A company using a geocentric international pricing strategy typically fixes the long term price floor based on ________.
A) transfer prices within corporate systems
B) profits from local sourcing
C) market penetration pricing
D) return on invested capital

Question

Quizplus · Accepted Answer

A geocentric international pricing strategy aims to balance global integration and local responsiveness. In this strategy, the company sets the long-term price floor based on the return on invested capital. This ensures that the company's overseas operations are profitable and the investments made in various markets are generating adequate returns. Transfer prices within corporate systems, profits from local sourcing, and market penetration pricing are short-term considerations that may be factored into the pricing strategy, but the long-term price floor should be based on the return on invested capital.

A Company Using a Geocentric International Pricing Strategy Typically Fixes