Chapter 11: Small Business Pricing, Distribution, and Location

price lining

This pricing strategy attempts to appeal to several different markets and budgets. Each product has a different level of quality or number of features. Often there are three levels: a bare bones, midrange, and high-end with the bells and whistles.

______ are firms that specialize in arranging international shipments, which include packaging, transportation, and paperwork.

Freight forwarders

At a remote location

Fulfillment centers

a sales promotion that is likely to be used by businesses

Introductory techniques like giveaways, samples, and tastings. Discounting using coupons, rebates, and other promotions. Contests like sweepstakes and games that introduce the new product.

In the context of concessions associated with subletting properties, _____ refer to the permanent modifications made to a location to fit a business's needs.

leasehold improvements

______ refers to sales conducted at predictable intervals, such as before major holidays.

Periodic discounting

A_______promotion is a form of communication that encourages the customer to act immediately.

sales

multichannel marketing

A business should clearly provide contact information on its product's packaging in case the retailer doesn't carry the product. It refers to using several outlets for contacting your customers. A business should include multiple ways for the customer to make contact including a phone number, website address, and email.

multichannel marketing

A business should include multiple ways for the customer to make contact including a phone number, website address, and email. It refers to using several outlets for contacting your customers. A business should clearly provide contact information on its product's packaging in case the retailer doesn't carry the product.

Increasing market share

A firm's product or service should be priced lower than that of the competition to take the competitor's percentage of total sales amount.

direct mail

Businesses don't have to make major inventory investments, thus there are low costs for getting started. It takes many forms including postcards, catalogs, and videos. One advantage of using the direct mail approach is the ability to sell on a business' schedule.

______ is a strategy where the price for an item is relatively low and then charging much higher prices for the expendables it uses.

Captive pricing

______ are the people and firms who connect producers of goods and services with customers.

Channels

examples of an external reference price

Comparison shopping. Newspaper advertisements Advice from friends.

______ is an existing firm with the correct manufacturing capabilities that makes products for other businesses.

Contract manufacturer

______ exporting is exporting without using intermediaries.

Direct

the following issues is a firm owner working out of a leased workspace likely to face in the context of day-to-day operations

Hidden charges that have not been added to a property's lease papers Lack of specifications about operating hours

optimum price

If sales are too high, the owner might ask whether a price is too low. If sales are too low, the owner might ask whether the price is too high. It is the highest price that will generate the most income for a good or service.

small business look at to achieve to ensure their survival in the early years

Increasing market share Maximizing profits

______ exporting is exporting using intermediaries such as agents, export management companies, or export trading companies.

Indirect

At a remote location

Infrequent face-to-face meetings with a client

telemarketing

It can be either inbound where customers call the company or outbound where the company calls the customer. It is the most expensive form of direct marketing. Many consumers find this type of marketing annoying, but it is still a viable form of direct marketing.

direct marketing

It enables a manufacturer to control where a product goes. It can be relatively inexpensive.

odd-even pricing

It is simply setting a price that ends with a 9, 7, or 5. Studies have found that customers positively react to odd prices. Consumers believe that products that are priced using an odd number cost less.

In the context of traditional layouts for retail operations, which of the following are true of the free-form layout

It lays out a store in sections with aisles meandering through the store. It has visual impact.

guerrilla marketing

Its a unusual and nearly free form of advertising. The key to it is to capture the customer's attention. It is a fairly new marketing concept.

______ are sales made from ads in newspapers or magazines, with purchases taken online or by phone as well as by mail.

Mail order

freight forwarders

Many of these companies are small businesses and have faced many of the same problems. They are specialists in export-related activities. Their services include tariff schedules, shipping, insurance, transportation arrangements, and custom clearing.

______ marketing is using several different channels to reach your customers.

Multichannel

______ sets a price that ends in the number 5, 7, or 9.

Odd-even pricing

At a client's location

Organizing of services into a rotating schedule

At a client's location

Pest control

______ is the idea that the market's demand for a product or service is sensitive to changes in its price.

Price elasticity

______ refers to sales run on a schedule that is unpredictable to the customer.

Random discounting

At a mutually accessible location

Restaurants

______ is contact via telephone for the purpose of selling a product or service.

Telemarketing

freight forwarders

They are specialists in export-related activities. Many of these companies are small businesses and have faced many of the same problems. Their services include tariff schedules, shipping, insurance, transportation arrangements, and custom clearing.

At a mutually accessible location

Specialized equipment that cannot be readily transported

mail order

These are sales made from ads in newspapers or magazines. Customers can read the advertisements at their leisure and have time to decide whether to make a purchase. A company has customer service people to process phone, mail, and online purchases.

Maximizing profits

The price of a firm's product or service should be above the average price as this adds to financial gains.

layout formats are used for manufacturing operations

The production line layout The process layout

price skimming

This strategy is used to recoup R&D and other costs. It is usually possible to do this only if the business is the only one to produce the product or service. It is usually a brand new product, for example when 4K televisions first were introduced.

______ are other businesses that bring customers to a shopping area.

Traffic generators

examples of price elastic goods and services

Travel Tickets to movies Eating out

An internal reference price is founded on a consumer's expectation of what the price should be based on their own knowledge.

True

Premium pricing is

a strategy where the price is set above the competitors' price to indicate that the firm's product is of higher quality.

Selling goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results, is

direct marketing

Direct exporting is

exporting without using intermediaries.

An estimation of what a price should be based on information external to a consumer is called an ______ reference price.

external

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

margin

The ______ is the highest price that will produce a desired level of sales in an intended market.

optimum price

A(n) ______ is a nonprofit organization or institution that provides business services by using workers who have disabilities or who are rehabilitated.

sheltered workshop

Prestige pricing is a strategy

where the price is set above the competitors' price to indicate that the firm's product is a status symbol.

A ______ is the amount that an entrepreneur adds to costs to provide a profit.

markup

Traffic generators are

other businesses that bring customers to the area.

agents

They represent manufacturers and sell to businesses. They are paid a commission for their services. They are referred to as an intermediary.

A(n) ______ is an intermediary business that represents a manufacturer's product or service to other business-to-business intermediary firms.

agent

Markup pricing is a price-setting method where

an amount is added to the cost of a product to set the retail price and provide a profit.

Selling goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results, is called

direct marketing

A(n) ______ is an intermediary business that buys and sells to businesses rather than consumers.

wholesaler

______ is the practice of setting price points: good, better, and best.

Price lining

______ is setting a price at the highest level the market will bear.

Price skimming

______ is a method of selling in which catalogs, brochures, and other pieces of marketing materials are mailed directly to customers.

Direct mail