ESBM Ch. 9

Skimming

Setting a price at the highest level the market will beat, 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 and then charging extra for each additional component

4 Ps of Marketing

The 4 major components of a marketing effort-product, price,promotion, and placement. Sometimes called the marketing mix

Markup

The amount an ent. adds to costs to provide a profit

Margin

The amount of profit, usually stated as a percentage of the total price

Law of supply and demand

The economic theory that describes how the demand for products (or services) and the supply of them affect each other

Total Product

The entire bundle of products, services, and meanings of your offering; includes extras like service, warranty, or delivery, as well as what the product means to the customer

Augmented Product

Core product plus features that tend to differentiate it from the competition

Elasticity

From economics, the idea that the market's demand for a product or service is sensitive to changes in its price

Inelastic Product

Product for which there are few substitutes and for which a change in price makes very little difference in quanity purchased

Me-Too Products

Products essentially similar to something already on the market

Periodic or Random Discounting

Sales conducted at either predictable or nonpredictable intervals

Prestige or Premium Pricing

Setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol

Captive Pricing

Setting the price for an item relatively low and then charging much higher prices for the expendables it uses

Internal Reference Price

A consumer's mental image of what a product's price should be

Referral Discount

A discount given to a customer who refers a friend to the business

Heterogeneity

A quality of a service in which each time it is provided it will be slightly different from the previous time

Inseparability

A quality of a service in which the service being done cannot be disconnected from the provider of the service

Perishability

A service exhibits perishability in that if it is not used when offered, it cannot be saved for later use

Target Market

The group of people on which a marketer focuses promotion and sales efforts

Price Lining

The practice of setting (usually) theee price points: good quality, better quality, best quality

Core Product

The very basic description of what a product is-a bar of soap, a house-cleaning service

Bundling

Combining two or more products in one unit and pricing it less than if tge units were sold separately

Services

A nonphysical product

Goods

A physical product

Markup Pricing

A price-setting method where an amount is added to the cost of a product to set the retail price and provide a profit

External Reference Price

An estimation of what a price should be based on information external to a consumer, such as advice, advertisements, or comparison shopping

Tangibility

An item's capability of being touched, seen, tasted, or felt

Price Gouging

Charging an outrageously high price for something

Off-Peak Pricing

Charging lower prices at certain times to encourage customers to come during slack periods

Multiple or Bonus Pack

Combining more than one unit of the same product and pricing it lower than if each unit were sold separately

Elastic Product

Product for which there are any number of substitues and for which a change in price makes a difference in quantity purchased