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Gray Marketing - Trademark, Pricing or Distribution Issue?

1. Gray marketing; is it a trademark issue, a pricing issue, or a distribution issue?

2. The Alliance for Gray Market and Counterfeit Abatement has as its primary purpose to "mitigate gray marketing and counterfeiting of high-technology products" Is it appropriate to equate the two? Are the arguments by this industry coalition convincing?

3. What factors make product testing more complicated in the international marketplace?

Solution Preview

1. Gray marketing is distribution of goods that are legitimately imported from abroad and carry the original brand name but are sold at significant discounts outside of manufacturer's normal channels of distribution. Gray marketing is an arbitrage where marketers buy goods from markets where they are priced lower and sell them in higher priced markets. The more is the price difference between different markets, more is the profit. These marketers obtain excess inventory from authorized dealers who are unable to sell the whole lot and then trade them at discounts outside the original distribution channel. Hence it is a ...

Solution Summary

Trademark, pricing and distribution issues are examined for Gray Marketing. The factors which make product testing more complicated in the international marketplace is determined.