Decision Point: Geographic Pricing Strategies

Now that you have a better understanding of some of the pricing strategies used for the Carry Tu product line, let's review other strategies that might not be applicable to designer bags but would definitely come into play with other products or commodities.

In the production of its bags, Carry Tu purchases handles, straps, fabric, zippers, and other components. Many of these components are sourced internationally, and each vendor has its own pricing strategies.

Match each description with the correct geographic pricing strategy and then click Submit.

FOB$-$origin pricing

Zone pricing

Basing$-$point pricing

Freight$-$absorption pricing

Uniform$-$delivered pricing

FOB$-$origin pricing DroppableFOB$-$origin pricing Droppable Zone pricing DroppableZone pricing Droppable Basing$-$point pricing DroppableBasing$-$point pricing Droppable Freight$-$absorption pricing DroppableFreight$-$absorption pricing Droppable Uniform$-$delivered pricing DroppableUniform$-$delivered pricing Droppable

Carry Tu buys pre$-$sewn plastic compartments for its satchel bags from a supplier in Vietnam that has multiple factories. Carry Tu pays freight from Hanoi, regardless of which in factory the plastic compartments were made.

Carry Tu buys the rigid bottom pieces for its overnight bags from a supplier in Bangladesh. The supplier charges the same price plus freight to all Carry Tu factories, regardless of their location.

Carry Tu buys zippers for its overnight and laptop bags from a supplier in India. Carry Tu is responsible for all freight charges.

Carry Tu buys sustainable fabric from a supplier outside of San Luis Obispo, California. The supplier pays all freight charges.

Carry Tu buys padded straps for its overnight bag from a supplier in South Carolina. If the straps are shipped to Carry Tu's North Carolina factory, the supplier charges one rate; if handles are shipped to Carry Tu's Missouri factory, the supplier charges more for shipping.