Question 1

Think of a sports organisation. What are some ways they go about maximising shareholder value?

Accepted Answer

Explain more than one of the following ways of maximising shareholder value: 
A. maximising profit; 
B. maximising sales growth; 
C. maximising revenue. Provide a relevant example.

Question 2

Describe some social responsibility constraints that an organisation may face in relation to pricing behaviour. Provide an example.

Accepted Answer

Describe social responsibility constraints (e.g., accessibility) and provide a relevant example.

Question 3

Explain the place of price in relation to other elements of the traditional marketing mix.

Accepted Answer

Provide an explanation of: 
1. product mix: the number/range of products available at varying price points; 
2. place dependence: the location and quality of service production that will allow for differential pricing; 
3. promotion mix: how price can play a central role in communication with the target markets, in regard to their ability to pay, and in regard to the perceived value that is communicated by price setting.

Question 4

How does time dependence make sport suitable for price discrimination? Provide an example.

Accepted Answer

The answer of How does time dependence make sport suitable...

Question 5

A cost-volume-profit analysis (or break-even analysis) examines the interaction of factors influencing profit levels. Which of the following is NOT a factor that should be considered?

Accepted Answer

Unsold volume is not a factor that influences profit levels in cost-volume-profit analysis. It is not relevant to determining the break-even point or the impact of changes in sales volume or selling prices on profitability.

Question 6

Time since price change is a determining factor for elasticity of demand.

Accepted Answer

The longer the time since a price change, the greater the likelihood that consumers will have adjusted their buying habits to accommodate the new price, making the demand less elastic.

Question 7

Which of the following equations for calculating the break-even point is correct?

Accepted Answer

The correct formula for calculating the break-even point is Total Fixed Costs divided by the difference between Unit Price and Unit Variable Cost, which matches option A. This formula is used to determine the number of units that must be sold to cover all fixed costs, at which point the business starts to generate profit. Option B incorrectly places Total Fixed Costs in the denominator and reverses the fraction.

Question 8

If an organisation wishes to be the most innovative in the business, which derived pricing goal would they employ?

Accepted Answer

Market skimming pricing strategy involves setting a high price for a new and innovative product to maximise profits in the short term, while also creating a perception of premium quality and exclusivity among customers. This can help establish the organisation as an innovative leader in the industry.

Question 9

A person's intangible perception of a product constitutes a non-price factor.

Accepted Answer

Intangible perception refers to factors such as brand image, reputation, and product quality, which are not directly related to the price of the product. Therefore, it constitutes a non-price factor.

Quiz 5: Sport and Pricing Strategies