Chapter 11 Entrepreneurship

What is the easiest marketing variable to change?

price

Optimum Price

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

What will price always be affected by?

supply and demand

Margin 

the amount of profit usually stated as a percentage 

Elasticity

the idea that a markets demand for a product or service sensitive to changes in the price

Inelastic product

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

Elastic Product

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

Law of Supply and Demand 

describes how the demand for products or services and the supply of them affect each other

Price Gouging

outrageously high price for something

Dropped prices are hard too…

raise

Customer psychology has an impact on…

pricing

Skimming

setting a price at the highest level that the market will hear, usually no competition

Prestige Pricing

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

Odd-Even Pricing

setting a price that ends in the number 5, 7, and 9

Partitioned Pricing

setting the price for a base item and then charge extra for additional components

Price Lining

the practice of setting 3 price points; good quality, better quality, best quality

Periodic Discounting

sales conducted at predictable intervals, such as before major holidays

Random Discounting

a sale run on an unpredictable schedule

Off-Peak Pricing

charging lower prices at certain times to encourage customers to come during slack periods

Bundling 

combining 2 or more products in one unit and pricing it less than if units here sold separately

Word of Mouth is…

not an easily controlled piece of marketing

Direct Mail

method of marketing directly to the consumer; catalog, brochures, letters, videos, and other things

Telemarketing

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

What are the 2 kinds of telemarketing?

inbound and outbound

Guerilla Marketing

using creative or inexpensive ways to reach your customer

Multichannel Marketing

the use of several different channels to reach your customer

Wholesaler

business that typically buys large quantities and sells to businesses not consumers

Retailer

an intermediately business that sells to customers or and-user of a product 

E-tailer

store that only exists on the internet; low overhead cost

What percent of exporters are small businesses in the United States?

98%

The first choice and often only choice for entrepreneurs is in their…

hometown

Why do entrepreneurs often choose their hometown?

convenience and a familiar setting 

Where is most manufacturing located?

away from your home

What are the 3 choices available when starting your own business?

build, buy, or lease

What has the most upfront cost?

building

What are the 2 traditional layouts for a retail operation?

grid layout and free form layout

Grid Layout

aisles running from the front to back of the store

Freeform Layout

aisles angle and meander throughout store

Atmospherics

all the ambiance items that might be considered in your business which make atmosphere appealing