Page 89 - Marketing the Basics 2nd

5
product and pLaceMent
We now turn our attention to the various elements of the marketing mix better known as the five Ps (product, place, price, promotion, people). Over the next three chapters we investigate how decisions about the product itself, its placement or how it is distributed to customers, the price charged, types of promotion used and the people needed to support the product are all potential sources of competitive advantage.
PART A: PRODUCT
In marketing, a product is much more than just a physical object; it is a bundle of physical, psychological and experiential benefits that the customer receives that satisfies one or many wants or needs. Fully understanding the benefits a customer receives is no simple task. It requires insight on the logical and impulsive reasons why purchases are made.
CUSTOMER VALUE HIERARCHY THEORY
Researchers have debated at length the relationship between a product and customer value. One theory called the customer value hierarchy suggests representing the benefits a customer receives as a hierarchy of three levels (see Figure 5.1). The more