Question 1

Describe the concept of price elasticity and draw a graph comparing consumers with high and low elasticity.

Accepted Answer

Price elasticity refers to the amount of impact price has on sales. Consumers are said to be price elastic if small changes in price result in large changes in sales. Consumers are said to be price inelastic if price has little effect on sales. Figure 6.8 depicts a comparison of these two groups.

Question 2

Which of the following is an example of a physical cost?

Accepted Answer

A)  Mental effort 
B)  Fatigue 
C)  Feelings of inadequacy 
D)  Social Embarrassment 
E)  Perceived Risk 
A)  Mental effort 
B)  Fatigue 
C)  Feelings of inadequacy 
D)  Social Embarrassment 
E)  Perceived Risk B

Question 3

Describe how airlines utilize revenue management to enhance profitability.

Accepted Answer

Revenue management involves setting prices according to predicted demand levels among different market segments. Airlines utilize massive databases on past travel to forecast demand and attempt to allocate optimal capacity to the least price sensitive segments. For example, business travelers pay higher prices for booking flights closer to travel dates, whereas vacationers book in advance. Higher demand travel dates also garner higher prices.

Question 4

What are two examples of situations that increase price competition?

Accepted Answer

Increasing number of competito

Question 5

Which of the following intensifies price competition?

Accepted Answer

A)  Non-price-related costs of using competing alternatives are high. 
B)  Wider distribution of competitor and or substitution offers. 
C)  Personal relationships have been established. 
D)  Switching costs are high. 
E)  Customer need for time and location specificity. 
A)  Non-price-related costs of using competing alternatives are high. 
B)  Wider distribution of competitor and or substitution offers. 
C)  Personal relationships have been established. 
D)  Switching costs are high. 
E)  Customer need for time and location specificity.

Question 6

Customers often incur significant financial costs in searching for, purchasing, and using a service, above and beyond the purchase price paid to the supplier.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT listed in the chapter as a firm that uses online reverse auctions?

Accepted Answer

A)  Priceline.com 
B)  Hotwire.com 
C)  eBay.com 
D)  Lowestfare.com 
E)  All of the above use online reverse auctions. 
A)  Priceline.com 
B)  Hotwire.com 
C)  eBay.com 
D)  Lowestfare.com 
E)  All of the above use online reverse auctions.

Question 8

____________ are services sold at less than full cost to attract customers, who will then be tempted to buy profitable service offerings from the same organization in the future.

Accepted Answer

A)  Benign followers 
B)  Unit packages 
C)  Loss leaders 
D)  Cost providers 
E)  Contracts 
A)  Benign followers 
B)  Unit packages 
C)  Loss leaders 
D)  Cost providers 
E)  Contracts

Question 9

Which company is an example of dynamic pricing in the Internet access business?

Accepted Answer

A)  AOL 
B)  easyInternetcafe 
C)  Vox1 
D)  Earthlink 
E)  Barbados Internet Forums 
A)  AOL 
B)  easyInternetcafe 
C)  Vox1 
D)  Earthlink 
E)  Barbados Internet Forums

Question 10

Name two e-tailers that utilize traditional auction models.

Accepted Answer

The answer of Name two e-tailers that utilize traditional auction...

Question 11

What are the four distinct categories of non-monetary costs?

Accepted Answer

Time costs, physical

Question 12

____________ is defined as the sum of all the perceived benefits minus the sum of all the perceived costs of service.

Accepted Answer

A)  Net value 
B)  Consumer surplus 
C)  Gross value 
D)  Moderate value 
E)  Consumer demand 
A)  Net value 
B)  Consumer surplus 
C)  Gross value 
D)  Moderate value 
E)  Consumer demand

Question 13

Shopbots help consumers combat dynamic pricing online.

Accepted Answer

A) True 
 B)False

Question 14

Amazon.com is a good example of a firm that aggravated its customers with dynamic pricing.

Accepted Answer

A) True 
 B)False

Question 15

Because quality is subjective, all customers have the expertise to assess the quality and value they receive.

Accepted Answer

A) True 
 B)False

Question 16

What is price customization?

Accepted Answer

Charging different c

Question 17

Give an example of a tradeoff between monetary and non-monetary costs associated with patronizing a dental clinic.

Accepted Answer

Paying a higher pric

Question 18

The only function that brings operating revenues into the organization is ____________.

Accepted Answer

A)  marketing 
B)  management 
C)  finance 
D)  accounting 
E)  information technology 
A)  marketing 
B)  management 
C)  finance 
D)  accounting 
E)  information technology

Question 19

Draw a graph of the relationship between price per seat on an airline and demand for seats. Label each price bucket.

Accepted Answer

The answer of Draw a graph of the relationship between...

Question 20

Relate fairness perceptions to DVD rental late fees.

Accepted Answer

Late fees for DVD rentals shou

Describe the concept of price elasticity and draw a graph comparing consumers with high and low elasticity.

Which of the following is an example of a physical cost?

Describe how airlines utilize revenue management to enhance profitability.

What are two examples of situations that increase price competition?

Which of the following intensifies price competition?

Customers often incur significant financial costs in searching for, purchasing, and using a service, above and beyond the purchase price paid to the supplier.

Which of the following is NOT listed in the chapter as a firm that uses online reverse auctions?

____________ are services sold at less than full cost to attract customers, who will then be tempted to buy profitable service offerings from the same organization in the future.

Which company is an example of dynamic pricing in the Internet access business?

Name two e-tailers that utilize traditional auction models.

What are the four distinct categories of non-monetary costs?

____________ is defined as the sum of all the perceived benefits minus the sum of all the perceived costs of service.

Shopbots help consumers combat dynamic pricing online.

Amazon.com is a good example of a firm that aggravated its customers with dynamic pricing.

Because quality is subjective, all customers have the expertise to assess the quality and value they receive.

What is price customization?

Give an example of a tradeoff between monetary and non-monetary costs associated with patronizing a dental clinic.

The only function that brings operating revenues into the organization is ____________.

Draw a graph of the relationship between price per seat on an airline and demand for seats. Label each price bucket.

Relate fairness perceptions to DVD rental late fees.

New Perspectives on Marketing in the Service Economy

Consumer Behavior in a Services Context

Positioning Services in Competitive Markets

Developing Service Products: Core and Supplementary Elements

Distributing Services Through Physical and Electronic Channels

Promoting Services and Educating Customers

Designing and Managing Service Processes

Balancing Demand and Productive Capacity

Crafting the Service Environment

Managing People for Service Advantage

Managing Relationships and Building Loyalty

Complaint Handling and Service Recovery

Improving Service Quality and Productivity

Striving for Service Leadership

Filters

Exam 6: Setting Prices and Implementing Revenue Management

Describe the concept of price elasticity and draw a graph comparing consumers with high and low elasticity.

Which of the following is an example of a physical cost?

Describe how airlines utilize revenue management to enhance profitability.

What are two examples of situations that increase price competition?

Which of the following intensifies price competition?

Customers often incur significant financial costs in searching for, purchasing, and using a service, above and beyond the purchase price paid to the supplier.

Which of the following is NOT listed in the chapter as a firm that uses online reverse auctions?

____________ are services sold at less than full cost to attract customers, who will then be tempted to buy profitable service offerings from the same organization in the future.

Which company is an example of dynamic pricing in the Internet access business?

Name two e-tailers that utilize traditional auction models.

What are the four distinct categories of non-monetary costs?

____________ is defined as the sum of all the perceived benefits minus the sum of all the perceived costs of service.

Shopbots help consumers combat dynamic pricing online.

Amazon.com is a good example of a firm that aggravated its customers with dynamic pricing.

Because quality is subjective, all customers have the expertise to assess the quality and value they receive.

What is price customization?

Give an example of a tradeoff between monetary and non-monetary costs associated with patronizing a dental clinic.

The only function that brings operating revenues into the organization is ____________.

Draw a graph of the relationship between price per seat on an airline and demand for seats. Label each price bucket.

Relate fairness perceptions to DVD rental late fees.

New Perspectives on Marketing in the Service Economy

Consumer Behavior in a Services Context

Positioning Services in Competitive Markets

Developing Service Products: Core and Supplementary Elements

Distributing Services Through Physical and Electronic Channels

Promoting Services and Educating Customers

Designing and Managing Service Processes

Balancing Demand and Productive Capacity

Crafting the Service Environment

Managing People for Service Advantage

Managing Relationships and Building Loyalty

Complaint Handling and Service Recovery

Improving Service Quality and Productivity

Striving for Service Leadership

Filters