Question

Which of the following statements is true of geographic pricing? Group of answer choices Freight absorption pricing is a tactic that requires a buyer to absorb the freight costs from the shipping point. Postage stamp pricing is adopted when the marketing manager wants total costs to be equal for all purchasers of identical products. With basing-point pricing, a seller designates a location as a basing point so that all buyers are not charged the freight cost from that point. Uniform delivered pricing divides the United States into segments or zones and charges a flat freight rate to all customers in a given zone.

Answer 1

Geographic pricing is a strategy where prices are determined based on location. Uniform delivered pricing charges a flat rate within specific zones, which is the true statement among the given options.

Step-by-step explanation:

The concept in question is geographic pricing, which is a strategy used by companies to determine the prices for their products based on the geographic location of the customer. The true statement regarding geographic pricing is that only the uniform delivered pricing strategy divides the United States into segments or zones and charges a flat freight rate to all customers in a given zone.

In contrast, freight absorption pricing involves the seller absorbing all or part of the freight charges to get the competitive advantage or to penetrate distant market areas. Postage stamp pricing, also known as flat-rate pricing, means charging a single price to all customers regardless of location, thereby making total costs equal for all purchasers of identical products. Lastly, with basing-point pricing, a seller designates a location as a 'basing point' and charges all customers the freight costs from that point, regardless of the actual shipping location.

Answer 2

The correct answer is letter "B": Postage stamp pricing is adopted when the marketing manager wants total costs to be equal for all purchasers of identical products.

Step-by-step explanation:

Geographic pricing refers to pricing strategies companies carry out to reduce the freight costs moreover for distant customers. Among those strategies we can identify: Free On Board (FOB) origin pricing, uniform delivered pricing or postage stamp pricing, zone pricing, freight absorption pricing, basing-point pricing, single-price tactic, and flexible pricing.

By implementing postage stamp pricing the company will use standard delivery, freight and total cost pricing for every buyer purchasing identical products. What happens with this method is that the firm assumes part of the freight costs but send the buyers only a fixed freight cost.