Module 2

Question 2

Also known as price discrimination in economics.

Answer 2

Price segmentation

Question 3

Is charging different customer different prices for and otherwise identical or similar product.

Answer 3

Price segmentation

Question 4

Refers to a market situation where the prospective buyers of any products are found to be uniform in their needs, habit, choices, nature, etc…

Answer 4

Market homogeneity

Question 5

Can be seen in terms of bran affinity, benefits demanded, or willingness to pay.

Answer 5

Market heterogeneity

Question 6

Once sold to a customer, that customer should find it difficult to resell to another customer.

Answer 6

Limited transferability

Question 7

Value of price segmentation (2) key developments:

Answer 7

1. It can improve the firms profits.
2. It can improve the number of customers served by actually lowering the market entry price.

Question 8

The key to price segmentation is the ability to separate customers who are willing to pay more from those who are not.

Answer 8

The segmentation hedges key

Question 9

The (3) popular price segmentation classified strategies:

Answer 9

First degree price discrimination
Second degree price discrimination
Third degree price segmentation

Question 10

Also knowm as perfect price discrimination.

Answer 10

First degree price discrimination

Question 11

Charging every customer at the price that matches their willingness to pay.

Answer 11

First degree price discrimination

Question 12

Also know as quantity based second-degree dicrimination.

Answer 12

Second degree price discrimination

Question 13

Charging different customer different prices according to the quantity purchase.
Ex. Wholesalers

Answer 13

Second degree price discrimination

Question 14

Charging different markets or different segments different prices. With a greater benefit cost a higher price.

Answer 14

Third degree price discrimination

Question 15

Requires complete information. Willingness to pay in all situations.

Answer 15

Complete price discrimination

Question 16

Price variances based upon specific attributes.

Answer 16

Direct segmentation

Question 17

Prices variances based upon a proxy.

Answer 17

Indirect segmentation

Question 18

Use to capture marginal and sometimes even specific customers in unique situations.

Answer 18

Tactical price segmentation

Question 19

Approaches are those in which definition of the price structure itself enables different customers to pay different prices.

Answer 19

Strategical price segmentation

Question 20

Price the same or similar product differently for different customer segements.

Answer 20

Common price segmentation hedges

Question 21

Highly correlated with customer willingness to pay and culturally accepted.

Answer 21

Requirements for effective segmentation hedges

Question 22

(2) Designing segmentation hedges:

Answer 22

Requirements for effective segmentation hedges

Common price segmentation hedges

Question 23

Consumers: gender, age, income, profession, and family structure.

Answer 23

Demographic segmentation

Question 24

Businesses: industry, location, company size, status, performance, etc…

Answer 24

Firmographics segmentation

Question 25

Call to action.

Answer 25

Time of purchase

Question 26

The price that these customers would expect to pay would vary greatly between location of purchase.

Answer 26

Purchase location

Question 27

Rely upon buyers willingness to pay: Measures willingness to pay Customer loyalty Signals price sensitivity

Answer 27

Buyer self identification

Question 28

Relies upon the addition and subtraction of specific features to define the segmentation hedges.

Answer 28

Product-engineered

Question 29

Either in a single transaction or in multiple transactions. Common price segmentation hedge. Order size Frequent purchase

Answer 29

Quantity purchased

Question 30

Is over final price it is a standard step within the sale process. Is it fraught with many biases from both the seller's and the buyer's position.

Answer 30

Negotiation

Question 32

Price segmentation based on product usage relies on the heterogeneity of value customers place on a product in relation to their usage patterns.

Answer 32

Customer usage

Question 33

Are charges to a customer with a bank account for various services provided by a bank or penalties for specific activities of the customer fees for a variety of account.

Answer 33

Bank fees

Question 34

Is a place of business where alcoholic drinks serve along with a limited variety of foods and snack items are served to travellers and locals.

Answer 34

Tavern drink

Question 35

Airlines segment customers according to willingness to pay in (3) MAJOR CLASSES:

Answer 35

First class Business class Coach

Question 36

Consists of business-to-business sales.

Answer 36

Industrial market