Deck 10: Price: the Online Value

Question 1

Broadly speaking, the definition of price includes all of the following values except ________.

A) money
B) time
C) physical cost
D) psychic cost

Answer 1

C

Question 2

________ and ________ are types of fixed pricing strategies.

A) Price leadership; promotional pricing
B) Price leadership; negotiation
C) Promotional pricing; segmented pricing
D) Negotiation; segmented pricing

Answer 2

A

Question 3

When using ________ segment pricing, a company may set different prices when selling a product in different states or regions.

A) value
B) distance
C) geographic
D) market

Answer 3

C

Question 4

________ pricing uses the internet properties for mass customization, automatically devising pricing based on order size and timing, demand and supply levels, and other preset decision factors.

A) Promotional
B) Auction
C) Segmented
D) Negotiated

Question 5

________ is the most common profit-oriented objective for pricing.

A) Competition-based pricing
B) Dynamic pricing
C) Current profit maximization
D) Segmented pricing

Question 6

________ refers to the variability of purchase behavior with changes in price.

A) Price elasticity
B) Price transparency
C) Dynamic pricing
D) Competition-based pricing

Question 7

Buyer power on the internet is the result of all the following except ________.

A) product availability
B) product costs
C) large amount of information
D) willingness of sellers to negotiate

Question 8

The phenomenon that some people may actually pay a higher price for auctioned products than they would pay an online retailer is known as ________.

A) seller control
B) buyer control
C) dynamic pricing
D) the winner's curse

Question 9

________ power is based largely on the huge quantity of information and product availability on the web.

A) Buyer
B) Seller
C) Market
D) All of the above

Question 10

In order to avoid upsetting customers who learn they are getting different prices than their neighbors, e-marketers should use customer-accepted reasons. These reasons may include ________.

A) giving discounts to new customers
B) giving discounts to loyal customers
C) adjusting shipping fees due to outlying locations
D) all of the above

Question 11

In general, marketers can employ which of the following types of pricing strategies both online and offline ________.

A) fixed pricing
B) auction pricing
C) dynamic pricing
D) all of the above

Question 12

Which of the following are possible explanations of online price dispersion?

A) delivery options
B) time-sensitive shopping habits
C) switching costs
D) all of the above

Question 13

Which of the following attributes of the internet puts upward pressure on prices?

A) online customer service
B) affiliate programs
C) customer acquisition costs
D) all of the above

Question 14

Which of the following customer group is of least value to a seller?

A) A+
B) A
C) B
D) C

Question 15

All of the following are types of markets recognized by economists except ________.

A) pure competition
B) oligopolistic monopoly
C) monopolistic competition
D) oligopolistic competition

Question 16

________ refers to the idea that both buyers and sellers can view all competitive prices for items sold online.

A) Price transparency
B) Dynamic pricing
C) Online pricing
D) None of the above

Question 17

Which of the following attributes of the internet puts downward pressure on prices?

A) distribution
B) price dispersion
C) self-service order processing
D) all of the above

Question 18

________ suggests that 80% of a firm's business typically comes from the top 20% of customers.

A) The Pareto principle
B) Customer loyalty
C) Value segmenting
D) Dynamic pricing

Question 19

Companies select market-oriented pricing on the internet to ________.

A) maximize profits
B) grow market share
C) increase return on investment (ROI)
D) all of the above

Question 20

A market is truly efficient when customers have equal access to information about ________.

A) products
B) prices
C) distribution
D) all of the above

Question 21

Define and distinguish between the four types of markets recognized by economists. What kind of market is the internet at this time?

Question 22

Menu pricing is the strategy of offering different prices to different customers.

Question 23

A key issue for companies who have an online and an offline presence is how to coordinate pricing between the two channels.

Question 24

With value segment pricing the seller recognizes that not all customers provide equal value to the firm.

Question 25

In the narrowest sense, price is the amount of money charged for a product. However, a much broader definition of price may be more accurate. What factors are accounted for in a broader definition of price? Give real life examples of each.

Question 26

In a "flash sale," a site member may be eligible to purchase a product at a deep discount for a limited time.

Question 27

Price dispersion is the observed spread between the highest and lowest price for a given product.

Question 28

The internet is always considered a low cost option for selling products and services. From a firm's perspective what are some factors that add to the expense of doing business on the internet and why?

Question 29

The objective of competition-based pricing is to price according to the company's costs or demand.

Question 30

What factors might explain the wide price dispersion on the internet? In your opinion, which of these factors has the biggest effect on the spread between online prices?

Question 31

What are the three types of pricing strategies marketers can employ both online and offline? Give an example of a website that uses each of these strategies.

Question 32

Online sellers are less willing to negotiate than offline sellers, giving more power to seller.

Question 33

Today's buyer must be quite sophisticated to understand even the simple dollar cost of a product.

Question 34

The internet is currently an efficient market.

Question 35

There are several attributes of the internet that may allow for cost savings online. Define and give examples of at least four.

Question 36

Giving high-value customers the first shot at discounts will reinforce their loyalty.

Question 37

The seller's perspective on pricing includes both internal and external factors affecting pricing levels.

Question 38

In terms of dynamic pricing, negotiation is most often initiated by the seller.