Deck 10: Pricing Considerations in High-Tech Markets

Question 1

Legged stool)are:

A)costs,competition,creativity
B)cannibalization,costs,competition
C)cannibalization,competition,customers
D)costs,competition,customers
E)costs,company,customers

Answer 1

D

Question 2

The practice of offering derivative products and services at various price points to meet different customers' needs is called:

A)price lining
B)versioning
C)a and b
D)none of the above
E)all of the above

Answer 2

C

Question 3

Identify the technique Sega is utilizing when they charge an extremely low price for their "Play Station" and make up the lower margin on the base unit by higher margins on game sales.

A)captive product pricing
B)product bundle
C)smart pricing
D)subscription pricing
E)price lining

Answer 3

C

Question 4

All of the following statements are true except:

A)different customers in different segments value the same product differently
B)different segments may require different levels of service
C)customer-oriented pricing requires that companies manage their customers on sales,not profits
D)firms should track the profitability of different customer accounts
E)companies may actually decide not to serve some customers

Question 5

____________ customers want a standard level of service with basic inspections and periodic inspections.

A)basic needs
B)risk avoider
C)hand holder
D)intermediate needs
E)advanced needs

Question 6

Tech pricing environment,Moore's Law states that:

A)firms must price at the high end to recover R&D investments
B)firms must price at the high end to signal high quality products
C)product life cycle lengthens as technology factors increase
D)improvements in technology double product performance with no increase in price
E)introduction of product versions with better price performance ratios creates upward pressure on prices

Question 7

Which of the following are descriptive of smart pricing?

A)dynamic pricing
B)uses data on customer shopping habits
C)allows a company to identify customer preferences
D)adjusts prices real-time on the Internet
E)all of the above

Question 8

Target costing involves all of the following except:

A)determine what price customers are willing to pay for a product
B)subtract all the target margins that supply-chain members want to take off the retail price
C)arrive at a target cost by deducting target margins from the price customers are willing to pay
D)target certain business units for cost reductions
E)design and develop the product so that it meets target cost requirements

Question 9

An experience curve:

A)captures the per-unit cost declines in production every time the company's accumulated manufacturing volume doubles
B)creates cost savings arise from the combined effects of learning,volume,and specialization
C)a and b
D)indicates professional development growth of employees
E)none of the above

Question 10

Sales service?

A)auction
B)uniform pricing based on a fixed percentage of the sales price of the equipment
C)negotiate a custom service contract for each customer
D)price service contracts according to service requirements of different customer segments
E)none of the above

Question 11

____________ customers want to avoid paying big bills but don't care as much about response times.

A)basic needs
B)risk avoider
C)hand holder
D)intermediate needs
E)advanced needs

Question 12

____________ customers need high levels of service,often with quick and reliable response times,and are willing to pay for the privilege.

A)basic needs
B)risk avoider
C)hand holder
D)intermediate needs
E)advanced needs

Question 13

All of the following are solutions to the technology paradox except:

A)keep costs falling faster than prices
B)mass customization
C)find new uses for products
D)develop long-term relationships with customers
E)price controls

Question 14

The total cost of ownership includes:

A)price paid
B)financing fees
C)installation,repair,and maintenance costs
D)operating costs
E)all of the above

Question 15

All of the following are true about price promotions except:

A)these are permanent discounts
B)they induce trial
C)they overcome consumer resistance to adoption
D)they attract new customers who buy more over time
E)they could have a negative impact on brand equity

Question 16

The steps in customer oriented pricing are beneficial in that they:

A)help distinguish between "carriage trade" and "bargain basement" customers
B)serve as a decision-making framework for pricing in the high-tech environment
C)allow the marketer to make a quick and easy pricing decision
D)provide the marketer with a greater understanding of the customer's cost limitation
E)ensure profitability based on cost versus price

Question 17

The technology paradox is characterized by:

A)increase in high technology companies despite stagnant demand
B)the capability of businesses to thrive despite the rapid pace of price decline
C)increase in technology jobs despite the decrease in wages
D)increasing volumes accompanied by increasing prices
E)the recent decline in tech stocks despite increased interest in technology sector

Question 18

Mass customization is:

A)serving the mass market with standard products
B)serving the mass market with products tailored to individuals
C)serving different segments with the same product
D)serving different segments with different products
E)none of the above

Question 19

The approach by a firm to give away a base product and make money on the complementary products required to make the base product useful is called:

A)installed base pricing
B)no alternative pricing
C)captive product pricing
D)monopolistic pricing
E)predatory pricing