Business and Commerce Concepts

Pricing Strategies

• Optional Product Pricing: allows customers to pay a higher price for a product with additional features or a lower price for a basic version.
• Bundle Pricing Strategy: offers two or more complementary products or services together for a single price.
• Psychological Pricing Strategy: takes advantage of human psychology to boost sales, e.g., pricing at $99.99 instead of $100.
• Geographic Pricing Strategy: prices products or services differently based on geographical location or market.
• Cost-Plus Pricing Strategy: focuses on the cost of producing a product or service and adds a markup for profit.
• Value-Based Pricing Strategy: prices products or services based on what the customer is willing to pay.

Costs

• Direct Costs: can be easily traced to a product, department, or project, e.g., raw materials, labor, and distribution costs.
• Indirect Costs: cannot be easily traced to a product, department, or project, e.g., overhead expenses, rent, and marketing expenses.
• Manufacturing Costs: include direct material, direct labor, and manufacturing overhead costs.

Pricing Strategy Types

• Skimming Pricing Strategy: charges the highest possible price for a new product and lowers it over time.
• Competition-Based Pricing Strategy: focuses on the existing market rate for a product or service.
• Premium Pricing Strategy: prices products high to present a high-value, luxury, or premium image.
• Freemium Pricing Strategy: offers a basic version of a product for free, hoping users will upgrade to a paid version.
• Product Line Pricing: separates goods and services into cost categories to create perceived quality levels.

Behavioral Targeting

• allows marketers to target prospects who have demonstrated interest in a product or service.
• helps convert leads into customers with personalized messaging.
• creates a more engaging experience for visitors, increasing customer loyalty.
• enables marketers to make better resource allocation decisions.

Business Concepts

• Trading: the buying and selling of financial assets in markets to make a profit.
• Buying and Selling: purchasing products at wholesale and selling them at a higher price.
• Marketing: providing information about a product and company.
• Service Business: provides an intangible valuable offering to customers, often handled by an individual or group of people.

Types of Service Businesses

• Personal: one-on-one interaction between seller and buyer, e.g., hair salon.
• Finance: provides services concerning financing needs, e.g., banking, insurance.
• Recreational: provides service facilities for sports, entertainment, amusement parks, etc.

Types of Business Organizations

• Profit Organizations: exist to make a profit.
• Non-Profit Organizations: do not distribute profits to owners or shareholders.

Test your knowledge of fundamental business concepts, including trading, buying and selling, marketing, and aids to trade. Learn about different business models and strategies. Identify the key components of a successful business.