international marketing

I’m studying and need help with a Marketing question to help me learn.

1.Bribing foreign officials in order to gain contracts is considered permissible in the United States.

2.Companies pay huge sums of money to have their products located on high visibility store shelves. The physical space a product assumes on a store shelf is referred to as positioning.

3.One tactic a country might use to avoid international criticism is to use non-discriminatory regulations.

4. Marketers involve themselves in sponsorship marketing to reduce the costs of sponsorship and because it is easy to determine a return on investment.

5. A good way to respond to a crisis or generate publicity is to engage in cause-related marketing.

6. ___________ is what causes services to become custom made.

Price escalation can be mitigated by which of the following strategies?

Matsushita Electric Company has production and marketing divisions throughout the world. It produces a product in Ireland, where the tax rate is 12%, and transfers it to a marketing division in Japan, where the income tax rate is 40%. Assume Japan places an import tax of 10% on the product and that import duties are not tax deductible in either Ireland or Japan. The variable cost of the product is 200 Euros and the full cost is 400 Euros. Suppose the company can legally select a transfer price anywhere between the variable and the full cost.

  1. What transfer price should Matsushita use to minimize taxes? Explain why this is the tax-minimizing transfer price?

2. Compute the amount of taxes saved by using the transfer price in problem 1 instead of the transfer price that would result in the highest taxes.

10.Intel produces a moderate performance CDMA chip that competes with Qualcomm at the low end of the telecommunications market. Intel is gearing up to market the chip in Japan where distribution channels are known to be long and complex. For purposes of determining product cost and transfer pricing, Intel uses fully burdened cost-plus pricing. Assume Intel covers all transportation and import / export expenditures to the customer’s dock (DDP). Table 1 shows selected cost information for the product:

Table 1

Cost Element: Cost in $

  • Materials $ 0.50
  • Direct Labor $ 1.50
  • Indirect Overhead (400 %) $ 2.00
  • Depreciation $ 0.50
  • Miscellaneous overhead costs $ 0.50
  • Transportation Costs (Domestic) $ 0.25
  • Transportation Costs (International) $ 0.75
  • Duties Payable (on arrival in Japan 10 % of product mfg. cost w/o transport costs)

Intel (level 0) prices its product to its immediate distribution agent so that it can generate a 50% gross margin.

Table 2 shows a range of distribution levels in the Japanese markets with the associated required mark-ups.

Table 2:

Distribution Channel Level: Mark-up %

Level 0 (Intel) 100 %

Level 1 30 %

Level 2 20 %

Level 3 25 %

Level 4 15 %

Level 5 20 %

  1. What is the landed (DDP) cost at the level 1 distributor in Japan?

2. How many levels of distribution can this product support given the market price is $25.00 and the various levels need to make the annotated Mark-up percentages in Table 2?


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