The product is the item or service that people buy to satisfy a want or need. In the case of chocolate-covered cornflakes, the product is the food itself. The company makes many decisions about the product, including what it should look, taste and feel like, and how much of it should be sold in a package.
Price is how much a customer pays for the product. The selected price, if too high--or even too low--will affect how well the product sells.
The word "place" refers to the location where a product can be purchased. It could mean a physical store on the street, or a virtual store on the Internet. Marketing managers have to decide which stores should carry the chocolate-covered cornflakes--supermarkets, convenience stores, online grocery stores, or directly through TV commercials and catalogs, for instance.
Promotion represents all of the ways a company communicates with a customer. Promotion has many elements, including advertising, public relations, publicity, merchandising, sales promotion, and direct mail. The chocolate-covered cornflakes company might put commercials on during certain television shows, design unique packaging and supermarket aisle displays, or mail coupons to potential buyers' homes.
Starbucks is another example. A generation ago, coffee was served mainly for breakfast, not as a snack, and that coffee was the regular "cuppa Joe”, not a latte. Then came Starbucks, which repositioned the entire category of "coffee" by turning it into an everyday treat. The company changed people's perceptions of coffee’s role in their lives.