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Marketing Final Exam

Blooms application 49 a price tactic that requires

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Unformatted text preview: CSB Reflective MSC: BLOOMS Application 49. A price tactic that requires the purchaser to absorb the freight costs from the shipping point is called _____. In this case, the farther buyers are from sellers, the more they pay, because transportation costs generally increase with the distance merchandise is shipped. a. basing-point pricing b. zone pricing c. uniform delivered pricing d. freight absorption pricing e. FOB origin pricing ANS: E This is the definition of FOB origin pricing. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing 50. The term FOB is an acronym for: a. b. c. d. e. ANS: A OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge free on board fee on buyer first on board freight on board freight origin buyer FOB means “free on board” and is called FOB origin pricing or FOB shipping point. It is a price tactic that requires the buyer to absorb the freight costs from the shipping point. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge 51. With _____, the seller pays the actual freight charges and bills every purchase with an identical, flat freight charge. a. uniform delivered pricing b. zone pricing c. FOB origin pricing d. freight absorption pricing e. basing-point pricing ANS: A If the marketer wants total costs, including freight, to be equal for all purchasers of identical products, the firm will adopt uniform delivered pricing, or “postage stamp” pricing. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing 52. Uniform delivered pricing enables a firm to: a. b. c. d. e. OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Knowledge charge each customer the actual cost of shipping its products stir up price competition between buyers maintain a nationally advertised price discriminate in favor of buyers that are geographically closer to the seller charge each customer its fair share of the cost of shipping ANS: C With uniform delivered pricing, all customers will pay the same price regardless of their location. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing 53. Uniform delivered pricing: a. b. c. d. e. ANS: B OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension creates no geographic price discrimination is sometimes called “postage stamp” pricing is prevalent in the steel, cement, corn oil, and lead industries is common where freight costs are a large portion of total costs is calculated from regional base points With uniform delivered pricing, all customers pay the same amount for freight regardless of location. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACSB Reflective MSC: BLOOMS Comprehension 54. L.L. Bean charges all customers the same flat freight rate. It uses: a. FOB origin pricing b. zone pricing c. freight absorption pricing d. basing-point pricing e. uniform delivered pricing ANS: E In uniform delivery pricing, all customers are charged the same flat freight rate. PTS: 1 REF: 327 Thinking KEY: CB&E Model Pricing OBJ: 20-3 TOP: AACS...
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