to consider the overall sales contract terms, as well as the payment methods and currencies accepted, to ensure that the final price accurately reflects the costs and risks associated with the transaction. Additionally, the pricing strategy should be consistent with other elements of the marketing mix, such as the product features, promotion strategy, and distribution channels, to ensure a cohesive and effective marketing approach.

Question 5

Which of the following statements related to the role of pricing and distribution in an overseas country is NOT true?

Accepted Answer

When a firm has a subsidiary in an overseas market, it can exert more control over the pricing and distribution of their product in that market. This is because the subsidiary is directly owned and controlled by the firm, allowing for more direct influence on pricing decisions. Therefore, statement E is the NOT true statement as it suggests the opposite.

Question 6

When setting prices for international markets it is necessary to take into account:

Accepted Answer

When setting prices for international markets, it is necessary to take into account substitute products, competitor prices, and availability of products. Therefore, the best answer is D, which is "all of the above."

Question 7

The use of the internet to remove parts of the distribution channel is known as:

Accepted Answer

Disintermediation refers to the process of using the internet to eliminate intermediaries (such as wholesalers or retailers) from the distribution channel. This allows companies to sell directly to customers, reducing costs and potentially increasing profits. Options A, D, and E are not specific to this concept, while Option B is not a commonly used term in marketing.

Question 8

Which of the following is NOT a component of price setting in the international market environment?

Accepted Answer

The answer of Which of the following is NOT a...

Question 9

An international price skimming strategy attempts to achieve:

Accepted Answer

An international price skimming strategy is a pricing strategy where a company sets a high price for their product or service with the aim of maximizing profits in the short term. Therefore, the objective of this strategy is to achieve the highest possible return in the quickest possible time, making option B the correct choice.

Question 10

In some cultures, everything is negotiable and no one believes that the first price offered is anything but a negotiating ploy. In these cultures, the initial offer by the buyer is treated as:

Accepted Answer

In cultures where everything is negotiable, the initial offer by the buyer is considered a starting or floor price that can be negotiated upwards.

Question 11

Price is the only marketing variable that generates revenue.

Accepted Answer

Price is the only marketing variable that determines the amount of revenue generated by a business. However, other marketing variables such as promotion, product, and place play, an important role in shaping the perception and demand for the product, which ultimately affects the price and revenue generated.

Question 12

For a market penetration pricing strategy to be successful in international markets, it is necessary to have:

Accepted Answer

Market penetration pricing strategy is based on setting a low price for the product in order to gain a large market share. This strategy is most suitable for entering a new market or competing with other brands on price. In international markets, mass markets and price-sensitive consumers are more common, which makes market penetration pricing strategy more likely to be successful. Highly differentiated products or specialized distribution channels may require higher prices, which would contradict the strategy. A niche segment of the market or wealthy consumers may not be enough to sustain long-term growth of the brand.

Question 13

With the internet, government power over prices is increased.

Accepted Answer

The internet has actually decreased government power over prices as it has opened up more competition and allows consumers to easily compare prices from different sellers.

Question 14

The only variable that can be changed in the international market at short notice is distribution.

Accepted Answer

Other variables such as price, promotion, and product features can also be adjusted in the short term to respond to changes in the international market.

Question 15

The price that an international buyer pays for the product, or sees being demanded for a product, becomes the ________ price against which other products are likely to be evaluated.

Accepted Answer

A reference price is the price that customers believe a product should be sold for based on their previous experiences or external information, such as prices of similar products. In the context of international marketing, the price that an international buyer pays for a product becomes the reference price against which other products are likely to be evaluated. This means that if a product is priced significantly higher than the reference price, customers may perceive it as overpriced and may choose to buy a similar product that is priced closer to the reference price. Therefore, understanding the reference price in a specific market is crucial for a company's pricing strategy.

Question 16

The internet can reduce costs and therefore price due to:

Accepted Answer

The internet can reduce costs and prices through the removal of physical distribution, trade portals, and disintermediation. All of these factors can contribute to lower costs, higher efficiency, and ultimately lower prices for consumers. Therefore, choice D is correct.

Question 17

Discuss the concept of reference prices in international marketing. What non-price factors of the marketing mix help to differentiate the pricing of products away from the core reference price held in the mind of the market?

Accepted Answer

The answer of Discuss the concept of reference prices in...

Question 18

The internet reduces the exporter's ability to extract price premiums from buyers.

Accepted Answer

The internet allows buyers to easily compare prices and products, which reduces the exporter's ability to charge higher prices and extract price premiums. This is due to increased competition and transparency in the marketplace.

Question 19

Discuss how the internet has impacted pricing in international markets. Illustrate your answer with examples.

Accepted Answer

The answer of Discuss how the internet has impacted pricing...

Question 20

Which of the following statements is true about the role culture plays in price setting?

Accepted Answer

The answer of Which of the following statements is true...

Quiz 14: International Pricing for Profit