Chapter 10 Product, Price, and Place Copyright Goodheart-Willcox Co., Inc. 285 3. Create product mix strategies that include extended product features for your good or service. Describe how you will address features, usage, and protection for your product. 4. Explain the nature of product planning for a new business. Part of product planning is to set the scope of what is to be accomplished in order to keep focus on the important elements of a project. Explain the scope of product planning and its importance. 5. Identify and analyze each of the six pricing objectives discussed in this chapter. Explain how these will apply to your business. Which do you think will work better for your business? 6. Research cost-based pricing, demand-based pricing, and competition- based pricing for the industry that you have selected. Which method do you think would work better for your product based on what you have learned that others in your industry have used? 7. Determine the break-even point of a product where 200 units are produced for a cost of $500 each and a selling price of $1,000. What pricing strategy is being used? 8. Describe the supply chain that will apply to your business. How many intermediaries do you think you will require? 9. Based on what you have learned in this chapter and research on your industry, what do you think is a reasonable price for your product? 10. The formula for calculating markup is cost + markup = selling price. If the cost of your product is $120 and you want to make 10 percent profit, what is the markup? What is the selling price? You have a good customer that wants a cash discount on your selling price because he buys in large quantities. He wants to buy 100 items with a 2 percent discount off your selling price. What would his total discount be? Teamwork Working with your team, select a product with which you are familiar that has gone through its life cycle and is no longer in the marketplace. Create a flow chart that illustrates the life cycle of the product. For each stage, explain what the producer experienced. What did you learn from this activity? Internet Research Pricing Structures. Conduct an Internet search for business pricing structures and guides that apply to goods, services, and ideas. Create a chart with three columns: Goods, Services, and Ideas. List the considerations for developing a pricing structure that apply to each category. Highlight the considerations that are unique to each category to communicate the differences among the pricing structures.