Pricing Objectives Quiz and Flashcards: Test Your Knowledge of Les 10 Inter

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Questions and Answers

Which pricing strategy involves setting a low initial price to attract customers in a new market?

Skimming pricing (correct)

Transfer pricing

Export price escalation

Global pricing policy

What is the term for selling an imported product at a lower price than the normal charge in the domestic market?

Price differentiation

Gray marketing

Export price escalation

Dumping (correct)

Which pricing strategy focuses on setting the same prices for products or services in all markets?

Cost-based pricing

Discounts and allowances

Price standardization (correct)

Ethnocentric pricing

What is the term for the pricing of goods, services, and intangible property between units or divisions of a company?

Transfer pricing Signup and view all the answers

Which type of pricing involves adding a markup to the total cost of a product to determine its selling price?

Flexible cost plus pricing Signup and view all the answers

What is the term for selling products at a higher price in the export market than in the domestic market?

Export price escalation Signup and view all the answers

What is the law of one price?

All customers in different markets pay the same price for the same product Signup and view all the answers

What is the objective of market skimming pricing strategy?

To set a high initial price and then lower it gradually Signup and view all the answers

What is the primary objective of penetration pricing?

Stimulate market growth and capture market share Signup and view all the answers

What does PLC pricing strategy follow?

Change of product life cycle Signup and view all the answers

What is the purpose of experience curve pricing?

Making the product cheaper to produce as sales increase Signup and view all the answers

What is freemium pricing?

Providing a product for free and charging for more advanced features later Signup and view all the answers

What is the purpose of product service bundle pricing?

To increase profitability if sales of second item are low Signup and view all the answers

What does pricing objectives involve?

Determining unit sales and return on investment Signup and view all the answers

What are factors that affect pricing for goods that cross borders?

Costs, competition, and regulation Signup and view all the answers

What is the purpose of price floor and price ceiling?

To set the minimum and maximum prices for a product Signup and view all the answers

What is optimum pricing primarily determined by?

Function of demand in global markets Signup and view all the answers

What is the main objective of managers in determining pricing objectives?

Achieving unit sales, return on investment, and market share Signup and view all the answers

Study Notes

Pricing strategies in international business:
- Penetration, skimming, or other pricing objectives for a firm.
- Discounts and allowances: type and implementation.
- Exporting: obtaining an export license, packing goods, transporting, completing customer export papers, preparing invoices, and arranging for ocean freight and marine insurance.
Cost considerations in pricing:
- Rigid cost plus pricing vs. flexible cost plus pricing.
- Export price escalation.
- Gray marketing (parallel importing) and its implications on pricing.
International pricing strategies:
- Coordinating prices between countries (pricing across countries).
- Price standardization vs. price differentiation.
- Global pricing policy alternatives: ethnocentric, adaptation, or geocentric.
Cost-based pricing:
- Transfer pricing: pricing of goods, services, and intangible property between units or divisions of a company.
- Per-unit product costs (full absorption cost method).
- Cost-based transfer pricing vs. market-based transfer pricing.
Other pricing considerations:
- Dumping: selling an imported product at a lower price than the normal charge in the domestic market.
- Inflationary environment and its impact on pricing.
- Government controls, subsidies, and regulations affecting pricing decisions.

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Description

Test your knowledge of pricing decisions in global marketing with this quiz. Explore key concepts such as the law of one price, adaptation to new markets, and factors influencing pricing in national and global markets.