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Exam 15: Pricing of Services

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Question 31

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Many white-collar workers have heard the story about the busy executive who billed the doctor for keeping him waiting when the patient showed up promptly at his appointment time or has dreamed of doing it themselves.This is an example of the _____ costs of services.

A) Convenience
B) Monetary
C) Psychological
D) Time
E) Search

F) C) and D)
G) B) and E)

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Question 32

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One of the problems associated with cost-based pricing is the heterogeneity of services,which limits comparability.

A) True
B) False

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Question 33

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Consumer resistance to using self-checkout lines has resulted from a _____ cost in using a new service.

Melissa teaches swimming lessons at the YWCA pool.She will charge $75 per child for four weeks' worth of lessons.Payment is not due until the child can swim the length of the pool.If the child cannot accomplish this task,he or she will be automatically enrolled in the next swimming lesson session until the child can swim the length of the pool.At that time,the parents will be expected to pay the $75.The YWCA is using a(n) _____ pricing strategy.

Which of the following statements does NOT describe how consumers typically define value?

_____ costs represent other sources of sacrifice perceived by consumers when buying and using a service.

If a family has one child enrolled in Diane's Day Care Center,it costs $75 per week.If a family has two children enrolled at Diane's,it costs $135.Diane's is using a(n) _____ differential.

The most commonly known form of results-based pricing is a practice called mixed bundling.

In a _____ pricing strategy,new services are introduced at high prices with large promotional expenditures.

_____ is a form of competition-based pricing that involves charging the most prevalent price on the market for a service.

Which of the following is NOT an effective pricing strategy to use when customers define value as "low price"?

American Woman Fitness Centers offer first-time customers a 3-month membership for $79,a saving of $20 off the regular 3-month membership price.American Woman Fitness Centers' pricing strategy is aligned with which of the following customer definitions of value?

In _____ pricing,a service firm determines price by calculating component costs of the service and adding a mark up.

What two pricing strategies are most commonly used when the customer defines value as quality for the price paid?

Since customers naturally look for price anchors,as well as familiar services,against which to judge focal services,price framing is an appropriate strategy to use for pricing many types of services.

American Airlines BreakAway fares offer travelers substantial savings on nonstop flights from Newark,New Jersey to Los Angeles from mid-August to mid-October.The round-trip airfare is $299 for customers who depart on Friday and return the following Monday or Tuesday.American Airlines is using a(n) _____ differential.

All of the following are situations in which a penetration pricing strategy would be appropriate EXCEPT:

Derrick saves coupons from 10-minute oil and lubrication services (e.g.,Jiffy Lube,Quick Lube and Speedi-Lube) and when he needs to have his car's oil changed,he chooses the oil and lubrication service that offers the best deal on a 10-minute oil change.For 10-minute oil and lubrication services,Derrick defines value as:

_____ cost refers to the effort invested in identifying and selecting a service from your consideration set.

Price signaling is typical in markets with a high concentration of sellers.