I. IDENTIFICATION. Directions: Read each item carefully. Identify the correct terminology to complete the given statements. Place your answer on the space provided after each number.

1. ________________ It indicates that is better to unbundle gains and bundle pains 2. ________________ It is an alternative approach to price segmentation from add-ons and other individual unit price structures. 3. ________________The price is often constructed from come combination of base plus unit prices, where unit is some metric that reflect use. 4. ________________ It argues for a low price on popular or frequently purchased products to induce purchase of less popular or frequently purchased items that are priced to yield a higher relative contribution margin. 5. ________________These are common in partial ownership industries, such as time-share vacation homes, leased-time yachting, or car sharing.

6. ________________ It is determined through some measurement of the units consumed.

7. ________________ It is a fixed sum charged to all customers regardless of their level of consumption. 8. ________________ Uses two prices for selling multiple products that function together to deliver value to customers. 9. ________________ It defines the method by which total transaction prices are determined. 10. _______________ It can enable a firm to better capture profits from their customers.

11. ________________ It deals with the sale of two or more distinct products at a single bundled price. 12________________It is a strategy that benefits from heterogeneity in demand- specifically, demand that is contrasting between products. 13. ________________It Influence pricing decisions in many areas outside of subscriptions. 14. ________________The offerings of these include not only the license to use the software, but also the management of the software and the customer's data itself.

15. ________________ Calculates the expected profits earned from a customer during the period, given a customer's actual purchase behavior. 16. ________________ It is an extreme form of price followership in which firm matches its competitor's price actions at every stage of the game. 17. . ________________ He said that "Speak softly and carry a big stick." 18. ________________ it refers to the cost savings that a firm can gain that depend on the size of the firm as measured by its long-run, sustainable rate of output. 19. ________________ It refers to the method by which booking limits are defined for the relevant fare classes. 20. ________________ It is a technique to maximize revenue by dynamically controlling the number of units sold within any given fare class.

True or False: Write true if the statement is incorrect and false if correct. 1. ________________ The benefits delivered through subscription arrangement are less than those delivered on a pay-per-item basis.

2. ________________ With some subscription offerings, customers tent to consume more of the product than they otherwise would.

3. ________________ The method calculating the customer period value is extremely similar to that of the customer lifetime value.

4. ________________ Customers does not suffer from uncertainty about their ability to predict their future demand.

5. _______________ Customers with a higher retention rate have a higher customer period value.

True or False: Write true if the statement is incorrect and false if correct. 6. ________________ Industries with more competitors tend to be able to monitor one another's pricing practices and respond appropriately.

7. ________________ Capacity reallocations with multiple classes can be managed conceptually with the same approach as that presented in this section.

8. ________________ To manage cancellations and no-shows, we have four techniques are commonly used in yield management.

9. ________________ Optimal capacity allocations with more than two price classes quickly become more computationally complicated as price classes are added.

10. _______________ The practice of yield management expands beyond the airline industry and can't be use in a number of industries.

11. ________________ Preparatory pricing is one means by which a seller may use its monopoly power unilaterally to preserve or attempt to gain monopoly. 12. ________________ In mature phase a product may become outdated as new products are introduced. 13. ________________ The growth phase of the product life cycle is marked with rapid changes in every dimension of the newly emerged market. 14. ________________ Market growth is limited as product penetration reaches saturation. 15. ________________ Courts do not require a written contract between competitors to demonstrate a collective agreement. 6. ________________ Manufacturers use "exclusive selling contracts" to prevent retailers from purchasing a certain type of product from other manufacturers.

17. ________________ In a tying arrangement, the seller conditions the sale of one product on the simultaneous purchase or a second, usually less-desirable product.

18. ________________ In exclusive arrangement suppliers may refuse to sell to whoever they choose-manufacturers or customers-so long as the decision is not part of a horizontal agreement with competitors or part of a strategy to acquire or maintain a monopoly.

19.________________Resale price encouragement techniques are also called vertical non-price restraints

20. ________________ Sellers may mandate that dealers sell their product only to certain customers or only within certain geographic territories.

II.ESSAY. Explain each question, based on what you have learned on the topic discussed. 10 pts each.

A. How should discount decisions be managed? B. Why might some executives push for more discounts, while others push for fewer?