Global Pricing Quiz

The unauthorized distribution of trademarked goods to exploit price differentials in world markets is known as:

gray marketing

A tech company finds that when it raises the monthly subscription for its app by $1, it loses nearly 30% of its users. Based on this behavior, what kind of demand curve is the product experiencing?

Elastic demand

An electronics brand sells headphones in the U.S. at $40, but the same product is sold in Brazil at $28—even though the cost of production is $32. Which of the following best describes this?

Dumping

The direct exchange of goods or services between parties in lieu of monetary payment is known as:

barter

A toy company sets a price for a new product by first determining the maximum price consumers in Europe are willing to pay. It then subtracts desired profit margins and adjusts product features to hit that target. This is an example of:

Target costing

A market ________ pricing strategy calls for setting price levels that are low enough to quickly build market share.

penetration

A U.S.-based luxury cosmetics brand launches in India but is surprised when the local price ends up nearly double the domestic price due to shipping, tariffs, and distributor markups. This is an example of:

Export price escalation

If a company's home currency strengthens, it is:

an unfavorable turn of events for the typical exporter.

Which pricing strategy has the advantage of being simple to calculate but has the disadvantage of ignoring demand and competitive conditions?

cost-based

If the manufacturer of a sophisticated new consumer electronics product determines that many target consumers fall into a category with relatively inelastic demands, the company should use the ________ pricing strategy.

skimming

If a company sells products in export markets at prices that are below fair market value and that can harm producers in the export market, that company may be accused of:

dumping

A South Korean smartphone company plans to launch a new phone at a very high price point to attract early adopters and position it as a premium product. Which pricing strategy are they using?

Price Skimming