University:
College
Course:
College Marketing
Academic year:

2023
Views:

348

Pages:

1
Author:

Angeline Watson

11-2. Define the various types of pricing strategies and objectives available to global marketers.  Three Strategies discussed in the chapter are market skimming, penetration pricing, and market holding or status quo pricing. Market skimming is appropriate in the introductory phase of the product life cycle if there is little competition or few acceptable substitutes. Skimming can be the quickest way for a company to recoup product development and marketing costs.  With a penetration pricing strategy, a relatively low price is established in an effort to gain market share. This strategy has historically been favored Japanese companies that take a longer-term view of profitability.  Status quo pricing is particularly important in global marketing because currency functions can drive up product prices in export markets. To avoid a sales decline, a company should be prepared to adjust prices. 11-4. Why do price differences in world markets often lead to gray marketing?  Price differentials mean opportunity to engage in arbitrage. “Buy low, sell high” is the operative phase, and many entrepreneurs are quick to capitalize n the chance to make some quick money. On the consumption side, many buyers jump at the chance to save money. 11-5. What is a transfer price? Why is it an important issue for companies with foreign affiliates? Why did transfer pricing in Europe take on increased importance in 1999?  A transfer price if the price one unit of a company charges to another company unit for goods and services. Transfer prices can be determined on the basis of the market, or by negotiation between the company's various units. Companies under the jurisdiction of U.S. tax laws must comply with Section 482, the portion of the Internal Revenue Code that deals with controlled intra-corporate transfers.