Chapter 17 : Princing of Services

Question 1

What is the reasons why service prices are different for customers ?

Answer 1

• Customer often have inaccurate or limited reference prices for services
• Price is a key signal of quality in services
• Monetary price is not the only price relevant to service customers.

Question 2

What is the customer knowledge of service prices ?

Answer 2

1) Providers are unwilling to estimate prices
2) Individual customer needs vary
3) Prices are not visible

Question 3

What is the total cost to the cutomer ?

Answer 3

• Monatery cost : Price
• Non-monetary cost : 1) Time cost (waiting time, participation time)
  2) Search cost (identify and select)
  3) Convenience costs (travel, office hours, prepare for service)

Question 4

What is the role of non-monetary costs ?

Answer 4

1) Psychological costs : fear rejections, losing trial
2) Non-monetary cost priorities : customer makes an individual priority order
3) Reducing non-monetary costs; buying time, home delivery household services.

Question 5

What are the 3 basic marketing price structures and challenges associated with their use for services ?

Answer 5

1) Cost-based
2) Demand-based
3) Competition-based

Question 6

What are the challenges of competition-based ?

Answer 6

1) Small firms may charge too little to be viable
2) Heterogeneity of service limits comparability
3) Prices may not reflect customer value

Question 7

Give 6 pricing strategies

Answer 7

1) Discounting
2) Odd priceing
3) Penetration priceing
4) Prestigious priceing
5) Skimming priceing
6) Price bundeling

Question 8

What are the 4 sample measurements for the balanced scorecard different design ?

Answer 8

1) Financial measures
2) Customer perspective
3) Innovation and learning perspective
4) Operation perspective