Study GuideF_Final

Study GuideF_Final - BUS 363 Marketing Geographic...

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BUS 363 Marketing Chapter 19 Geographic Considerations* 4 alternatives for handling transportation costs in pricing policies: FOB Pricing: Free on board plant (FOB origin) : prices include no shipping charges. Buyer pays all freight charges. Seller only pays to load merch on carriers selected by the buyer. Legal title goes to buyer after loading. FOB origin-freight allowed (freight absorbed) : a price that permits buyers to subtract transportation expenses from their bills. Amount a seller receives for product varies with freight charged. Popular for those w/high fixed costs (allows for single price quote regardless of shipping expenses. Uniform-Delivered Pricing (postage stamp pricing) : 651 when a firm quotes the same price, incl transportation expenses to all buyers. Price quote includes charge averaged over all customers. Exact opposite of FOB origin pricing. Zone Pricing : 651 modifies a uniform-delivered pricing system by dividing the overall market into different zones and establishing a single price w/in each zone. Main advantage: simplified administration helps seller compete in distant markets. USPS uses. By narrowing distances, greatly reduces phantom freight (amount by which average transportation charge exceeds actual cost of shipping). Basing-Point Pricing : 652 price of a product includes the list price at the factory + freight charges from the basing-pint city nearest the buyer. Freight charges are calculated from the basing point city, not from where they’re shipped. Pricing Policies
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Study GuideF_Final - BUS 363 Marketing Geographic...

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