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.