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If you are a manufacturer do you necessarily want the gray market to cease to...

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belinda2378 | Student, Undergraduate | (Level 1) eNoter

Posted May 21, 2012 at 9:03 PM via web

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If you are a manufacturer do you necessarily want the gray market to cease to exist?  why?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted May 21, 2012 at 9:11 PM (Answer #1)

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As the manufacturer, you do not necessarily care if there is a gray market in your products in some country.  The way in which the products get to the country may not concern you that much.  You will be happy to sell the products regardless of how they get to the country in question.  

If the price of your good is very high in one country (Country A) and lower in another (Country B), the presence of a gray market might help you get more market share in Country A.  Unauthorized dealers will buy your product in Country B and resell it in Country A.  Your authorized dealers in Country A will be unhappy, but you will probably not mind because the gray market is allowing more of your products to be sold in Country A than would otherwise be possible.

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