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Flashcards in Chapter 6: The Pricing of Services Deck (29)
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1

The actual dollar price paid by the consumer for a product.

Monetary cost

2

The time the customer has to spend to acquire the service.

Time cost

3

The physical energy spent by the customer to acquire the service.

Energy cost

4

The mental energy spent by the customer to acquire the service.

Psychic energy

5

The worth assigned to the product by the customer.

Product value

6

The worth assigned to the service by the customer.

Service value

7

The worth assigned to the service-providing personnel by the customer.

Personnel value

8

The worth assigned to the image of the service or service provider by the customer.

Image value

9

Costs that are planned and accrued during the operating period regardless of the level of production and sales.

Fixed costs

10

Costs that are directly associated with increases in production and sales.

Variable costs

11

Based on the idea of the more you produce, the cheaper it is to produce it.... the cheaper it is to produce it, the cheaper it can be sold.... the cheaper it can be sold, the more is sold.... the more it is sold, the more it can be produced (and so on).

Economies of scale

12

The type of market demand when a change in the price of a service is greater than a change in quantity demanded.

Inelastic demand

13

A measure of the responsiveness of a demand for a service relative to a change in price for another service.

Cross-price elasticity

14

The effect of cross-price elasticity in which an increase in the price of product A decreases the demand for product B.

Complements

15

The effect of cross-price elasticity in which an increase in the price of product A increases the demand for product B.

Substitutes

16

The practice of charging different customers different prices for essentially the same service.

Price discrimination

17

Items that customers buy often, so they are very well aware of typical prices.

Signpost items

18

The price a consumer considers to capture the value he or she places on the benefits.

Reservation price

19

The practice of marketing two or more products and/or services in a single package at a single price.

Price bundling

20

When retailers purchase enough product on deal to carry over until the product is being sold on deal again.

Forward buying

21

The practice of pricing multiple versions of the same product or grouping similar products together.

Product-line pricing

22

Cost-driven price increases are perceived as fair, whereas demand-driven price increases are viewed as unfair.

Dual entitlement

23

Pricing strategies that are designed to reduce the amount of perceived risk associated with a purchase.

Satisfaction-based pricing

24

A pricing strategy that charges customers for services actually used as opposed to overall "membership" fees.

Benefit-driven pricing

25

A pricing strategy in which the customer pays a fixed price and the provider assumes the risk of price increases and cost overruns.

Flat-rate pricing

26

Pricing strategies that encourage customers to enhance and expand their dealings with the service provider.

Relationship pricing

27

Price-bundling technique that allows consumers to either buy Service A and Service B together or purchase one service separately.

Mixed bundling

28

Pricing strategies that appeal to economically minded consumers by delivering the best and most cost-effective service for the price.

Efficiency pricing

29

The practice of offering discounts without conceding margins on a permanent basis.

Adaptive pricing