The sales manager for Tetsu, Inc., a Japanese maker of electronic components has just returned from the very price-sensitive USA market, searching for an exclusive distributor. The most promising USA prospect insists on a markup of 20% based on Tetsu’s selling price. In Japan, Tetsu is used to typical markup of 20% based on their distributor’s selling price to the distributor’s customers. What would you recommend, if Tetsu’s objective is a very competitive price, i.e., lower the USA exclusive distributor selling price the better?
a. Abandon the USA market and intensify operations in China
b. Accept the USA distributor demand. It is even better for Tetsu compared to Japan
c. Appeal to the USA Government to intervene
d. Appeal to the Japanese Government to intervene
e. Reject the USA distributor terms which are worse for Tetsu compared to Japan