3/- PRODUCT DEVELOPMENT

Product development includes determining the various goods to be offered, as well as developing the products themselves. Manufacturers continually meet the demands of the public by adding new products, changing existing ones, and dropping others.

4/- DISTRIBUTION

Distribution is the movement of goods and services from producer to consumer. A manufacturer must establish a system that keeps products moving steadily from the factory to the customer. Such a system is called a marketing channel or a channel of distribution.

Many types of companies take part in distribution. They include wholesalers, who sell large quantities of goods to retailers. The retailers, in turn, sell small numbers of products to consumers. Independent dealers and agents buy goods from manufacturers in large quantities and sell them to retail dealers in small quantities. Other firms provide such services as financing, transportation, and storage.

5/- PRICING

Pricing. When setting the price of a product, most manufacturers start with their unit production cost, the expense of making one unit of the item. They add a percentage of this cost to provide a profit for themselves. Each firm adds an amount that covers its expenses and enables it to make a profit. The amount added at each stage is called