Exam 6: Setting Prices and Implementing Revenue Management

Customers will often pay more for services than they think they are worth.

Relate fairness perceptions to DVD rental late fees.

Yield management computers can determine who is likely to not show up or take other flights.

Psychological costs relate to unpleasant sensations affecting any of the five senses.

In credence services, the customers do not have the skills or knowledge to assess value.

Which of the following is NOT an example of price complication?

Firms do not need to consider post-purchase costs, as they occur after the firm has already secured a purchase.

Variable costs include all but which of the following?

Describe how rate fences should be used in a hair salon service.

Airlines, hotels, and car rental firms are not very good at varying prices in response to the price sensitivity and needs of different market segments.

Give an example of a service firm that uses service recovery to compensate for overbooking and discuss how the firm compensates.

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

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

Under what situations can price competitions be reduced?

Name two e-tailers that utilize traditional auction models.

Revenue management involves setting prices according to predicted demand levels among different market segments.

What are rate fences? Provide examples to aid your explanation.

Freight companies often use a combination of distance and weight or shape of parcel as a basis to price their services.

The pricing tripod consists of costs, competition and volume.

Firms that are always reacting to competitors' price changes run the risk of pricing higher than might really be necessary.