Price Quiz :Marketing in a Digital World (Digital Marketing Specialization) Answers 2025

Question 1

Which one is NOT a pricing concept mentioned in the course?

❌ Price fairness
❌ Reference prices
❌ Price elasticity
✅ Break-even analysis

Explanation:
The course focuses on behavioral and strategic pricing concepts. Break-even analysis is a financial accounting tool, not emphasized as a pricing concept in this context.

Question 2

Making the right pricing decision is crucial because:

❌ It helps the firm be unique
✅ It affects a firm’s profitability
❌ It creates value for customers
❌ It provides a sustainable competitive advantage

Explanation:
Price directly impacts revenue and margins, making it the most immediate driver of profitability.

Question 3

Which factors should firms consider when setting a price?

❌ Cost of production
❌ Customer’s willingness to pay
❌ Price of competing products
✅ All of the above

Explanation:
Effective pricing balances costs, customer value, and competitive benchmarks.

Question 4

Why is the Freemium model more beneficial for digital products or services?

❌ Because the 5% Rule of Thumb applies
❌ Free options provide so much value that premium isn’t needed
❌ Economic value directly drives premium intent
✅ Marginal cost of adding a new user is close to zero

Explanation:
Digital products scale cheaply—near-zero marginal cost makes Freemium viable.

Question 5

Freemium models are commonly employed in:

❌ Smartphone apps
❌ Social media and communication platforms
❌ Software
✅ All of the above

Explanation:
Freemium thrives across apps, platforms, and software where scaling users is inexpensive.

Question 6

What happens if a firm sets prices too high?

❌ The firm may lose potential revenue
❌ The firm may lose potential sales
❌ The firm will be less profitable
✅ All of the above

Explanation:
Overpricing reduces demand, hurting sales volume, revenue, and profits.

Question 7

Pay What You Want (PWYW) is a good way to maximize profit.

❌ True
✅ False

Explanation:
PWYW is typically used for engagement, awareness, or fairness, not profit maximization.

Question 8

Which statement about PWYW is CORRECT?

❌ Sustainable and broadly beneficial
❌ Firm sets reference and minimum price
❌ Customers must pay something
✅ Firm may suggest a price, but customers can pay any amount—even zero

Explanation:
PWYW allows complete pricing freedom, sometimes including zero payment.

Question 9

How can Freemium businesses convert Free users to Premium?

❌ Offer more benefits to Premium members
❌ Continuously add appealing features
❌ Increase stickiness to reduce switching
✅ All of the above

Explanation:
Conversion relies on value differentiation, feature upgrades, and lock-in effects.

Question 10

According to Gu, Kannan & Ma (2019) in Harvard Business Review, how is Versioning implemented in SaaS?

❌ Creating customer enjoyment only
❌ Encouraging free mentality
❌ Constant upgrades with more free features
✅ Extending premium product lines based on customer behavior to increase willingness to pay

Explanation:
Versioning tailors tiered offerings using customer behavior insights to drive upgrades.

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