What are the causes and solutions for parallel imports and their effect on price?
Parallel markets occur when products are imported into a country without the consent of the brand owner. They result from ineffective management of prices and lack of control, and come up when importers buy products from distributors in one country and sell them in another to distributors who are not part of the manufacturer's regular distribution system. The possibility of parallel markets occurs whenever price differences are greater than the cost of transportation between two markets. Solution to parallel markets is to keep tight and effective controls over its management.
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Pricing for International Markets
- What is demand elasticity?
- What factors influence international pricing?
- Which out of the four types of countertrade is the most beneficial to the seller?
- Why is counter trade increasing?
- Why do governments scrutinize transfer pricing arrangements so carefully?
- What are the alternative objectives in setting transfer prices?
- In what various ways does the government set prices? Why do they engage in such activities?
- Why has dumping become such an issue in recent years?
- How can a marketer adjust prices to accommodate exchange-rate fluctuations?
- Do value-added taxes discriminate against imported goods?
- Why are companies generally not "allowed" to perform price fixing, but governments are?
- How can the problem of price escalation be counteracted?
- What is transfer pricing?
- What is dumping?
- What is price escalation?
- What is skimming?
- What is parallel imports?
- What are the causes of price escalation? Do they differ for exports and goods produced and sold in a foreign country?
- Why is it so difficult to control consumer prices when selling overseas?