Chapter 15 Flashcards
If you visit a county or state fair, you will pay a basic admission fee plus other fees if you want to
enjoy any of the amusement rides. County and state fairs that price this way are using:
Two-part pricing
A day after US Airways announced its new low fares for the autumn on travel from New York (i.e.,
Newark and LaGuardia Airports) to selected cities in the United States and Canada, American
Airlines matched their fares. American Airlines is using a ________ strategy.
Price signaling
________ occurs in markets with a high concentration of sellers. Any price offered by one
company will be matched by its competitors in order to avoid giving the low-price seller a distinct
advantage
Price signaling
The process for installing a new in-dash audio system in Leo’s car 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 audio system.
time
In talking to a travel agent, T. J. Matthews learned that he would have to pay the same amount of
money for a three-day/two-night package right outside the gates of Walt Disney World for his
family of four as he would for a five-day/four-night stay at a hotel that was about 50 miles away
from Walt Disney World. Matthews decided the farther hotel was a much better value. Matthews
defined value as:
All that I get for all that I give
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.
Quantity
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?
Value is low price
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.
time
What two pricing strategies are most commonly used when the customer defines value as quality
for the price paid?
Market segmentation pricing and value pricing
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?”
price skimming
The ad for legal services that Marla saw indicated the lawyers would receive no money unless
their client did. To Marla, this statement indicated the legal firm offering this service was using:
Contingency pricing
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:
low price
Salespeople are often on the road three nights every week. They cannot afford to stay in the
most luxurious of hotels, but they do appreciate amenities like a good mattress, a firm pillow and
a comfortable work area. They want the price they pay to be commensurate with the amenities
provided by the hotels. They tend to define value as:
The quality I get for the price I pay
