それ

それ is a demonstrative pronoun that refers to something near the listener (in physical space) or to information just mentioned in conversation.

KO-SO-A-DO SYSTEM:

• これ: this (near speaker)
• それ: that (near listener, or just mentioned)
• あれ: that over there (far from both)
• どれ: which one?

GRAMMAR:
それ stands alone as a pronoun. To modify a noun, use その instead (その本(ほん) = that book).

CONVERSATIONAL USE:

Very common for responding to what someone just said:

• それはいいですね: That's good / That sounds nice
• それは大変(たいへん)ですね: That's tough / That sounds hard
• それはどういう意味(いみ)?: What does that mean?