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