Which pricing strategy is most suitable for selling a high-cost, innovative item to wealthy, price-insensitive consumers? A. Penetration pricing B. Skimming pricing C. Targeting price-sensitive custom

The marketer is selling a high-cost, innovative item to wealthy, price-insensitive consumers.

• Penetration pricing is for mass markets and price-sensitive consumers.
• Skimming pricing involves setting a high initial price to capture the top segment of the market, which aligns with high-cost, innovative items and price-insensitive consumers.
• Targeting price-sensitive customers contradicts the description.
• Full-cost pricing is a cost-based method, but skimming is a more strategic approach for this specific market.

The final answer is $\boxed{\text{B. Skimming pricing}}$

minimize full costs and risks of setting up overseas operations.

• Greenfield investment and Acquisition involve significant capital outlay and high risk.
• Joint ventures share costs and risks but still require substantial commitment.
• Franchising typically involves lower capital investment and risk for the franchisor, as the franchisee bears much of the operational cost and risk.

The final answer is $\boxed{\text{B. Franchising}}$

• A. Host nation lowering tariffs would generally decrease the price.
• B. Transportation costs are an additional expense incurred when shipping goods internationally, leading to higher prices.
• C. Lowering distribution costs would generally decrease the price.

The final answer is $\boxed{\text{B. Transportation cost}}$

selling products abroad at a price lower than in the home market or below the cost of production.

• Reverse dumping is selling at a lower price in the home market.
• Price escalation refers to higher prices in foreign markets due to added costs.
• Skimming pricing is setting a high initial price.
• Dumping is precisely defined as selling products in a foreign country at a price below the price charged in the home market or below the cost of production.

The final answer is $\boxed{\text{D. Dumping}}$

Which is not a reason for an exporting nation to engage in dumping?

• A. To gain market share in the importing country: This is a common strategic reason for dumping.
• B. It helps the company to minimize its investment market share in the importing country: This statement is awkwardly phrased. If it means minimizing direct investment while still competing for market share through exports, it could be a reason. However, "minimize its investment market share" is contradictory.
• C. It helps to export country to clear their unsold inventory: Dumping is often used to offload surplus production.
• D. Encourage the local competition and industry in the importing country: Dumping is an anti-competitive practice that harms local competition, rather than encouraging it. This is the opposite of a reason for dumping.
• E. Helps an exporting nation to reap the benefits of economies of scale: Dumping can allow a company to increase production volume, leading to economies of scale.

Option D describes an outcome that is contrary to the purpose and effect of dumping.

The final answer is $\boxed{\text{D. Encourage the local competition and industry in the importing country.}}$

Which is not a purpose of international product standardization?

• A. If they think relatively homogenous market: Standardization is beneficial when markets are similar. This is a purpose.
• B. Economies of scale advantage: Standardization allows for mass production, reducing per-unit costs. This is a purpose.
• C. Creating consistent company and/or product: Standardization helps maintain brand image and product quality across different markets. This is a purpose.
• D. If the nation has differences in the standards: Differences in national standards are a barrier to standardization, not a purpose for it. If standards differ, products often need adaptation rather than standardization.

The final answer is $\boxed{\text{D. If the nation has differences in the standards}}$

The influence of the country where a product is made or designed on consumer perception.

• A. Import country: Refers to the country receiving goods.
• B. Country of origin effect: This term specifically describes how consumers' perceptions of a product are influenced by its country of origin (manufacture, assembly, or design).
• C. Country of manufacture: This is a component of the effect, not the name of the effect itself.
• D. Global product: A product marketed worldwide.

The final answer is $\boxed{\text{B. Country of origin effect}}$