Final answer:
The extension or ethnocentric pricing strategy offers competitive advantage, profit maximization, and better control over pricing.
Step-by-step explanation:
The advantages of the extension or ethnocentric pricing strategy are:
- Competitive Advantage: By setting prices higher than local competitors, a company can position itself as a premium brand and attract customers looking for quality.
- Profit Maximization: If the company has a strong brand image and customers are willing to pay a premium, the extension or ethnocentric pricing strategy can lead to higher profit margins.
- Better Control: The company can have better control over pricing, ensuring consistency across different markets.
Overall, the extension or ethnocentric pricing strategy can help a company maintain a strong brand image and maximize profits.