Question 1

Identify and define the internal factors affecting a firm's pricing decisions.

Accepted Answer

The answer of Identify and define the internal factors affecting...

Question 2

The restaurant industry has adopted a rule of thumb that says the highest-priced entree on a menu should cost no more than 2.5 times the lowest-priced entree.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)   Elasticity pricing
B)   Inelastic pricing
C)   Market segmentation
D)   Discriminatory pricing

Question 4

When families go to the same resort year after year, and get to know and like both the resort employees and friends in the nearby town, they may be less sensitive to price increases at the resort due to the:

Accepted Answer

A)   Sunk investment effect
B)   Price quality effect
C)   External environment effect
D)   Substitute awareness effect

Question 5

A restaurant seeking to establish an exclusive clientele is likely to:

Accepted Answer

A)   Deflate food and beverage prices
B)   Inflate food and beverage prices
C)   Keep prices similar to other restaurants in the area
D)   None of the above

Question 6

How important is price among the elements of the marketing mix?

Accepted Answer

The answer of How important is price among the elements...

Question 7

Hotels often use this strategy when the economy slumps:

Accepted Answer

A)   Price gouging
B)   Survival
C)   Price hike
D)   Price maintenance

Question 8

The establishment of price based largely on those of competitors, is called:

Accepted Answer

A)   Cost based pricing
B)   Value based pricing
C)   Going-rate pricing
D)   Break-even pricing

Question 9

Customers are more price-sensitive when the price of the product accounts for a large share of the total cost of the ________.

Accepted Answer

A)   Flight ticket
B)   Perceived benefit
C)   End benefit
D)   Monthly budget

Question 10

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

Accepted Answer

A)   Competition-based pricing
B)   Psychological pricing
C)   Yield management
D)   Price discrimination

Question 11

When employees try to sell a higher priced alternative to a potential customer, it is called:

Accepted Answer

A)   Up-selling
B)   Down-stream selling
C)   Cross-selling
D)   Internal promotion A

Question 12

In the first few months upon opening a new hotel, a hotel company wanting to achieve market share leadership is most likely to:

Accepted Answer

A)   Try to influence supply
B)   Try to influence demand by offering buy three nights, get fourth free, packages
C)   Use low opening rates to influence demand
D)   Charge a high price C

Question 13

Upselling is part of effective revenue management.

Accepted Answer

A) True 
 B)False  True

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

What do we know about a product when we understand its price elasticity? What determines the price elasticity of demand?

Accepted Answer

When we understand a product's price ela...

Question 16

What can a business learn from a demand curve for their product?

Accepted Answer

A business can learn several valuable pi...

Question 17

In the short run, the most important pricing strategy is:

Accepted Answer

A)   Survival
B)   Penetration
C)   Profit maximization
D)   Sales maximization

Question 18

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

Accepted Answer

A)   Demand rises 4% if price falls 6%
B)   Demand falls 8% when price increases 5%
C)   Demand rises 7% if price falls 10%
D)   Demand falls 7% when price increases 9%

Question 19

The basic break-even price is:

Accepted Answer

A)   Variable costs divided by selling price
B)   Fixed costs divided by selling price
C)   Fixed costs divided by contribution
D)   Contribution divided by variable costs

Question 20

Which of the following statements is TRUE?

Accepted Answer

A)   Price points are rare if not non-existent in the hospitality industry.
B)   Today, yield management is used by everyone.
C)   Excess capacity is a good reason to cut prices.
D)   Business travelers are usually more price-sensitive than pleasure travelers.

Exam 11: Pricing: Understanding and Capturing Customer Value

Identify and define the internal factors affecting a firm's pricing decisions.

Correct AnswerverifiedShow Answer

The restaurant industry has adopted a rule of thumb that says the highest-priced entree on a menu should cost no more than 2.5 times the lowest-priced entree.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When families go to the same resort year after year, and get to know and like both the resort employees and friends in the nearby town, they may be less sensitive to price increases at the resort due to the:

Correct AnswerverifiedShow Answer

A restaurant seeking to establish an exclusive clientele is likely to:

Correct AnswerverifiedShow Answer

How important is price among the elements of the marketing mix?

Correct AnswerverifiedShow Answer

Hotels often use this strategy when the economy slumps:

Correct AnswerverifiedShow Answer

The establishment of price based largely on those of competitors, is called:

Correct AnswerverifiedShow Answer

Customers are more price-sensitive when the price of the product accounts for a large share of the total cost of the ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When employees try to sell a higher priced alternative to a potential customer, it is called:

Correct AnswerverifiedA

In the first few months upon opening a new hotel, a hotel company wanting to achieve market share leadership is most likely to:

Correct AnswerverifiedC

Upselling is part of effective revenue management.

Correct AnswerverifiedTrue

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

Correct AnswerverifiedShow Answer

What do we know about a product when we understand its price elasticity? What determines the price elasticity of demand?

Correct AnswerAnswered by ExamLex AIWhen we understand a product's price ela...View AnswerShow Answer

What can a business learn from a demand curve for their product?

Correct AnswerAnswered by ExamLex AIA business can learn several valuable pi...View AnswerShow Answer

In the short run, the most important pricing strategy is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The basic break-even price is:

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE?

Correct AnswerverifiedShow Answer

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A

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C

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True

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Correct Answer
Answered by ExamLex AI
When we understand a product's price ela...
View Answer

Correct Answer
Answered by ExamLex AI
A business can learn several valuable pi...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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