Final answer:
Gray markets can lead to increased competition, brand dilution, and decreased customer loyalty, but they do not typically result in an increased market share for the original manufacturer.
Step-by-step explanation:
Gray markets can have significant implications for global marketers. An increase in competition occurs when unauthorized sellers create a parallel import market with lower prices. This can lead to brand dilution, where the perceived value of the brand decreases due to the presence of cheaper products on the market. Additionally, gray markets may erode customer loyalty as consumers may opt for the cheaper products sold outside of official channels.
However, gray markets do not generally lead to an increased market share for the original manufacturer; instead, the market share is segmented between official and unofficial sales, potentially diminishing brand equity and the manufacturer's control over the marketing mix, including pricing, distribution, and customer service. Global marketers have to consider all these factors when dealing with gray market issues, which can have long-term impacts on business success and market position.