Chapter 10 Product, Price, and Place Copyright Goodheart-Willcox Co., Inc. 283 Chapter Summary Section 10.1 Product • Product, together with place, price, and promotion, make up the four Ps of marketing. A product can be a good, service, or idea. • All products have certain elements that may be changed to meet customer needs. These include product features, extended product features, usage, and protection. Effectively using product elements can help a business achieve greater customer satisfaction. • Using the appropriate product strategy will help the business out-sell the competition and meet a consumer need. Product strategies include branding, packaging and labeling, and developing new products. Section 10.2 Price • Price is one of the four Ps of marketing. A product’s price will have a significant effect on whether or when a company will make a profit. • Pricing decisions are determined by a number of factors. Included among these are expenses, competition, laws and regulations, product life cycle, as well as supply and demand. • Price objectives are driven by the short- and long-term goals of the company. Finding the right price requires finding the right balance between an amount at which customers will buy and one that generates enough profit for the business. • Pricing strategy is based on a company’s pricing objectives. Pricing can be cost-based, demand-based, or competition-based. • Pricing techniques include psychology pricing and discount pricing. Psychology pricing is most often applied to retail prices, the price at which something is sold to a consumer. Discount pricing is used in both B2B transactions as well as B2C transactions. • Many businesses use web-based pricing software or other pricing technology when determining prices. Using technology makes the process more efficient. Section 10.3 Place • Place is one of the four Ps of marketing. Place is the means by which customers will receive the products. • Efficient management of a supply chain is important to a business’ success. Effective supply chain management streamlines inventories, lowers operating costs, ensures timely product availability, and increases customer satisfaction. • The paths that goods take through the supply chain are channels of distribution. There are both direct and indirect channels of distribution. Choosing which channel to use is first based on the type of good being sold.