Gray (or parallel) markets are markets where legitimate (as opposed to counterfeit) trademarked goods are distributed and sold through unauthorized channels. Many U.S. manufacturers license their technology and BRANDS to companies in other countries. If there are significant differences in the price of domestically made goods and the same PRODUCT made under license by a foreign manufacturer, it can encourage the transshipment of the foreignmade product back into the U.S. market. For example, in the 1990s when the Mexican peso fell against the dollar (see PESO CRISIS), the price of consumer products like Colgate toothpaste made in Mexico was approximately onethird the price of the same product made in the United States. Similarly, Parker Pen authorized the PRODUCTION and sale of their pens to a Japanese manufacturer. If those pens are then shipped back into the U.S. market, they compete with the American-manufactured items. Most companies, in their CONTRACTs with international manufacturers, prohibit the shipment of products made under license back into the licensing company’s home market, but it is debatable whether such actions violate U.S. importation, TRADEMARK, PATENT, or COPYRIGHT laws. Sometimes consumer DEMAND creates gray markets. When Canon shifted supply of its copiers for the Russian market from factories in Japan to a company factory in China, sales plummeted. Canon dealers in Russia found gray marketers willing to ship them copiers made in Japan. Sometimes gray markets are created by company attempts at MARKET SEGMENTATION, in which marketers try to divide the total market into relatively homogeneous groups and charge a higher price to those groups who are willing and able to pay more for the product. Markets where the higher price is charged encourage ARBITRAGE, buying the product in the lower-priced market and reselling it in the higherpriced market. With the speed and access of INTERNET communications, price differentials are quickly recognized, creating opportunities for gray marketers. Gray markets have even developed for computer chips, providing computer manufacturers alternatives to the authorized dealer when looking for components. Gray markets differ from markets for counterfeit products in the fact that they are made under license from the original company. Gray markets are not “black markets” because they are not trading illegal products. While price differences are the major factor in creating gray markets, customers concerned with service and warranties are not likely to purchase gray market products. Because these products are purchased through unauthorized marketing channels, service and warranties are difficult to obtain. One study found that gray markets benefit manufacturers because sales in those markets are mostly to price-sensitive customers who would not have purchased their product through the authorized and higher-priced channel.