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Question 1

There are a number of factors that need to be taken into account when pricing products and services globally which can be generally categorized into:

a) firm level, product specific, channel specific and retailer type.

b) firm level, product specific, market specific and environmental.

c) brand image, channel specific and environmental.

d) brand positioning, product specific, market specific and environment.

Question 2

The minimum selling price that a firm can sustain for a product is determined by:

a) what it costs to produce

b) competitor's prices

c) what customers are prepared to pay for it

d) competitive parity

Question 3

Price discrimination by a firm implies that it:

a) matches selling prices closely to production costs

b) charges some groups more than others

c) minimizes its costs

d) publishes price lists

Question 4

A company entering a new market with low initial prices is most likely to be influenced in the short-term by which type of objectives?

a) Social objectives

b) Personal objectives

c) Market share objectives

d) Profit maximisation objectives

Question 5

A _________________strategy offers the flexibility which allows organizations to charge differential prices, according to market conditions, and may offer the best long term pricing solution.

a) corridor pricing

b) standardization

c) adaptation

d) polycentric

Question 6

Many organizations new to exporting will use ______________ method which is based on adding up all the costs of production and marketing (direct and indirect costs) and includes shipping and any other charges plus a profit percentage.

a) marginal cost pricing

b) cost plus pricing

c) competitive pricing

d) market oriented pricing

Question 7

Terpstra and Sarathy (2000) identified three types of risk from exchange rate fluctuations, which are:

a) transaction risk, export risk and market trend risk

b) discrimination risk, export risk and competitive risk

c) transaction risk, competitive risk and market portfolio risk

d) discrimination risk, exchange risk and competitive risk

Question 8

Price escalation is:

a) carrying out price increases.

b) changes in price due to inflation.

c) additions to the basic selling price due to all intermediates adding a margin for services.

d) additions to the basic selling price because retailers and wholesalers add their margins.

Question 9

Buying forward, trade in options or hedging are all examples of:

a) solutions to price discrimination in international markets.

b) non-tariff barrier encountered by businesses when exporting.

c) tariff barrier encountered by businesses when exporting.

d) overcoming the problems of currency fluctuations.

Question 10

Transfer pricing is due to:

a) the operations of parallel or 'grey' marketers.

b) countertrading by countries.

c) a way for International marketers to avoid paying tax.

d) international marketers transferring goods and services in their organization between different countries.

Oxford University Press, Online Resource Centre, Chapter 14.

Chapter 14

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