ENTREP lesson 5

• Approaches to pricing

  1. Cost-based pricing - determining the cost of producing a product and then adding a mark up to it

  2. Value-based pricing - companies focus on the customer’s perception and willingness to pay before designing a product
• Types of Products

  1. Breakthrough Products - offer completely new performance benefits

  2. Differentiated product - try to claim a new space in the mind of the customer different from the spaces occupied by existing products

  3. Copycat product - will not make much impression on the customer’s mind

  4. Niche product - do not intend to compete directly with the giants
• Promotion is the communication strategy of the company to its customers and other stakeholders
• Price is the amount of money charged for a product/service
• Relevant Location Drivers

  • Physical proximity to target market
  • Customer traffic flow
  • Industry Clustering
  • Convergence of multiple industries
  • Population concentration
  • Image and location
  • Future area development
  • Fiscal and regulatory requirements
• People play a crucial role in the success of the enterprise
• Place refers to the locations where products are made available to customers
• Common pricing strategies

  • Captive-Product Pricing
  • Product-bundle packaging
  • Discount and allowance pricing
  • Promotional pricing
  • Special Event Pricing
• Latitude - layouts what is important to different customer segments
• Positioning is the way customers perceive the enterprise and its products and services in their minds
• Purpose of packaging

  • Brand Identification
  • Brand Differentiation
  • Product Safety
  • Value Proposition
• Longitude - product features and attributes of competitors in the marketplace
• Packaging is the science, art, and technology of enclosing or protecting products for distribution, storage, sale, and use