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the subject is Marketing. 2nd Canadian edition

Lamb Chapter 15 Web Exercise

Pricing and Setting the Right Price

Vignette: Priceline operates a shopping service that illustrates how supply and demand determine price. The customer tells what he or she is willing to pay, and Priceline looks for the best deal.

Featured URL: www.priceline.com

Fill 'Er Up
For both products and services, price has a definite effect on buying decisions. If two items that look the same are side by side and one is less expensive than the other, most shoppers will be drawn to the lower price. But other factors can be involved. If we perceive all gasoline to be of essentially the same quality, we will likely drive up to the pump where we pay less per litre. However, if we believe we get better service at a certain filling station, or that one brand of gasoline is better for the car or for the environment, or that the location is more convenient, this will influence our choice.

Travel is an appealing activity; it is also an activity that can vary considerably in price. There are a number of sites on the Web that offer search functions to find you the best deal for the destination you have in mind. Plan a trip for next July for two weeks to one place in each of the following three categories.

  • A major American city: Boston, San Francisco, Houston, Los Angeles, or New York.
  • An island destination: Barbados, Fiji, Kauai, Tahiti, Crete.
  • A famous cultural attraction: the Louvre, Topkapi , the Taj Mahal, the Parthenon, the Great Wall of China.
  1. Use Priceline plus two of the travel Websites listed in the Resources section that sell tickets and accommodations.
  2. For each destination, compare prices for airfares and package deals (airfare plus accommodation).
  3. Which of the three sites gives the best deal for each trip?
  4. Which of the travel sites that you used made it easiest for you to get the information you needed?

Resources

Travel Sites

Portals and Online Malls

Auctions


Extend the Activity

These Web Exercises provide an additional opportunity for exploration of Chapter 15.

1. Luxury Items

Snob appeal is a motivating factor when it comes to spending a lot of money on something. The following thirty names have been identified with luxury items. Can you match each name with the types of products sold under that name?

Gucci Fendi Hugo Boss Bugatti Christian Dior
Montblanc Dolce & Gabbana T. LeClerc Givenchy Moet & Chandon
Joseph Schmidt Bulgari Cartier Cole Haan Celine
Ralph Lauren Michael Kors Robert Clergerie Hermes Louis Vuitton
Baccarat Ferragamo Porthault Chanel Pratesi
Julius Vesz Breitling Laguiole John Varvatos John Galliano

What types of products or services are you willing to pay more for based on the name or reputation of that brand? Why?

List ten items that you believe can be found cheaply that are just as good as the more expensive version.

2. Any door will do?

A portal is a collection of links on the Web, similar to an on-line mall. Using the sites listed in the Resources section, compare several portals with the same number of malls. How do portals differ from malls? If you were looking for the best prices for toys, which would be more helpful to you? What about books? CDs or videos?

3. Going, Going, Gone

As you read in the chapter, a number of factors affect pricing. Customer demand and available supply have been affected by an on-line phenomenon-auctions. Visit the auction sites in the Resources section. If you had some hockey trading cards or a pair of ruby earrings you wanted to sell, how would you go about placing them on one of the auction sites? What could you do to market these items so as to get the best price possible?


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Activity Resources Extend the Activity