What is a characteristic of the gray market?

The characteristic of the gray market is that it involves the sale of goods that are genuine and have a trademark, but they are distributed through unauthorized channels. This means that while the products are legitimate, they are being sold to consumers without the consent of the original manufacturer or authorized dealer. This often occurs when products are imported from countries where they are sold at a lower price, and then sold in markets where they will command higher prices, bypassing the official distribution network.

The gray market does not consist of counterfeit goods, which is why the other options relating to counterfeit items or illegal sales are not applicable. Instead, gray market goods typically maintain their brand value but exist outside the official sales processes. Therefore, understanding the dynamics of gray market transactions is essential for retailers and manufacturers to protect their brand integrity and pricing strategies.