A company would most likely export at a price lower than its production and distribution costs in order to ________.
A)use a skimming strategy abroad before using one domestically
B)test a market before making a big commitment
C)use a cost-plus strategy globally
D)encourage gray market sales

Question

Quizplus · Accepted Answer

A company may choose to export at a lower price than its production and distribution costs to test the market's response and gain insights on demand, competition, and other market factors before making a bigger commitment. This allows the company to minimize risks associated with entering new markets, such as inventory build-up, pricing mistakes, or slow sales, and adjust its strategy accordingly. This approach is often used in the early stages of global expansion and allows companies to gain valuable market intelligence.

A Company Would Most Likely Export at a Price Lower