entrepreneurship final chapter 9
bait pricing
advertising an inexpensive product and placing it near better more expensive models. the idea is to get the consumer to buy up. sometimes the product will be intentionally ugly.
external reference price
an estimation of what a product should cost based on information external to a customer, based on advice, advertisements, or comparison shopping
going rate
at or near industry average
price discrimination
charging different prices to different groups usually to attract a different demographic (senior discount)
off peak pricing
charging lower prices at certain times to encourage customers to come in during slack periods
bundling
combining two or more products in one unit and pricing it less than if the units were sold seperately
periodic discounting
patterend or systematic price reduction
goods
physical products
internal reference price
a consumers mental image of what a products price should be
referral discount
a discount given to a customer who refers a friend to the business
augmented product
core product plus features that tend to differentiate it from the competition
law of supply and demand
economic theory that describes how the demand for products or services and the supply of them affect each toher
idea evaluation
exhaustive process of specifying the detaisl of each ideas technological feasability, cost, marketed and market potential
limit pricing
extremely low penetration price to discourage competitors from entering the market
everyday low price
implying that the price stated is always low and always a good deal
tangibility
items capability of being touched seen tasted or felt
commercialization
making the new producty available to consumers
markup pricing
price setting method where an amount is added to the cost of a product to set the retail price and to create a profit
customary pricing
prices based on tradition, hard to raise above this limit
inelastic product
product for whcih there are few substitutes and for which a change in price makes very little difference in quantity purchased
elastic product
product for which there are any number of substitutes and for which a change in proce makes a difference in quantity purchased
four Ps of marketing
product price promotion placement
me too products
products essentially simillar to something already on the market
heterogeneity
quality of a service in which each time it is provided it will be slightly different from the previous time
price signaling
setting a high price on a product in order to imply high quality or similar quality to a competitor
penetration pricing
setting a low price to get a market share
prestige pricing
setting a price above the competition so as to indicate a higher quality or that a product is a status symbol
price skimming
setting a price at the highest level the market will bear usually because there is no competition at the time
odd-even pricing
setting a price that ends in the number 5 7 or 9
partitioned pricing
setting the price for a base item then charging extra for each additional component
markup
the amount an entrepreneur adds to the cost to provide a profit
margin
the amount of profit usually stated as a percentage of total price
target market
the group of people on which a marketer focuses promotion and sales efforts
optimum price
the highest price that will produce your desired level of sales in your intended market
elasticity
the idae that the market's demand for a product or service is sensitive to changes in its price
price lining
the practice of setting three price points, good quality, better quality, best quality
idea screening
the process of selecting the most promising ideas
core product
the very basic description of what a product is, a bar of soap, a house, a cleaning service
reference pricing
two similar products displayed side by side in an ad or at the store but at different prices. implies same product but different price
idea generation
use the scamper approach to do this
perishability
a service that exhibits this in that if it is not used when offered it CANNOT be saved for later use
price gouging
charging an outrageously high price for somethin
multiple or bonus pack
combining more than one unit of the same product and pricing it lower than if each unit were sold seperately
professional pricing
fees set by doctors lawyers and other professionals
services
non physical products
random discounting
nonsystematic price reduction
inseperability
quality of a service in which teh service being done cannoy be disconnected from the provider of the service
secondary market pricing
one price for the primary market and a different price for secondary markets
periodic or random discounting
sales conducting at either predictabe or nonpredictable intervales
loss leaders
selling a name brand at or near cost in order to attract traffic to a retailer (putting pampers in the back of a toy store)
product line pricing
selling products at different price points to attract the low mid and high end customers (different hotels)
captive pricing
setting the price for an item relatively low and then charging much higher prices for the expendables it uses.
