The product must meet the needs of customers. This category also includes packaging, as well as services and guarantees, which could come with the purchase. The key area in this framework is to understand the distinctive characteristics of the product in comparison to the competitors' products (see benchmarking).
Generally 3 different approaches are used to set the price of a product:
The “right” price is the one, which maximizes the revenue. To sell the greatest amount at the best price possible, we need to know how people value the product; therefore a value-based pricing is usually recommended.
Place refers to the PLACEment of a product in the market rather than just the point of sale. This dimension includes the whole distribution system: transportation, storage, and choice of distribution channel to the point of sale among others. To choose the right place you need to focus on the customers’ needs, wants and behavior.
Promotion bundles all communication activities with the customers. Ideally, the information of a product is presented in such a manner that it raises awareness of the target group and convinces them to purchase the product. Promotional costs often represent a sizable proportion of the overall costs.