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Scenario 19

question 125

Multiple Choice

Scenario 19.2 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 19.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem?

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Definitions:

Investment

The allocation of resources, such as capital or time, in the hope of generating future profits or benefits.

Capacity Utilization Rate

The percentage of a firm's total production capacity that is actually being used in production.

Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Issuing Stock

The process by which a company distributes shares to investors in order to raise capital for business expansion or other financial needs.

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