Chapter 10-3 Price and Distribute Product Group 6 Section 3 Madison Luckenbaugh Tyler Colon Moe Khaiart Chapter 10-3 Price and Distribute Product

Overview Group 6 Section 3 will oversee; Value and Pricing, the influences that determine a products price, what important factors are determined after a product’s price is made. Channels of distribution, the types, the needs and problems of distribution, and the people behind distribution.

Value and Price There are many factors of the price made for products and/ or services. The factors make up the considerable price needed to be paid for the product at hand. Supply and demand, uniqueness, age, season, complexity, convince are all influence the price.

Value and Price Supply and Demand A product that has a steady supply of the product the price will be considerably low. If there is a low supply the price will be higher. Because there is more of a demand the price will be higher and if there is low demand the price is again considerably low Uniqueness A product will have few competitors because the product is unique. The price will be higher than other products that have high similarities between them. Age When a product is first distributed the price are quite high, as the product ages the price will decrease.

Value and Price Season Some products are more popular, or can only be sold during certain seasons, such as winter coats being sold during the winter rather than in the summer Complexity Products with higher complexity and more features will increase the price Convince If a product is easily available the prices increase

Value and Price When a product is priced, the money a customer pays for a product or service, the manufacturer follows the formula; the selling price, or the price paid by the customer equals (=) the product costs, or the costs to manufacture the product plus (+) operating expenses, all and any expenses of operating the business to make the product plus (+) profit, the money available to the business after all expenses are paid. An important factor in product pricing is the gross margin, the difference between the selling price and the product costs. This represents the amount of money on hand to pay for operating expenses and/ or profits.

Value and Price Markdown is a reduction from the original price the product was sold at. Now all the time companies can be consistent with the price Markup is a pricing concept related to the gross margin, it is the amount added to the cost of a product to set a selling price. It is expected to be equal to gross margin

Channels of Distribution Video of Channels of Distribution

Channels of Distribution Distribution involves on how the product is to be delivered in the most efficient way possible. Distribution is the locations and methods used to make a product or service available to the target market. The pathway of the products manufacturer to the market or consumer is the channel of distribution. There are several differences between consumers and producers that make it hard to exchange products at times, a problem may be differences in quantity, differences in assortment, differences in location, and differences in timing.

Channels of Distribution Differences in Quantity Most businesses produce and sell large amounts of their products although consumers may only need a little amount of the product at the time. Differences in Assortment Typically businesses specialize in producing a specific type of product although consumers want a variety Differences in Location Today’s global market economy puts producers and consumers often thousands of miles away

Channels of Distribution Differences in Timing Businesses gain efficiency by producing large amounts of products at one time, although consumers may only want the product at another time. These channels can be in either be direct channels of distribution, where the products move straight from the manufacture to the consumer, or indirect channel of distribution, where the product must go one or more business before reaching the consumer. Any business involved in distribution of products and marketing of one’s products is known as the channel members. Retailers are the final business distribution process for indirect distribution. They help sell the manufacture’s product to the consumer