Question 1

Semi-variable costs are those that vary or fluctuate as a direct consequence of what is produced.

Accepted Answer

A) True 
 B)False  False

Question 2

In business, it is not possible to distinguish between desirable and undesirable customers, therefore all customers are equally desirable.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following will assist in reconciling yield management with customer satisfaction and good will?

Accepted Answer

A) Using bundling to 'hide' discounts 
B) Using service recovery to compensate for overbooking 
C) Building in 'loyalty multipliers' for regular customers 
D) Designing price schedules that are clear and fair 
E) All of the above 
A) Using bundling to 'hide' discounts 
B) Using service recovery to compensate for overbooking 
C) Building in 'loyalty multipliers' for regular customers 
D) Designing price schedules that are clear and fair 
E) All of the above E

Question 4

A business model is the mechanism whereby, through effective pricing, sales are transformed into revenues, costs are covered and __________ for the business owners.

Accepted Answer

A) value is created 
B) costs are marginal 
C) marketing is created 
D) pricing is scheduled 
E) a value proposition is developed 
A) value is created 
B) costs are marginal 
C) marketing is created 
D) pricing is scheduled 
E) a value proposition is developed

Question 5

How do we compute net value?

Accepted Answer

A) Total perceived benefits minus total perceived costs 
B) Total benefits minus fixed costs 
C) Total benefits minus variable costs 
D) Total benefits minus semi-variable costs 
E) Total benefits minus marginal costs 
A) Total perceived benefits minus total perceived costs 
B) Total benefits minus fixed costs 
C) Total benefits minus variable costs 
D) Total benefits minus semi-variable costs 
E) Total benefits minus marginal costs

Question 6

Which of the following best describes semi-variable costs?

Accepted Answer

A) Costs that fluctuate with what is consumed but may not be linked directly to customer demand and the volume of services provided 
B) Costs that do not fluctuate with what is consumed but may be linked directly to customer demand and the volume of services provided 
C) Costs that fluctuate even if no services are provided and may be linked directly to economic environment 
D) Costs that fluctuate with what is consumed and may be linked directly to customer demand and the volume of services provided 
E) Costs that do not fluctuate with what is consumed and may not be linked directly to customer demand and the volume of services provided 
A) Costs that fluctuate with what is consumed but may not be linked directly to customer demand and the volume of services provided 
B) Costs that do not fluctuate with what is consumed but may be linked directly to customer demand and the volume of services provided 
C) Costs that fluctuate even if no services are provided and may be linked directly to economic environment 
D) Costs that fluctuate with what is consumed and may be linked directly to customer demand and the volume of services provided 
E) Costs that do not fluctuate with what is consumed and may not be linked directly to customer demand and the volume of services provided

Question 7

Explain the categories of pricing objectives open to a service organisation and discuss when each would be appropriate.

Accepted Answer

Pricing objectives for a service organiz

Question 8

A customer who perceives high levels of __________worries that their choice of service provider may not meet with the approval of family or friends.

Accepted Answer

A) time and effort cost 
B) performance risk 
C) psychological risk 
D) social cost 
E) financial cost 
A) time and effort cost 
B) performance risk 
C) psychological risk 
D) social cost 
E) financial cost

Question 9

A customer who perceives high levels of __________ risk worries about how comfortable and secure they will feel with a particular service provider.

Accepted Answer

A) temporal 
B) performance 
C) psychological 
D) social 
E) financial 
A) temporal 
B) performance 
C) psychological 
D) social 
E) financial

Question 10

The demand for a service is said to be price-elastic when a change in price has little effect on sales.

Accepted Answer

A) True 
 B)False

Question 11

Service firms often have greater pricing flexibility.Using the example of a bus service, discuss the reasons and management implications of this.

Accepted Answer

Service firms, such as bus services, oft

Question 12

Pricing information is less important for services _______ in _______ as customers evaluation is likely made with reference to quality concerns.

Accepted Answer

A) low; value 
B) high; value 
C) high; criticality 
D) low; criticality 
E) high; cost 
A) low; value 
B) high; value 
C) high; criticality 
D) low; criticality 
E) high; cost

Question 13

Which of the following objectives might a service organisation pursue?

Accepted Answer

A) Revenue-orientated objectives 
B) User-oriented objectives 
C) Patronage-oriented objectives 
D) a and b 
E) a, b and c 
A) Revenue-orientated objectives 
B) User-oriented objectives 
C) Patronage-oriented objectives 
D) a and b 
E) a, b and c

Question 14

Which of the following is NOT a way that a marketer can increase the net value of the service?

Accepted Answer

A) Increasing the amount of time involved in service purchase, delivery and consumption 
B) Reducing any unwanted physical effort the customers may make to obtain the service 
C) Minimising unpleasant sensory experiences 
D) Minimising unwanted mental or psychological effort 
E) Reducing the amount of time involved in service purchase, delivery and consumption 
A) Increasing the amount of time involved in service purchase, delivery and consumption 
B) Reducing any unwanted physical effort the customers may make to obtain the service 
C) Minimising unpleasant sensory experiences 
D) Minimising unwanted mental or psychological effort 
E) Reducing the amount of time involved in service purchase, delivery and consumption

Question 15

Contribution is the difference between the variable cost and the price charged.

Accepted Answer

A) True 
 B)False

Question 16

Marketing's task in helping maximise ARGE involves all of the following except:

Accepted Answer

A) providing the sales force with specific sales target on specific dates for each segment 
B) providing guidelines for what prices to charge each segment at specific points in time 
C) identifying the principal market segments that might be attracted to service facilities 
D) forecasting the volumes of business that might be obtained from each segment at specific price levels 
E) monitoring price over time 
A) providing the sales force with specific sales target on specific dates for each segment 
B) providing guidelines for what prices to charge each segment at specific points in time 
C) identifying the principal market segments that might be attracted to service facilities 
D) forecasting the volumes of business that might be obtained from each segment at specific price levels 
E) monitoring price over time

Question 17

For many consumers, there is an implicit belief that the higher the cost of the service the more likely it will be that the service is of a high quality.

Accepted Answer

A) True 
 B)False

Question 18

An accurate definition of yield management is, 'a method to sell the right inventory unit to the right type of customer at the right time and for the right price'.

Accepted Answer

A) True 
 B)False

Question 19

Price setting is totally within the company's control and is not affected by legal, regulatory or ethical considerations.

Accepted Answer

A) True 
 B)False

Question 20

A florist which specialises in wedding arrangements is reassessing their pricing.Using the three foundations of pricing strategy, what advice would you give them?

Accepted Answer

The three foundations of pricing strateg

Semi-variable costs are those that vary or fluctuate as a direct consequence of what is produced.

In business, it is not possible to distinguish between desirable and undesirable customers, therefore all customers are equally desirable.

Which of the following will assist in reconciling yield management with customer satisfaction and good will?

A business model is the mechanism whereby, through effective pricing, sales are transformed into revenues, costs are covered and __________ for the business owners.

How do we compute net value?

Which of the following best describes semi-variable costs?

Explain the categories of pricing objectives open to a service organisation and discuss when each would be appropriate.

A customer who perceives high levels of __________worries that their choice of service provider may not meet with the approval of family or friends.

A customer who perceives high levels of __________ risk worries about how comfortable and secure they will feel with a particular service provider.

The demand for a service is said to be price-elastic when a change in price has little effect on sales.

Service firms often have greater pricing flexibility.Using the example of a bus service, discuss the reasons and management implications of this.

Pricing information is less important for services _ in _ as customers evaluation is likely made with reference to quality concerns.

Which of the following objectives might a service organisation pursue?

Which of the following is NOT a way that a marketer can increase the net value of the service?

Contribution is the difference between the variable cost and the price charged.

Marketing's task in helping maximise ARGE involves all of the following except:

For many consumers, there is an implicit belief that the higher the cost of the service the more likely it will be that the service is of a high quality.

An accurate definition of yield management is, 'a method to sell the right inventory unit to the right type of customer at the right time and for the right price'.

Price setting is totally within the company's control and is not affected by legal, regulatory or ethical considerations.

A florist which specialises in wedding arrangements is reassessing their pricing.Using the three foundations of pricing strategy, what advice would you give them?

Marketing in the service economy

Customer behaviour, culture and service encounters

Positioning services in competitive markets

Developing service products: core and supplementary service elements

Distributing services through physical and electronic channels

Balancing productive capacity and demand

Integrated services marketing communications

Managing people for service advantage

Crafting the service environment

Managing the customer service function

Customer satisfaction and service quality

Managing relationships and building loyalty

Handling customer complaints and managing service recovery

Filters

Exam 6: Understanding costs and developing pricing strategy

Semi-variable costs are those that vary or fluctuate as a direct consequence of what is produced.

In business, it is not possible to distinguish between desirable and undesirable customers, therefore all customers are equally desirable.

Which of the following will assist in reconciling yield management with customer satisfaction and good will?

A business model is the mechanism whereby, through effective pricing, sales are transformed into revenues, costs are covered and __________ for the business owners.

How do we compute net value?

Which of the following best describes semi-variable costs?

Explain the categories of pricing objectives open to a service organisation and discuss when each would be appropriate.

A customer who perceives high levels of __________worries that their choice of service provider may not meet with the approval of family or friends.

A customer who perceives high levels of __________ risk worries about how comfortable and secure they will feel with a particular service provider.

The demand for a service is said to be price-elastic when a change in price has little effect on sales.

Service firms often have greater pricing flexibility.Using the example of a bus service, discuss the reasons and management implications of this.

Pricing information is less important for services _______ in _______ as customers evaluation is likely made with reference to quality concerns.

Which of the following objectives might a service organisation pursue?

Which of the following is NOT a way that a marketer can increase the net value of the service?

Contribution is the difference between the variable cost and the price charged.

Marketing's task in helping maximise ARGE involves all of the following except:

For many consumers, there is an implicit belief that the higher the cost of the service the more likely it will be that the service is of a high quality.

An accurate definition of yield management is, 'a method to sell the right inventory unit to the right type of customer at the right time and for the right price'.

Price setting is totally within the company's control and is not affected by legal, regulatory or ethical considerations.

A florist which specialises in wedding arrangements is reassessing their pricing.Using the three foundations of pricing strategy, what advice would you give them?

Marketing in the service economy

Customer behaviour, culture and service encounters

Positioning services in competitive markets

Developing service products: core and supplementary service elements

Distributing services through physical and electronic channels

Balancing productive capacity and demand

Integrated services marketing communications

Managing people for service advantage

Crafting the service environment

Managing the customer service function

Customer satisfaction and service quality

Managing relationships and building loyalty

Handling customer complaints and managing service recovery

Filters

Pricing information is less important for services _ in _ as customers evaluation is likely made with reference to quality concerns.