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What type of discount allows fixed or unlimited uses over a specified time period?
Contingency pricing is a pricing technique where the price is dependent on the outcome of the service.
True
What is an example of a short-term price reduction?
Temporary discount
The _______ discount is based on the quantity purchased.
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Match the following discount types with their definitions:
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What pricing strategy is BritBox using?
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BritBox launched with a higher subscription price than Netflix.
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What is the subscription price of BritBox?
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BritBox offers a ___-day free trial to new subscribers.
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Match the following pricing foundations with their descriptions:
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What is the primary factor for competitors when setting their prices?
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The foundation of pricing balances cost and demand.
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In which country did BritBox launch its streaming service in August 2021?
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What pricing objective focuses on maintaining a desired level of profitability in unfavorable market conditions?
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The prestige pricing objective is primarily concerned with low pricing to gain a competitive advantage.
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What segmentation approach is BritBox utilizing for pricing in the UK and South Africa?
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What is a common strategy for stimulating patronage for a new service?
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The pricing objective that involves adjusting prices according to demand levels is known as __________.
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The same subscription price is charged for BritBox in both the UK and South Africa.
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Which pricing objective aims to ensure critical mass in sales volumes?
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Which pricing segmentation approach is used by Two Oceans Aquarium based on admission rates?
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In the scenario where UK residents pay £5.99 p/m and South Africans pay R99 p/m for the same service, this illustrates a __________ segmentation approach.
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Match the following pricing objectives to their descriptions:
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Prices must always be justified economically, regardless of market conditions.
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Which option describes a scenario where pricing differs based on when the service is used?
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What is the primary pricing strategy used by hotels compared to subscription services like BritBox?
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In pricing objectives, what is meant by 'economies-of-scale benefits'?
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Michaelangelo Hotel in NYC utilizes a __________ pricing approach for its room rates.
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Match the pricing segmentation approaches with their descriptions:
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What does Beat2 offer in their hospital plans?
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Purchase-based pricing takes into account the time of purchase.
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Define time-based pricing.
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______ based pricing is determined by the age group of the consumer.
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Match the pricing approaches with their definitions:
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Which of the following is an example of purchase-based pricing?
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BestMed's plans offer comprehensive benefits specifically for elderly patients.
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What determines time-based pricing?
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Study Notes
Pricing Objectives
- Survival: Adjust pricing to maintain profitability during unfavorable market conditions by lowering prices.
- Sales Maximization: Aim for high sales volumes to achieve economies of scale, offering a competitive advantage.
- Prestige: Use high pricing strategies to create an exclusive or prestigious brand positioning.
- Social Considerations: Prices may be regulated and need to address social impacts, promoting patronage through pricing tactics.
- Supply & Demand Matching: Implement peak pricing strategies to maximize capacity during high demand and lower prices in periods of low demand.
Foundations of Pricing
- Cost-based Pricing: Establish a price floor based on cost to ensure sustainability and profitability.
- Competition-based Pricing: Prices set according to what competitors charge, influencing market positioning.
- Demand-based Pricing: Price determined by the perceived value customers are willing to pay, balancing cost and demand.
Segmentation Approaches for Pricing
- Time-based Pricing: Pricing varies based on the timing of service usage (e.g., peak vs. off-peak).
- Purchase-based Pricing: Variation depending on location and associated convenience or prestige (e.g., urban vs. rural).
- Customer-based Pricing: Tailoring prices to specific demographics, such as pricing differences for children, adults, and seniors.
Examples of Pricing Techniques
- Contingency Pricing: Prices are dependent on service outcomes, often used where there is high uncertainty or unfamiliarity with the service.
- Cash Discounts: Reduction offered to motivate immediate payment or purchase.
- Quantity Discounts: Price reduction based on the volume of purchases, encouraging larger orders.
- Temporary Discounts: Short-term price reductions aimed at boosting sales, especially under competitive pressure.
Case Study Insights
- BritBox Subscription Pricing: Set at R99.99 in South Africa, aligning closely with Netflix's R99 per month, demonstrating competition-based pricing.
- International Price Segmentation: UK residents pay £5.99 while South Africans pay R99 for the same service, indicating a customer-based pricing strategy.
Additional Notes
- Emphasis on the importance of strategic pricing in attracting customers and maintaining competitiveness.
- Understanding pricing objectives and techniques is crucial for effective marketing and profitability in service industries.
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Description
This quiz focuses on understanding the pricing objectives within service marketing, specifically highlighting the prestige pricing strategy. Explore key concepts and their applications as outlined in the 3rd edition of 'Grasping Service Marketing'.