CLEP Marketing

Answer: B - GrowRight is an international organic food distributor with subsidiaries in over 7 countries. The company adds a 1.5% fee to full costs incurred by subsidiaries to cover marketing and development in what is referred to as a cost-based transfer pricing strategy. This strategy is utilized by international corporations to recover the cost of the product reaching the subsidiary, as well as marketing costs. This additional amount added to a full cost often covers logistical and research activities as well. In transfer pricing, local taxes and expenses will also be added as part of the strategy.