QUIZ 08: Pricing: Understanding and Capturing Customer Value

Which of the following is an example of an elastic demand situation?

• Demand rises 4% if price falls 6%

• Demand falls 8% when price increases 5%

• Demand rises 7% if price falls 10%

• Demand falls 7% when price increases 9%

The factor that sets the floor for a product's price is:

• Elasticity

• Quality

• Availability

• Cost

An executive fully reimbursed for all travel expenses is most likely to be attracted to a(n):

• Discount rate offer for a hotel room

• Discount rate offer for a hotel room and a restaurant offering a $9.99 dinner special

• Discount rate offer for a hotel room and a restaurant offering a $9.99 dinner special and a free breakfast the next day

• Upscale hotel, having a room-service breakfast, and eating lunch and dinner in a more expensive restaurant.

Which of the following is NOT a factor affecting price sensitivity?

• Total expenditure effect

• Customer satisfaction effect

• End-benefit effect

• Unique value effect

Charging $0.99 instead of $1.00, or using 3s in the price instead of 7s, is an attempt to engage in:

• Competition-based pricing

• Psychological pricing

• Yield management

• Price discrimination

Which of the following statements is TRUE?

• Price points are rare if not non-existent in the hospitality industry.

• Today, yield management is used by everyone.

• Excess capacity is a good reason to cut prices.

• Business travelers are usually more price-sensitive than pleasure travelers.

Pricing based on segmentation of the market and pricing differences based on price elasticity characteristics of these segments, is called:

•     Elasticity pricing

• Inelastic pricing

• Market segmentation

• Discriminatory pricing

The more someone spends on a product, the more ________ he or she is to the product's price.

• Sensitive

• Insensitive

• Neither sensitive nor insensitive

• Comfortable

Value-based pricing is based on the seller's perception of value.

• TRUE

• FALSE

Product-bundling involves combining several products into a package with a reduced price.

• TRUE

• FALSE