In the workshop, the process of technology problem solving ends with the construction of the prototype. In real life, however, the product must then be promoted so that we can distribute it and ensure that it reaches the whole of society.
Price
Price is a crucial element in the sale of a product. It is related to production costs but it is also part of the business strategy of the company.
When we set a price, we consider the profit margin that we want to obtain over production costs, the prices of similar products offered by the competition and the sensitivity of the consumer to increases or decreases in product demand.
Sometimes, a low price can encourage consumers to buy a product; for example, when a mobile network operator introduces a new tariff its price will usually be very competitive. However, if the price is too low, we run the risk that potential customers could associate our product with poor quality; this happens when a new clothing brand is launched, for example.
Distribution
When a company distributes a product, it decides which channels it will use to reach the end user. The most common distribution channels are:
- Wholesale: the product is supplied to retailers and large consumers.
- Retail sale: the product is offered directly to the end user.
- Online sale: the product is distributed through websites.
Promotion
The most common types of promotion are advertising campaigns on television, in the newspapers and on digital media. These campaigns target potential consumers and show them the products in an attractive way so that they will want to buy them.
Sometimes, promotional activities can create a non-existent need in the end user, i.e. a need that did not exist before. This is the case with mobile phones, for example: in the early days, telephone companies used to give mobile telephones to users free of charge because there were not many users; nowadays, users have to purchase their telephones, often at very high prices.
By contrast, staple products (for example, bread and milk) do not need any promotion. Their users need them and will buy them regardless of any promotional activity. The price of these products is generally stable.