CUSTOMER_CODE
SMUDE
DIVISION_CODE
SMUDE
EVENT_CODE
OCTOBER15
ASSESSMENT_CODE MK0012_OCTOBER15
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
18819
QUESTION_TEXT
What is psychological pricing? Justify whether it is an effective pricing
strategy.
SCHEME OF
EVALUATION
In psychological pricing prices are set at a certain level where the
consumer perceives the price to be fair. The most common method is
odd-pricing using figures that end in 5, 7 or 9. It is believed that
consumers tend to round down price of Rs. 5.95 to 5, rather than 6.
It is true that price has a psychological value. Customers tend to buy a
highly priced product just because they believe that the high price is a
good indicator value. Here, their perception is not reality based it is
psychological based.
It seen that, as buyers do more investigation into the product’s attributes
or the business promotes the product’s characteristics more effectively,
that product knowledge enables buyer to make a more rational, versus
psychological, buying decision and for buyers, price moves down the
value scale.
One use of psychological pricing-ending numbers. Buyers believe that
prices ending in uneven, rather than numbers. But the problem with this
strategy can be that product ending in an odd number are also often
perceived as being lower in value. You must ensure that you choose the
right price and the right strategy for you specific product or service. (5
mark)
Another psychological pricing is reference price. Reference pricing is
when buyers have a psychological response to the price that depicts the
way they relate price and a product. A product can be positioned
amongst highly value or luxury items to imply that it belongs in the same
category, hence capitalizing on reference pricing. But the firm should be
careful with this kind of a positioning strategy, as it can backfire if
buyers feel that your product doesn’t really belong in that category.
A psychological pricing can be effective, only if the product has certain
features that would appeal to an ego-sensitive buyers. For example,
luxury goods are attractive to ego-sensitive buyers. Premium recreational
goods, such as yachts, are attractive to ego-sensitive buyers. Your
strategic planning model must ensure that the pricing strategy selected
for your product or services is a best- fit price. ( 5 mark )
(Total 10 marks)
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
72972
QUESTION_TEXT
Explain briefly the various types of retail stores location.
SCHEME OF
EVALUATION
Free standing sites, city or town locations, inner city, main street,
shopping centeres, strip shopping centres, shopping malls, and other
location opportunities.
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
72975
QUESTION_TEXT
Explain the various retail pricing strategies followed by the retailers to
meet their short and long term objectives.
SCHEME OF
EVALUATION
Every Day Low Pricing (EDLP), Loss leader pricing, Skimming pricing,
Pentration Pricing, Price lining, Psychological pricing, positioning,
Popular price proings, fair pricing.
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
125851
QUESTION_TEXT
Examine the major steps in strategic planning process.
1.
Defining the business philosophy and mission and corporate
objectives
SCHEME OF
EVALUATION
2.
Situation analysis
3.
Identification and evaluation of strategic opportunities
4.
Development of suitable retail mix strategy
5.
Implementation and control
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
125852
QUESTION_TEXT
Discuss the various tools of Integrated Marketing
Communication.
SCHEME OF
EVALUATION
Indirect marketing :
1.
Advertising
2.
Print advertisement
3.
Public relations
4.
Sales promotion
Direct marketing :
1.
Direct mail
2.
Couponing
3.
Telemarketing
4.
Direct selling
5.
Catalogue marketing
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
125859
QUESTION_TEXT
Explain the stages of international business. What are the reasons
for going global?
Stages
SCHEME OF
EVALUATION
1.
Domestic focus
2.
Ethnocentric
3.
Polycentric
4.
Geocentric
4 Marks
Reasons for going global
Push factors
a.
Saturation
b.
Recession
c.
Planning restrictions
Pull factors
a.
Attractive markets
b.
Rise of the middle class
c.
Harmony of market concepts
d.
Choice of ownership
e.
Supplier strategies
6 Marks