Renting goodwill in international marketing channels: an analysis of pricing strategies and bargaining power.: An article from: Atlantic Economic Journal

This digital document is an article from Atlantic Economic Journal, published by Thomson Gale on September 1, 2005. The length of the article is 6678 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the author: This paper investigates the pricing decisions of foreign manufacturers in international markets within a bargaining framework with asymmetric information and the rental of goodwill. The key findings are: first, the foreign manufacturer follows a markup pricing strategy in which its gross margin and the quality premium over the domestic product are shared with the importer. Second, a manufacturer-importer contract occurs only when the manufacturer's bargaining power is within an admissible range which shrinks as transaction costs increase. Third, the domestic consumer will only purchase the foreign product if the importer's goodwill in the domestic market is sufficiently large to signal quality. The paper contributes to the literature on exchange relationships between foreign manufacturers and importers. (JEL C70, D40, FO)

Citation Details
Title: Renting goodwill in international marketing channels: an analysis of pricing strategies and bargaining power.
Author: Carlyle Farrell
Publication:Atlantic Economic Journal (Magazine/Journal)
Date: September 1, 2005
Publisher: Thomson Gale
Volume: 33 Issue: 3 Page: 285(12)

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