Gray marketing is diverting imported products meant

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Reference no: EM132218286

Gray Marketing’ is diverting imported products meant for one market at lower prices and reselling them at higher profits in other markets. This happens in many industries, including pharmaceuticals, apparel, high-tech electronics, auto parts, luxury goods, textbooks, cosmetics and tobacco. The designer sweater you bought at Marshalls or TJ Maxx most likely got into those stores through gray market trading. Although U.S. federal law prohibits importing prescription drugs from abroad, the same is not true in other countries. For example, gray traders purchase pharmaceutical drugs in poorer countries and resell them in the United Kingdom or Sweden, where higher prices garner profits for the traders. In fact, parallel importing of most products is legal, and some experts claim that it’s just the free market working. In some cases, though, counterfeit goods are mixed in with the legitimate brands.

a) Learn more about this phenomenon by quick online research (if necessary). Who receives value in such transactions? Who loses value? Should the ‘government’ step in? On whose side?

b) How are manufacturers dealing with this problem?

Reference no: EM132218286

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