International Price Setting (Scenario)

question 11

Multiple Choice

International Price Setting (Scenario)
The Comfy Couch Corporation (CCC) is a leading American manufacturer of sofas, sectionals, and lounge chairs. Managers from the U.S.-based firm recently met a London retailer who expressed an interest in selling CCC lounge chairs in his stores. The retailer sells a number of different furniture brands in his stores, so CCC managers need to price their furniture appropriately if the firm is to be competitive in the European market.
-If CCC managers employ rigid cost-plus pricing they would most likely be disadvantaged because ________.

• A) rigid cost-plus pricing often fails to account for local market conditions
• B) through rigid cost-plus pricing, added costs of doing business abroad cannot be adjusted
• C) rigid cost-plus pricing overly focuses on the prevailing conditions in the local markets
• D) rigid cost-plus pricing is primarily driven by buyer demand in the local markets

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Definitions:

Representative Sampling

A method in statistics where a small subset of a population is chosen to accurately reflect the characteristics of the whole population.

Self-Report Bias

Refers to the bias that occurs when participants in research projects over or under-report behaviors or attitudes due to misremembering, misunderstanding, or wanting to present themselves in a favorable light.

Experimenter Bias

A process where the scientists performing the research influence the results, consciously or unconsciously, in order to portray a certain outcome.

Descriptive/Correlational Research

A research methodology that observes and describes behavior without influencing it, and may involve measuring the relationship between two or more variables.