Chapter 5- marketing

Front

The Extremity Aversion Theory lets us as marketers know that:

Back

People tend to avoid extreme price options

Front

If your company offers unlimited language learning downloads for a flat fee of $30 a month, this would be an example of flat-rate pricing.

Back

TRUE

Front

A market is considered elastic if a change in price DOES NOT produce a substantial change in demand.

Back

FALSE

Front

In high-risk purchases, cheap pricing can lead to drastic reduction in demand. Why is this?

Back

In high-risk purchases, need for service quality outweighs the need for a cheap price.

Front

If you increase the price of your product by 100% and demand doesn't change, this would be considered an inelastic market.

Back

TRUE

Front

What is the main appeal of bundle pricing to the consumer?

Back

Bundle pricing is usually priced below what the consumer would pay to buy each item separately.

Front

An example of variable costs is the cost of material to make the product.

Back

TRUE

Front

Marketers choose odd-even pricing to create the illusion of higher, more luxurious prices.

Back

FALSE

Front

The definition of value is:

Back

What the product is worth to the customer

Front

You're launching a new online subscription service, and you'd like to use the Extremity Aversion Theory to your advantage when pricing. In that case, you should do which of the following? Provide three different plans for an online subscription service, marking the middle option as "recommended".

Back

Provide three different plans for an online subscription service, marking the middle option as "recommended".