Q1. Answer the following questions based on the scenario. (4@2 points, total 8 points)

Alicia bought a bottle water at $2.50. Josh commented: "That's crazy. There's a drinking fountain right over there. Why would you ever pay so much money for something you can get for free?"

1. What did Alice buy for $2.50?
2. Why did they think differently?
3. Would Jack buy the water if it was reduced by $0.50? Reduced by $1?
4. What can we do to probably make Jack buy the bottle water?

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Q2. Answer the following questions based on the scenario. (3@2 points, total 6 points)

As the hotel's revenue manager, Ben anticipated the demand for the coming weekend to be high and set the price as $200 per room per night. Now two days before the weekend, Ben found out that the demand is not as strong as he had thought and slashed the price to $150 per room per night.

1. Consider the customer's value formula. Do you think Ben's new price will increase the value offered and help the hotel sell out?
2. What is the impact on the value perceptions of those who have booked the room?
3. How would you respond to angry "early buyers"? How can you prevent this situation from happening?

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Q3. Watch the video and answer the following question. (1 point)

An interview with Mr. Dave Roberts, Senior VP of Consumer Insight & Revenue Strategy, Marriott International, Inc. (https://www.youtube.com/watch?v=b2zg81CSZ64)

1. What are the major risks of slashing prices?