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Exam 15: Pricing of Services

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Question 41

True/False

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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 42

Multiple Choice

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Executive Dry Cleaners charges customers $2.99 to launder a dress shirt rather than $3.00.Executive Dry Cleaners is using a(n) _____ pricing strategy.

A) Odd
B) Synchro-
C) Discounting
D) Prestige
E) Complementary

F) B) and D)
G) None of the above

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Question 43

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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:

When the customer defines value as low price,the service provider should use prestige pricing.

Which of the following statements does NOT contain a reason why consumers lack accurate reference prices for services?

You can get a haircut in one of the rural counties that surround Atlanta for $15.You will pay around $45 for the same haircut if you buy it in one of the five counties that make up the Atlanta area.Which type of competition-based pricing does this best exemplify?

Tyra has done volunteer fundraising for years.She has recently decided it would be a good career move for her to become a full-time,paid fundraiser.She likes the idea of working with a variety of different organizations and then moving on to some new problem to tackle.She is trying to keep her operation simple.From what Tyra has told you so far,you understand that she plans on using cost-plus pricing.What problems do you foresee if she uses this pricing technique? What type of a pricing strategy might be more appropriate and simpler?

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

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

University presidents often have access to funding to pay to have widely recognized people such as Malcolm Gladwell,Maya Angelou or Bill Clinton come to their campuses as speakers.When negotiating with speakers' bureaus for the services of these individuals,college presidents are primarily concerned with the "get" component of a service and monetary price is not of primary concern.What types of pricing strategies should the speakers' bureau use if they wish to appeal to the value as defined by the university presidents?

An inn near a ski resort would be using a synchro-pricing strategy if it had lower rates in the summer months than in its busy season.

Which of the following is NOT an example of an effective pricing strategy to use when the customer defines value as "all that I get for all that I give?"

What is the basic formula for cost-based pricing?

When comparing the value of health clubs,Shaundra believes value comes from having a "women's only" nautilus room and "women's only" aerobic classes.Shaundra defines value as:

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?

Which of the following is NOT a type of differential used by service providers to synchronize demand and supply?

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

The process for installing Leo's new CD player took almost four hours,which Leo spent sitting in the waiting room of J.J.'s Auto Sound.Leo paid _____ costs for the installation of his new CD player.

All of the following examples are nonmonetary costs EXCEPT:

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.