entrepreneurship.

• Product


  Tangible items that a company offers to consumers
• Service


  Intangible items that a company might offer to consumers, often experiences that benefit the customer through the output labor of at least one other individual
• Pricing for services


  Varies drastically, depending on the type of service, the skill level of the person or people offering it and the demand for the service
• New product strategy


  The management provide guidelines about which product or market the company is interested in serving
• Idea generation


  Companies use brainstorming to stimulate creation of ideas and financial incentives to persuade people to put forward ideas they have
• Idea screening


  Screening of ideas is done to evaluate their commercial worth, ascertaining whether the new products being developed fit in with the company's strategy and resource availability
• Concept testing


  Each concept is then tested with a small sample of customers from the target market to know their degree of acceptance
• Business analysis


  Estimates of sales, cost and profits are made. The company identifies the target market, its size and projected product acceptance over a number of years. The company considers various prices and their implications on sales revenues. Costs and break even points are estimated
• Product development


  The product concept that has found the best acceptance is then developed into a physical product
• Market testing


  The company seeks to have a limited launch for the product in the marketplace so that it can gauge the initial customer response in true test conditions. The feedback obtained from this launch guides the company's decision to continue with the large-scale commercialization of the project, or to abandon it
• Commercialization and diffusion of innovation


  The spread of an innovation is called diffusion, and when an individual customer unit buys the new product, it is called adoption. Thus, when many customers adopt the new product quickly, the diffusion is fast and the diffusion rate is high. The new product is successful. And when either the number of customers who adopt the new product is low, or the process of adoption is slow, the diffusion rate is low
• Price


  The amount of money customers have to pay to obtain the product
• Pricing strategy


  A model or method used to establish the best price for a product or service. It helps you choose prices to maximize profits and shareholder value while considering consumer and market demand
• Cost


  The fees you incur from manufacturing, sourcing, or creating the product you sell. That includes the materials themselves, the cost of labor, the fees paid to suppliers, and even the losses
• Margin


  (in this case, gross margin) The amount your business earns after you subtract manufacturing costs
• Markup


  The additional amount you charge for your product over the production and manufacturing fees
• Competition-Based Pricing Strategy


  Also known as competitive pricing or competitor-based pricing. This pricing strategy focuses on the existing market rate (or going rate) for a company's product or service; it doesn't take into account the cost of their product or consumer demand
• Cost-Plus Pricing Strategy


  A pricing strategy that focuses solely on the cost of producing your product or service, or your COGS. It's also known as markup pricing since businesses who use this strategy "markup" their products based on how much they'd like to profit
• Dynamic Pricing Strategy


  Also known as surge pricing, demand pricing, or time-based pricing. It's a flexible pricing strategy where prices fluctuate based on market and customer demand. Hotels, airlines, event venues, and utility companies use dynamic pricing
• High-Low Pricing Strategy


  When a company initially sells a product at a high price but lowers that price when the product drops in novelty or relevance. Discounts, clearance sections, and year-end sales are examples of high-low pricing in action — hence the reason why this strategy may also be called a discount pricing strategy
• Penetration Pricing Strategy


  Contrasted with skimming pricing, a penetration pricing strategy is when companies enter the market with an extremely low price, effectively drawing attention (and revenue) away from higher-priced competitors. Penetration pricing isn't sustainable in the long run, however, and is typically applied for a short time
• Skimming Pricing Strategy


  When companies charge the highest possible price for a new product and then lower the price over time as the product becomes less and less popular. Technology products, such as DVD players, video game consoles, and smartphones, are typically priced using this strategy as they become less relevant over time
• Value-Based Pricing Strategy


  When companies price their products or services based on what the customer is willing to pay. Even if it can charge more for a product, the company decides to set its prices based on customer interest and data
• Psychological Pricing Strategy


  Targets human psychology to boost your sales. For example, according to the "9-digit effect", even though a product that costs $99.99 is essentially $100, customers may see this as a good deal simply because of the "9" in the price
• Geographic Pricing Strategy


  When products or services are priced differently depending on geographical location or market
• Freemium


  A combination of the words "free" and "premium", where companies offer a basic version of their product hoping that users will eventually pay to upgrade or access more features
• Premium Pricing


  Also known as prestige pricing and luxury pricing, when companies price their products high to present the image that their products are high-value, luxury, or premium. Prestige pricing focuses on the perceived value of a product rather than the actual value or production cost
• Hourly Pricing


  Also known as rate-based pricing, commonly used by consultants, freelancers, contractors, and other individuals or laborers who provide business services. Hourly pricing is essentially trading time for money
• Bundle Pricing


  When you offer (or "bundle") two or more complementary products or services together and sell them for a single price
• Project-Based Pricing


  The opposite of hourly pricing — this approach charges a flat fee per project instead of a direct exchange of money for time. It is also used by consultants, freelancers, contractors, and other individuals or laborers who provide business services
• Subscription Pricing


  A common pricing model at SaaS companies, online retailers, and even agencies who offer subscription packages for their services