Question 1

A hotel that offers a New Year's Eve package for couples at a more expensive rate would be an example of what kind of value added feature?

Accepted Answer

A)   Experiential
B)   Trust
C)   Social
D)   Identification with the organization

Question 2

Match pricing's main goal is to:

Accepted Answer

A)   Compare high margins at the expense of high sales volume
B)   Use other variables to determine market price
C)   Establish a benchmark price for the product in the industry
D)   Offer the same price as a direct competitor

Question 3

The fair market share of a hotel is always greater than a hotel's yield percentage.

Accepted Answer

A) True 
 B)False  False

Question 4

Revenue per available customer in a hotel would include internet charges.

Accepted Answer

A) True 
 B)False  True

Question 5

Why is the price important to marketers?

Accepted Answer

A)   It is the revenue producing part of the marketing mix
B)   It is a force in attracting attention and creating sales
C)   It can have an effect on customer loyalty
D)   All of the above

Question 6

A product's break even price is calculated by dividing fixed costs by the product's profit margin.

Accepted Answer

A) True 
 B)False

Question 7

A major problem with cost- percentage pricing is that:

Accepted Answer

A)   It makes high cost items expensive to most customers
B)   It's completely based on costs
C)   It ignores the customer's perception of value for the price paid
D)   All of the above D

Question 8

A 500 room hotel has a $150 average room rate, and is running at 85% occupancy. What is the hotel's RevPAR?

Accepted Answer

A)   $750,000
B)   $127.50
C)   $63,750
D)   $12,750

Question 9

These are examples of the ways to change price, except:

Accepted Answer

A)   Change the quality of goods and services provided by the seller
B)   Change the form of payment
C)   Change the market perception of the goods and services
D)   Change the time and place of payment

Question 10

The property taxes for a hotel are a semivariable cost.

Accepted Answer

A) True 
 B)False

Question 11

Psychological pricing includes the visibility factor of hospitality products.

Accepted Answer

A) True 
 B)False

Question 12

The main reason that penetration pricing strategies work for Jet Blue, Southwest, and Ryan Air is:

Accepted Answer

A)   Their customers are not price sensitive
B)   They all match each other's prices
C)   They have a lower cost structure
D)   They have competitive protection against each other

Question 13

For a restaurant, the cost of beef is a(n) _______ cost.

Accepted Answer

A)   Fixed
B)   Operating
C)   Stagnant
D)   Variable

Question 14

Temporal value is concerned with adjusting prices based on different times of the year.

Accepted Answer

A) True 
 B)False

Question 15

"Leaving money on the table" refers to businesses that price their products:

Accepted Answer

A)   Less than the reservation price
B)   Exactly the same as the reservation price
C)   Without taking the reservation price into account
D)   More than the reservation price

Question 16

The most basic element that revenue management depends on is:

Accepted Answer

A)   A product with a high perceived value
B)   Volume discounts with groups
C)   Maximized profits
D)   Demand forecasting

Question 17

A new offering that internet sites, such as Expedia, have is price bundling. Why?

Accepted Answer

A)   It is more cost effective to book everything at one sitting
B)   It makes the trip cheaper for the consumer.
C)   It takes less time for the computer system to process everything at once
D)   It hides the cost of each part of the trip

Question 18

Why is revenue management suitable for the hotel industry?

Accepted Answer

A)   A hotel room has a fixed number of hotel rooms; you can't increase capacity
B)   The necessary software is now available at reasonable prices
C)   The product is perishable
D)   Both A and C

Question 19

A skim strategy for pricing works best when:

Accepted Answer

A)   Many competitors are located nearby
B)   The product offered is easily replicated by competitors
C)   Perceived value of the product is very important to the customer
D)   Customers are not price sensitive

Question 20

Value based pricing:

Accepted Answer

A)   Forces managers to keep in touch with the needs and preferences of the customer
B)   Is semi- dependent on the cost of the product
C)   Includes a customer's perceived value of the product
D)   Both A and C

Exam 15: The Pricing Decision

A hotel that offers a New Year's Eve package for couples at a more expensive rate would be an example of what kind of value added feature?

Correct AnswerverifiedShow Answer

Match pricing's main goal is to:

Correct AnswerverifiedShow Answer

The fair market share of a hotel is always greater than a hotel's yield percentage.

Correct AnswerverifiedFalse

Revenue per available customer in a hotel would include internet charges.

Correct AnswerverifiedTrue

Why is the price important to marketers?

Correct AnswerverifiedShow Answer

A product's break even price is calculated by dividing fixed costs by the product's profit margin.

Correct AnswerverifiedShow Answer

A major problem with cost- percentage pricing is that:

Correct AnswerverifiedD

A 500 room hotel has a $150 average room rate, and is running at 85% occupancy. What is the hotel's RevPAR?

Correct AnswerverifiedShow Answer

These are examples of the ways to change price, except:

Correct AnswerverifiedShow Answer

The property taxes for a hotel are a semivariable cost.

Correct AnswerverifiedShow Answer

Psychological pricing includes the visibility factor of hospitality products.

Correct AnswerverifiedShow Answer

The main reason that penetration pricing strategies work for Jet Blue, Southwest, and Ryan Air is:

Correct AnswerverifiedShow Answer

For a restaurant, the cost of beef is a(n) _______ cost.

Correct AnswerverifiedShow Answer

Temporal value is concerned with adjusting prices based on different times of the year.

Correct AnswerverifiedShow Answer

"Leaving money on the table" refers to businesses that price their products:

Correct AnswerverifiedShow Answer

The most basic element that revenue management depends on is:

Correct AnswerverifiedShow Answer

A new offering that internet sites, such as Expedia, have is price bundling. Why?

Correct AnswerverifiedShow Answer

Why is revenue management suitable for the hotel industry?

Correct AnswerverifiedShow Answer

A skim strategy for pricing works best when:

Correct AnswerverifiedShow Answer

Value based pricing:

Correct AnswerverifiedShow Answer

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