SBM Chapter 11

retailers

intermediary business that sells to consumers or end users of a product (usually in single or small qualities)

production line layout

material flows in on one side of operation and continues on the other end

moves and remodels

may be clause that landlord can move your business elsewhere. set time limits and return rights in any forced move. if landlord decides to remodel you shouldn't have to pay for it

traffic generators

other businesses that bring customers to the area (ex: american eagle to auntie ann's)

bundle

promoting sales of a second p/s that's not going well or is new

intermediaries

provides service of getting product to end consumer. mailman

periodic discounting

sales that happen regularly

direct marketing

sales where the entrepreneur is selling to end user of the p/s without any other sales intermediaries involved

captive pricing

sell something (usually a base system) at low price but expendables it uses are relatively expensive

direct exporting

selling directly to foreign buyers or distributors

odd-even pricing

setting a price that ends with 5,7, or 9. ex: 9.99

premium pricing

setting price above competition to indicate higher quality

prestige pricing

setting price above competition to indicate your product is a status symbol

contract manufacturing

a firm with capabilities to produce your product is contracted to manufacture it for you

rent default

ask to change lease to specify landlord needs to alert you immediately on rent due date

price lining

attempt to appeal to several different markets. p/s may appeal to high mid and low end market

skimming

charging highest possible price market will bear

off peak pricing

charging lower prices at usually slow rimes

location for (service) firms

clients location, mutually accessible location, or at firms location. depends on the service provided

elasticity

dropping price to increase sales

internal reference pricing

expectations on what a price should be based on own knowledge

channels

firms who connect producers of goods and services with customers

telemarketing

form of direct marketing. contacting through the phone about buying ps

direct sales

form of direct marketing. door to door, party sales, vending machines, fair booth

direct mail

form of direct marketing. post cards, catalogs, emails etc

micro inventory

form of direct marketing. set of p/s that consist of one or few items

guerrilla marketing

form of direct marketing. unusual and nearly free advertisement (ex: fliers on cars)

external reference pricing

gather information from outside sources

accelerator

generally focuses on helping one type of business accelerate their move from start-up to pitch for investor money

process layout

groups similar machines/functions together

noncomplete

negotiate a clause limiting the landlords ability to lease competing businesses

hours of operation

negotiate times that fit your business model (with landlord)

sheltered workshops

nonprofit organization that provides business services by using workers with disabilities or are rehabilitated

sales promotion

one of the major forms of marketing. along with advertisement, press/public relations, personal selling and direct marketing

optimum price

price that would generate the most income possible for the p/s you're selling over a year. factors: demand, value delivered to customers, prices set by competitors, and business strategy and product placement

market share

pricing toward low end of competition to take market share from company. popular in maturity phase

inelastic product

something that's essential to how you live and doesn't have many substitutes

freight forwarders

specialists in export

use of premises

specify what you'll do or sell but too exact of a description could prevent you from expanding the ps. do this when leasing

manufacturer's suggested retail price

target price set by manufacturer for a p/s intended to provide profit for each intermediary in distribution channel

markup

the amount an entrepreneur adds to costs to provide a profit

margin

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

indirect exporting

use agents export management company or exporting trading company as intermediaries to handle process

multichannel marketing

using several outlets for contacting your company

hidden charges

when leasing look for this. charges that don't have to be listed in terms sheet. ask specifically for a list of all expenses or charges

law of supply and demand

when supply of p/s is generally met with price that is stable and average

random discounting

where you run a sale unexpectedly