Deck 6: Pricing

Question 1

scoutski.com is what?

A) a one-stop shop where you can book your ski trip
B) a Japanese tour operator
C) a website for scouts who want to ski
D) all of the above

Answer 1

A

Question 2

Sarah Plaskitt's attitude towards joint promotions is that?

A) She loves them
B) She tends to avoid them
C) She is experimenting with them
D) She does not do any promotion

Answer 2

B

Question 3

When setting prices for its products, what must an organization aim to strike a balance between?

A) making a profit and gaining acceptance
B) covering costs and generating a profit
C) staying competitive and paying suppliers
D) maximizing revenue and minimizing costs

Answer 3

A

Question 4

What does the "price-quality trade-off" refer to?

A) a low price implies low quality
B) consumers are likely to pay a higher price for better quality products
C) quality can be sacrificed for price
D) price and quality are inversely related

Question 5

What term best describes the process of offering a product or service at a lower price than the price charged by the competition?

A) price competition
B) Price cutting
C) non-price competition
D) discount pricing

Question 6

What two variables affect the price elasticity of demand?

A) quantity sold and equilibrium price
B) quantity demanded and price
C) quantity supplied and quantity demanded
D) price and quantity supplied

Question 7

A hotel chain has decided to reduce its room rates for the coming long weekend. Within two days of announcing this to consumers, the hotel is fully booked for the weekend. This is an example of what?

A) an elastic supply curve
B) an inelastic supply curve
C) an elastic demand curve
D) an inelastic demand curve

Question 8

What is a difficulty with using a willingness to pay assessment?

A) It is difficult to control factors that will influence consumer decisions
B) It is difficult to find a method to measure the likelihood of consumers agreeing to pay a given price
C) There are no difficulties with this assessment method
D) Discrepancies between what people say they will do and their actual behaviour

Question 9

You have entered into a discussion with a fellow classmate regarding strategic approaches to pricing. She feels that premium pricing is unfair as it sets prices higher than necessary and is disadvantageous to consumers. Based on what you have read in the text, your response is:

A) to agree: premium pricing is unfair since it takes advantage of unsuspecting consumers
B) to disagree: premium pricing is fair provided that the customer receives the appropriate benefits
C) to agree: not only is premium pricing unfair to consumers, it also hurts smaller retailers who cannot risk charging such high prices
D) to disagree: if the government allows such pricing strategies to exist, it must be fair and acceptable

Question 10

When European budget carrier Ryanair announced a plan to offer $10 tickets for flights between London and New York, it was engaging in what type of pricing strategy?

A) break-even analysis
B) undercut pricing
C) cost-plus pricing
D) price lining

Question 11

When investigating prestige pricing, one must bear in mind that:

A) consumers will only pay the additional premium if they receive high quality
B) it is most successful for mature products or services
C) the ability to charge premium prices is often short-lived
D) the industry must be free of any competitors employing the same strategy

Question 12

An organization develops a new product with a short life cycle and recognizes that it will recover its marketing and organizing costs quickly. Which pricing strategy should the organization use?

A) market skimming
B) prestige pricing
C) negotiating
D) penetration pricing

Question 13

Which of the following is true about prices at the Madada Mogador boutique hotel in Morocco?

A) Prices remain the same all year round
B) Prices are adjusted depending on the time of year
C) Prices are higher in the summer
D) Prices are discounted if the rooms are not selling

Question 14

At the Riad Dar Maya, which of the following is NOT true about prices?

A) there is some seasonal change
B) they are higher at Christmas, Easter, August
C) they are higher during the Gnaoua World Music Festival
D) they remain the same all year round

Question 15

Which of the following statements is FALSE concerning promotional pricing?

A) It is often used in conjunction with product-bundle pricing
B) It is usually done for a short period of time
C) Products are temporarily sold above their normal list price
D) It is often used to introduce new or revamped products

Question 16

A price spread is a range of products that will suit the ___________of all target markets.

A) budgets
B) expectations
C) demands
D) perceptions

Question 17

Which of the following is NOT used to calculate yield?

A) how much customers spend
B) the number of customers
C) the number of products customers buy
D) the costs of supplies and materials

Question 18

Which of the following does NOT affect pricing policies for the tourism and hospitality sector?

A) low fixed costs
B) variability of demand
C) late booking
D) fixed capacity

Question 19

Dublin-based Ryanair has introduced the following strategies in order to cut prices

A) no complimentary food and beverage services
B) very low luggage allowances
C) surcharges for extras such as wheelchair service
D) all of the above

Question 20

According to the final case study, which airline is still the only airline offering direct low-cost transatlantic travel to UK passengers?

A) Norwegian
B) British Airways
C) Ryanair
D) Emirates