Scenario 12.2
Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China.
-Refer to Scenario 12.2. If BASF were to price its product in barrels from the factory, before it is loaded on the carrier, this would be an example of ____ pricing.

Question

Quizplus · Accepted Answer

F.O.B. factory pricing means that the price of the product includes all costs up to the point of loading it onto the carrier at the factory. This type of pricing is appropriate for a product like the rubberized coating, which is produced by BASF and then transported to its customers in China. By pricing the product F.O.B. factory, BASF would be responsible for shipping the product to the customer, while the customer would be responsible for arranging for the carrier to transport the product from the factory to its final destination.

Scenario 12.2 Use the Following to Answer the Questions