Exam 8: Setting a Price for the Service Rendered

Short-term profitability and maximization of revenues from assets should always be the driving force behind services' pricing decisions.

The net profit per unit is the difference between the price charged to service customer and the total cost per unit.

Describe the relationship between pricing objectives and pricing strategies.

A revenue perspective on pricing is sometimes referred to as a customer-based approach.

You and a friend were comparing prices for the same service and noticed that wide price discrepancies existed.Explain why these wide price variations may exist for the same service.

Your manager recently overheard a conversation regarding price bundling and wanted to know more about it.He asked you to find out what is meant by price bundling and why services would want to use it.What would you report to your manager?

COMPLETION QUESTIONS Yield Management Systems Profit-Oriented Volume-Oriented Value Price/Demand Elasticity Fixed Variable Contribution Margin Breakeven Point Price Bundling Pure Price Bundling -____________ pricing objectives stress processing large numbers of customers or their possessions.

COMPLETION QUESTIONS Yield Management Systems Profit-Oriented Volume-Oriented Value Price/Demand Elasticity Fixed Variable Contribution Margin Breakeven Point Price Bundling Pure Price Bundling -The perceived value of a service is reflected in the __________ for the offering.

The difference between the price charged to the service customer and the total (variable + allocated fixed)costs attributed to the service is called

The breakeven point is calculated by dividing the sum of

An operations perspective on pricing is sometimes referred to as a cost-based approach.

A price elastic service is one whose demand is not significantly affected by price changes.

A profit-oriented pricing objective stresses processing large number of customers or their possessions.

The variable costs of producing a service are much smaller proportionately to the total costs of the offering than is typical of packaged goods.