Chapter 11

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

Bundling

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

Outbound

company calls the customer

false

consumer psychology does not have an impact on pricing

Telemarketing

contact via telephone for the express purpose of selling a product or service

Inbound

customer calls the company

Margin

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

price

the easiest variable to change

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

Optimum Price

the highest price that will produce your desired level of sales in your intended market

Price lining

the practice of setting (usually) three price points: good quality, better quality, best quality

Guerrilla marketing

the use of creative and relatively inexpensive ways to reach your customer.

Multichannel marketing

the use of several different channels to reach your customers; for example, a website, direct mail, and traditional retailing

Etailer

an electronic retailer; a store that exists only on the internet

Wholesaler

an intermediary business that buys (typically in large quantities) and sells (typically in smaller quantities) to businesses rather than customers

Retailer

an intermediary business that sells to consumers or end users of a product (typically in single or small quantities)

True

Where you choose to put your business (location) is HUGE

Direct mail

a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are mailed directly to customers from which they can mail in, call in, or email an order.

Random discounting

a sale run on a schedule that is unpredictable to the customer

Partitioned pricing

setting the price for a base item and then charging extra for each additional component

2

The US Department of Commerce indicates that large companies account for only ____ percent of all exporters

hometown

The first choice and often the only choice for location is your

word of mouth

WOM

True

dropped prices are very hard to raise again

catalogs, brochures, letters, flyers

examples of direct mail

doorknob hangers, flyers under windshield wipers, t-shirts, balloons, and messages written on sidewalks

examples of guerrilla marketing

Elasticity

from economics, the idea that the markets demand for a product or service is sensitive to changes in its price

Atmospherics

include all the ambience items that might be considered in your business

Grid layout

isles running in the store from front to back

Elastic product

product for which there are any number substitutes and for which a change in price makes a difference in quantity purchased

Inelastic product

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

Periodic discounting

sales conducted at predictable intervals, such as before major holidays

Prestige pricing

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

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