Question

Question 16

The customers at Peete's coffee shop want to grab a quick cup of coffee before boarding the Metra train into Chicago. The sign in the window promises "Quick, In-and-Out Service," and usually Peete's Coffee Shop keeps that promise. But one morning, customers were frustrated when the staff behind the counter showed more interest in gossiping about their social lives than in waiting on customers. Peete's coffee shop is suffering from a ________ gap.

                knowledge

                social expectations

                delivery

                communications

                standards

Question 17

The marketing of services such as lawn care by TruGreen differs from product marketing because services are all of these except

                inseparable.

                intangible.

                renewable.

                perishable.

                heterogeneous.

Question 18

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following except

                rent on the restaurant building.

                hours worked by the servers.

                energy costs.

                hours worked by cooks.

                ingredients used in preparing food.

Question 19

The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of

                the target return effect.

                the substitution effect.

                dynamic pricing.

                the income effect.

                cross-price elasticity.

Question 20

For which of the following is demand likely to be least sensitive to price increases?

                restaurant meals

                theater tickets

                a specific brand of cereal

                spring break vacations

                prescription drugs

Question 21

Which of the following is most likely to be a pure competitive market?

                soybeans

                soft drinks

                computer operating systems

                fast-food restaurants

                cereal

Question 22

Natalie operates on a pretty tight budget. She is a price-conscious shopper and usually buys store or generic brands to save money. Recently, however, Natalie was given a pretty substantial raise. As such, she has altered her shopping patterns and now regularly buys more expensive, name-brand goods. This is an example of

                the substitution effect.

                cross-price elasticity.

                the income effect.

                the target return effect.

                the price inelasticity coefficient.

Question 23

A customer orientation toward pricing implicitly invokes the concept of

                positioning.

                value.

                knowing the dimensions of the target market.

                the income effect.

                profit.

Question 24

Which of the following markets is most likely to be an Oligopoly?

                pens and pencils

                smartphone service providers

                electrical service to the home

                soybeans

                men's clothing

Question 25

When Jennifer Hudson decides how to price new products in her gift store, she measures the value of her product offerings against those of the other stores in her area. Jennifer Hudson uses a ________ pricing strategy.

                competitor-oriented

                maximizing profits

                target profit

                target return

                sales oriented

Answer 1

Question 16) Peete's is suffering from Delivery gap as the service specification is that the customers will be served quickly but the service delivery is not matching the service specifiation. This type of gap when service delivery does not match service specifiation is termed as delivery gap.

Question 17) Services are all except Renewable i.e. once a service is been delivered, it cannot be renewed .

Question 18) The variavle cost will include all except Rent on the restaurant building as this is a fixed cost and not a variable cost. No matter how long the restaurant is open, the rent is a fixed cost.

Question 19) This is known as Dynamic pricing as the pricing is changed based upon demand. It is not fixed.

Question 20) The demand will be less sensitive for price increase for Prescription drugs as this will be the necessity product and one will have to buy the same drugs irrespective of price.

Question 21) Soyabeans are more likely to be pure competitive market as larger number of seller are selling identical product

Question 22) This is an example of Income effect as Natalie's shopping preference changed as her discretionary income increased due to increase in salary

Question 23) Customer orientation towards pricing implicity invokes concept of Value as customers perceive value in product based on its price.

Question 24) Smartphone service providers market is most likely to be oligopoly as few firms dominate the market.

Question 25) Jennifer hudson uses a competitor oriented pricing as she measures the other stores prices and based on that decides her prices.