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Service Marketing Pricing Objectives
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Service Marketing Pricing Objectives

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Questions and Answers

What type of discount allows fixed or unlimited uses over a specified time period?

  • Short-term price reduction
  • Cash discount
  • Quantity discount
  • Multi-use discount (correct)

    • 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.

    <p>Quantity</p> Signup and view all the answers

    Match the following discount types with their definitions:

    <p>Cash discount = A reduction in price for prompt payment Temporary discount = A short-term price reduction Quantity discount = A price reduction based on the volume purchased Multi-use discount = Discount for fixed or unlimited uses over time</p> Signup and view all the answers

    What pricing strategy is BritBox using?

    <p>Competition-based pricing</p> Signup and view all the answers

    BritBox launched with a higher subscription price than Netflix.

    <p>False</p> Signup and view all the answers

    What is the subscription price of BritBox?

    <p>R99.99</p> Signup and view all the answers

    BritBox offers a ___-day free trial to new subscribers.

    <p>7</p> Signup and view all the answers

    Match the following pricing foundations with their descriptions:

    <p>Cost = What can the organization afford to charge? Competition = Pricing in accordance with competitors' prices. Demand = What are customers willing to pay?</p> Signup and view all the answers

    What is the primary factor for competitors when setting their prices?

    <p>Competitor pricing</p> Signup and view all the answers

    The foundation of pricing balances cost and demand.

    <p>True</p> Signup and view all the answers

    In which country did BritBox launch its streaming service in August 2021?

    <p>South Africa</p> Signup and view all the answers

    What pricing objective focuses on maintaining a desired level of profitability in unfavorable market conditions?

    <p>Survival</p> Signup and view all the answers

    The prestige pricing objective is primarily concerned with low pricing to gain a competitive advantage.

    <p>False</p> Signup and view all the answers

    What segmentation approach is BritBox utilizing for pricing in the UK and South Africa?

    <p>Customer-based</p> Signup and view all the answers

    What is a common strategy for stimulating patronage for a new service?

    <p>Introductory price discounts</p> Signup and view all the answers

    The pricing objective that involves adjusting prices according to demand levels is known as __________.

    <p>Match supply &amp; demand</p> Signup and view all the answers

    The same subscription price is charged for BritBox in both the UK and South Africa.

    <p>False</p> Signup and view all the answers

    Which pricing objective aims to ensure critical mass in sales volumes?

    <p>Sales Maximisation</p> Signup and view all the answers

    Which pricing segmentation approach is used by Two Oceans Aquarium based on admission rates?

    <p>Customer-based</p> Signup and view all the answers

    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.

    <p>customer-based</p> Signup and view all the answers

    Match the following pricing objectives to their descriptions:

    <p>Survival = Lower prices to survive tough market times Sales Maximisation = Ensure a high volume of sales for competitive advantage Prestige = High prices to create an exclusive positioning Social considerations = Prices regulated by government influences</p> Signup and view all the answers

    Prices must always be justified economically, regardless of market conditions.

    <p>False</p> Signup and view all the answers

    Which option describes a scenario where pricing differs based on when the service is used?

    <p>Time-based</p> Signup and view all the answers

    What is the primary pricing strategy used by hotels compared to subscription services like BritBox?

    <p>Purchase-based</p> Signup and view all the answers

    In pricing objectives, what is meant by 'economies-of-scale benefits'?

    <p>Cost advantages gained by producing at larger scales.</p> Signup and view all the answers

    Michaelangelo Hotel in NYC utilizes a __________ pricing approach for its room rates.

    <p>purchase-based</p> Signup and view all the answers

    Match the pricing segmentation approaches with their descriptions:

    <p>Time-based = Pricing varies with time of usage Purchase-based = Pricing varies based on customer purchase Customer-based = Pricing varies based on customer segmentation</p> Signup and view all the answers

    What does Beat2 offer in their hospital plans?

    <p>Access to a savings account for day-to-day expenses</p> Signup and view all the answers

    Purchase-based pricing takes into account the time of purchase.

    <p>False</p> Signup and view all the answers

    Define time-based pricing.

    <p>Pricing based on the time of purchase, such as off-peak versus peak times.</p> Signup and view all the answers

    ______ based pricing is determined by the age group of the consumer.

    <p>Customer</p> Signup and view all the answers

    Match the pricing approaches with their definitions:

    <p>Time-based pricing = Price based on time Purchase-based pricing = Price based on location Customer-based pricing = Price based on customer demographics</p> Signup and view all the answers

    Which of the following is an example of purchase-based pricing?

    <p>Higher prices for goods in urban areas compared to rural areas</p> Signup and view all the answers

    BestMed's plans offer comprehensive benefits specifically for elderly patients.

    <p>False</p> Signup and view all the answers

    What determines time-based pricing?

    <p>Time of purchase, such as peak and off-peak times.</p> Signup and view all the answers

    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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    Related Documents

    BEM120_2024_Chapter 9_Class_Notes.pdf

    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'.

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