Question 1

The internal factors determining the price of a sports product include all of the following EXCEPT _____.
A) consumer demand
B) promotion
C) product
D) distribution
E) cost

Accepted Answer

Consumer demand is an external factor that influences the price of a sports product, as it is determined by the market and the preferences of the consumers, not by the internal decisions or characteristics of the company offering the product.

Question 2

The quantity of a sports product that consumers are willing to purchase at a given price is known as _____.
A) consumer demand
B) consumer price curve
C) consumer price index
D) consumer supply curve
E) none of the above

Accepted Answer

The quantity of a sports product that consumers are willing to purchase at a given price is known as consumer demand. This is the amount of the product that customers are willing to buy at a specific price point, which can be represented graphically as a demand curve.

Question 3

The mob effect (or the crowd effect)describes a situation in which consumers believe it is socially desirable to attend "special" sporting events.

Accepted Answer

The mob effect, also known as the crowd effect or herd mentality, refers to the phenomenon in which individuals conform to the behavior or beliefs of a larger group, often due to social pressure or a desire for social validation. In the context of attending sporting events, the mob effect may lead some consumers to believe that it is socially desirable or prestigious to attend high-profile or exclusive events, even if they may not necessarily be interested in the sport or game itself.

Question 4

When it comes to external factors putting constraints on sports pricing,legal issues are an area that has little effect on sport products.

Accepted Answer

Legal issues can have a significant impact on sports pricing, such as lawsuits, labor disputes, and changes in regulations. For example, a team may have to pay significant damages in a lawsuit, which could affect their ability to invest in their players, facilities, and marketing. Additionally, changes in regulations or labor agreements could affect the cost of hiring athletes and support staff, which could affect ticket prices and other revenue sources.

Question 5

Exclusive distribution of a sports product is usually associated with _____.
A) higher pricing
B) lower prices
C) penetration pricing
D) discount merchandising
E) value pricing

Accepted Answer

Exclusive distribution is a strategy where a manufacturer or supplier limits the number of retailers or distributors who can sell their products. This gives the products a sense of exclusivity and scarcity, which can justify higher pricing. Additionally, retailers who are selected for exclusive distribution may have to make significant investments in marketing and promotion, which may also contribute to higher prices.

Question 6

Advertising and promotional costs for a local minor league baseball team that can increase or decrease from month to month would be a good example of variable cost.

Accepted Answer

Variable costs are costs that change in proportion to the level of activity or output. In this example, advertising and promotional costs for a local minor league baseball team may increase or decrease based on factors such as ticket sales, game schedule, and marketing campaigns. As such, they are considered a variable cost.

Question 7

The most central tenet in pricing is understanding the concept of _____.
A) discounting
B) merchandising
C) value
D) deals
E) both a and d

Accepted Answer

Understanding the concept of value is the most central tenet in pricing. Pricing should be based on the value that the product or service provides to the customer. Discounting and deals may be strategies used in pricing, but they are not the most central tenet. Merchandising is related to how products are displayed and marketed, but not specifically to pricing.

Question 8

Ski equipment that is discounted in the summer to stimulate sales is known as _____.
A) quantity discounting
B) sales
C) special discounting
D) seasonal discounting
E) referent discounting

Accepted Answer

The type of discounting described in the question - offering discounts on ski equipment in the summer to stimulate sales - is known as seasonal discounting. Therefore, choice D is the best answer. Choice A (quantity discounting) refers to offering discounts for purchasing larger quantities of a product, while choice B (sales) is a broad term that can refer to a variety of pricing strategies. Choice C (special discounting) is not a commonly used term in pricing literature, and choice E (referent discounting) is not applicable to the scenario described in the question.

Question 9

An average ticket price to a single NY Jets game is reduced from $65.00 to $55.00 and the number of units sold increases dramatically. The demand is considered _____.
A) unitary
B) inelastic
C) appealing
D) elastic
E) both a and d

Accepted Answer

The decrease in price led to a significant increase in the number of units sold, indicating that the demand is sensitive to changes in price and therefore, elastic.

Question 10

With the sports pricing concept,costs are those factors associated with producing,promoting,and distributing the sports product.

Accepted Answer

The sports pricing concept considers costs as factors associated with producing, promoting, and distributing the sports product. This is in contrast to considering only the demand and competition when setting prices.

Question 11

Most professional sports teams are LEAST concerned about what type of organization objective?
A) income
B) sales
C) competition
D) revenue
E) promotion

Accepted Answer

Most professional sports teams are least concerned about competition because their main focus is on winning games and championships, rather than out-competing other teams in terms of profits or sales. While income, sales, revenue, and promotion are important organizational objectives for sports teams, they are ultimately secondary to winning on the field or court.

Question 12

A statement of value for a sports product is (a)_____.
A) price
B) discount fee
C) exchange process
D) contract
E) value

Accepted Answer

A statement of value for a sports product is the price.

Question 13

All of the following are ways to estimate demand EXCEPT _____.
A) consumer income levels
B) consumer tastes
C) organizational objectives
D) availability of substitute products
E) All of the above are ways to estimate demand.

Accepted Answer

Consumer income levels, consumer tastes, and availability of substitute products are all factors that can be used to estimate demand. However, organizational objectives do not directly relate to demand estimation.

Question 14

Rent or lease on an arena for a minor league hockey franchise is considered a(n)_____ cost item.
A) total
B) fixed
C) variable
D) intermediary
E) limited

Accepted Answer

Rent or lease on an arena is a fixed cost because it does not vary based on the level of activity or output of the minor league hockey franchise. It remains constant regardless of the number of games played or tickets sold.

Question 15

Consumer demand is one of the least critical factors in determining the price of sports product.

Accepted Answer

Consumer demand is one of the most critical factors in determining the price of sports products. The higher the demand, the higher the price, and vice versa. Other factors such as production costs, competition, and market trends can also affect pricing, but consumer demand remains a significant driver.

Question 16

The _____ that may affect a consumer's acceptable range of prices include the presence or absence of time,the usage situation,and social factors.
A) situational factors
B) elastic demand
C) variable cost
D) price perception
E) value factors

Accepted Answer

Situational factors such as time availability, usage situation,and social norms can greatly impact a consumer's acceptable range of prices. For example, a consumer may be willing to pay more for a product if they are in a rush and need it immediately, or if it is perceived to be socially desirable. These situational factors can make a consumer more or less price sensitive, which in turn affects their willingness to pay for a product or service.

Question 17

Unitary demand is defined as a situation where price changes are offset exactly by changes in demand; in other words,price and demand are perfectly related.

Accepted Answer

Unitary demand is a situation where a change in price leads to an equal and offsetting change in quantity demanded, resulting in a constant total revenue. This means that price and demand are perfectly related, making A the correct answer.

Question 18

(The)_____ is the point at which consumers detect a change between two stimuli (prices).
A) price skimming
B) cost-based pricing
C) psychological pricing
D) just noticeable difference (JND)
E) penetration pricing

Accepted Answer

Just noticeable difference (JND) is the point at which consumers detect a change between two stimuli, in this case, prices. It is a concept used in psychology and marketing to understand consumer perception of pricing changes. The other options are different pricing strategies, but not related to the concept of JND.

Question 19

There are four categories of organizational objectives that influence pricing decisions.Which of the following is NOT one of those categories?
A) income
B) consumer
C) sales
D) competitive
E) social

Accepted Answer

Consumer objectives are not typically categorized as organizational objectives influencing pricing decisions. Organizational objectives usually focus on income, sales, competitive positioning, and social responsibilities, rather than directly on consumer objectives.

Question 20

External (or environmental)factors are controlled by the sports product organization.

Accepted Answer

External factors are things that are outside of the control of the sports product organization, such as the economy, weather, and competition. While the organization can try to anticipate and respond to these factors, they ultimately cannot control them.

Quiz 12: Pricing Concepts and Strategies

The internal factors determining the price of a sports product include all of the following EXCEPT _____.

The quantity of a sports product that consumers are willing to purchase at a given price is known as _____.

The mob effect (or the crowd effect)describes a situation in which consumers believe it is socially desirable to attend "special" sporting events.

When it comes to external factors putting constraints on sports pricing,legal issues are an area that has little effect on sport products.

Exclusive distribution of a sports product is usually associated with _____.

Advertising and promotional costs for a local minor league baseball team that can increase or decrease from month to month would be a good example of variable cost.

The most central tenet in pricing is understanding the concept of _____.

Ski equipment that is discounted in the summer to stimulate sales is known as _____.

An average ticket price to a single NY Jets game is reduced from $65.00 to $55.00 and the number of units sold increases dramatically. The demand is considered _____.

With the sports pricing concept,costs are those factors associated with producing,promoting,and distributing the sports product.

Most professional sports teams are LEAST concerned about what type of organization objective?

A statement of value for a sports product is (a) _____.

All of the following are ways to estimate demand EXCEPT _____.

Rent or lease on an arena for a minor league hockey franchise is considered a(n) _____ cost item.

Consumer demand is one of the least critical factors in determining the price of sports product.

The _____ that may affect a consumer's acceptable range of prices include the presence or absence of time,the usage situation,and social factors.

Unitary demand is defined as a situation where price changes are offset exactly by changes in demand; in other words,price and demand are perfectly related.

(The) _____ is the point at which consumers detect a change between two stimuli (prices) .

There are four categories of organizational objectives that influence pricing decisions.Which of the following is NOT one of those categories?

External (or environmental)factors are controlled by the sports product organization.