Levels of Products or Product Hierarchy
In planning market offering, the marketer needs to think through five levels of the
product, each level adds more customer value, and the five levels constitute a
customer value hierarchy. Each product is related to certain other products. The
product hierarchy stretches from basic needs to particular items that satisfy those
needs.
Product Hierarchy
1. Core Product – The most fundamental level is the core benefit .It is the
fundamental benefit or service the customer is really buying. Marketers see
themselves as benefit providers. E.g. A hotel guest is buying rest and sleep.
2. Generic/Basic Product – At the second level the, marketer has to turn the
core benefit into basic product. In this the hotel room includes a bed,
bathroom, towel desk, dresser and closet.
3. Expected Product – At the third level the marketer prepares an expected
product a set of attributes and conditions that buyers normally expect and
agree to when they purchase this product. Now the hotel guests will expect a
clean bed, fresh towel, relative quietness.
4. Augmented Product - At this level the marketer prepares an augmented
product that meets the customer’s desires beyond their expectations. A hotel
can augment its product by providing a remote control television set, fresh
flowers, fine dining and room service. Product augmentation leads the
marketer to look at the buyers total consumption system: the way a purchaser
of a product performs the total task of whatever it is that he or she is trying to
accomplish when using the product, In this way the marketer will be able to
recognize many opportunities for augmenting its offer in a competitively
effective way
5. Potential Product – At the fifth level the potential product encompasses all
the augmentations and transformations that the product might ultimately
undergo in the future. Whereas augmented product describes what is included
in the product today the potential product points to its possible evolution. Here
companies search for aggressively new ways to satisfy surprise and delight the
customers. E.g. the hotel guest finds a candy on the pillow or a bowl of fruits
or a video recorder with optional tapes.
Credit: Marketing Management-MGU
MBA - Knowledge base