Question 1

Consumers use price less to judge the quality of a product when they ________.

Accepted Answer

When consumers have experience with a product, they rely less on price to judge its quality because their experience gives them other criteria to assess the product's value.

Question 2

The National Gallery has different admission prices for students,adults and seniors.All three groups are entitled to the same services.This form of pricing is called ________.

Accepted Answer

Customer-segment pricing is when different groups of customers are charged different prices for the same product or service. In this case, the National Gallery charges different prices for students, adults, and seniors, but they are all entitled to the same services. Time-based pricing would be charging different prices for the same product or service at different times (such as happy hour pricing), location pricing would be charging different prices depending on where the product or service is purchased (such as higher prices in tourist areas), revenue management pricing would involve adjusting prices based on demand and supply, and generational pricing would involve targeting specific age groups with different prices.

Question 3

For consumers,the number '9' at the end of a price often signals a bargain

Accepted Answer

This phenomenon is known as "charm pricing" and has been shown to be effective in influencing consumer perception of value and encouraging purchases. Consumers tend to perceive prices ending in 9 as being lower than the next whole number, even if the difference is only one cent. This is why many retailers price items at $9.99 instead of $10.00.

Question 4

In two-part pricing,the price is broken down into a ________ fee plus a ________ ________ rate.

Accepted Answer

The answer of In two-part pricing,the price is broken down...

Question 5

A steam cleaning firms offers to clean the carpet in three rooms for a low basic price of $100 as a means of attracting customers.The company intends to make money by selling extras,such as cleaning chairs,sofas,rugs,curtains and cleaning additional rooms.This is an example of ________ pricing.

Accepted Answer

The answer of A steam cleaning firms offers to clean...

Question 6

What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

Accepted Answer

Promotional pricing is used to create buying excitement and urgency by temporarily pricing a product below its list price or even below cost. This type of pricing is commonly used during sales events, holidays, or product launches to incentivize customers to buy. Segmented pricing refers to pricing a product differently for different customer groups or segments, psychological pricing involves using pricing tactics to influence consumer perception, referent pricing is when a price is compared to a previous price or competitor's price, and dynamic pricing adjusts prices in real time based on supply and demand.

Question 7

________ are prices that are adjusted continually to meet the characteristics and needs of the consumer.

Accepted Answer

Dynamic prices are constantly adjusted to meet the needs and characteristics of the consumer in real-time. This can be done using various factors such as demand, supply, and other market conditions. For instance, dynamic pricing is commonly used by airlines, hotels, and ride-sharing services, among others, to adjust their prices based on factors such as seat availability and peak travel periods. This allows them to charge consumers the optimal price for their services, maximizing revenue and profit.

Question 8

All of the following are examples of segmented pricing,EXCEPT which one?

Accepted Answer

Trade discounts are not an example of segmented pricing. Trade discounts are discounts offered to members of the distribution channel such as retailers or wholesalers. The other options (customer-segment pricing, product-form pricing, location-based pricing, and time-based pricing) all involve dividing the market into specific segments and charging different prices to each segment.

Question 9

When a car manufacturer provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs,it is granting a(n)________.

Accepted Answer

The answer of When a car manufacturer provides payments or...

Question 10

Trade or functional discounts are offered by manufacturers to which of the following?

Accepted Answer

Trade or functional discounts are typically offered to channel members (such as wholesalers or retailers) who perform certain tasks or functions that the manufacturer would otherwise have to do themselves, such as storage, distribution, or sales efforts.

Question 11

A quantity discount is a price reduction to buyers who purchase ________.

Accepted Answer

A quantity discount is given to buyers who purchase large volumes. This is because buying in bulk reduces the seller's costs and it is one way to reward customers who are making a significant purchase.

Question 12

When a gift card shop offers a price reduction to customers who buy Christmas cards in the week after Christmas,it is giving a(n)________ discount.

Accepted Answer

The price reduction is based on a specific time period, in this case the week after Christmas, making it a time-based discount.

Question 13

Provide relevant,non-text book examples of products for which marketers may use the following:
(i) optional-product pricing
(ii) captive-product pricing
(iii) two-part pricing
(iv) price bundling

Accepted Answer

The answer of Provide relevant,non-text book examples of products for...

Question 14

________ prices are the prices that a buyer carries in his or her mind and refers to when looking at a given product.

Accepted Answer

Reference prices are the prices that consumers have in mind and use as a basis for comparing the current prices of goods or services when making purchasing decisions.

Question 15

Godfreys will give customers $100 for a used vacuum cleaner,regardless of condition,when they purchase a new vacuum or sewing machine.This essentially reduces the price by $100.What is this type of discount called?

Accepted Answer

This is a trade-in allowance as customers are being given a discount for trading in their old vacuum cleaner towards the purchase of a new one.

Question 16

When a firm varies its price by the season,month,day or even hour,it is using ________ pricing.

Accepted Answer

The answer of When a firm varies its price by...

Question 17

By definition,this type of pricing is used when a firm sells a product or service at two or more prices,even though the difference in price is not based on differences in cost.

Accepted Answer

Segmented pricing is used when a firm sells a product or service at two or more prices, even though the difference in price is not based on differences in cost. Instead, the firm sets different prices for different segments of the market, based on factors such as customer demographics, purchase behavior, or perceived value. This allows the firm to capture more value from different customer groups and improve its overall profitability.

Question 18

Many consumers perceive higher-priced products as ________.

Accepted Answer

Many consumers perceive higher-priced products as having a higher quality. This is due to the belief that a higher price tag means the product is made with better materials, has better features, or is produced with more care and attention to detail.

Question 19

When a car manufacturer offers a ________,customers may purchase a vehicle from a dealership within a specified time period and are able to negotiate attractive terms and trade-in allowances with the dealer,none of which affect the size of the cheque sent by the manufacturer in the post-sale period.

Accepted Answer

A cash rebate is a type of incentive offered by car manufacturers where customers can receive a certain amount of money back after purchasing a vehicle. This money is sent directly to the customer and does not affect negotiations or trade-in allowances with the dealership. Therefore, option A is the best choice that fits the given scenario.

Question 20

The fact that a meat pie cost three times more at the AFL Grand Final than the same meat pie cost at suburban Sam's Café is an example of ________.

Accepted Answer

The pricing strategy used in this scenario is segmented pricing, where different prices are charged for the same product in different markets. The AFL Grand Final is a premium event, and people are willing to pay more for food and beverages at the stadium. On the other hand, suburban Sam's Cafe caters to a different market segment, where people are not willing to pay as much for a meat pie.

Quiz 9: Pricing: Capturing Customer Value