Five Product Levels

What is Product ?

The term “product” refers to any tangible or intangible item or service that is created, developed, and made available for sale or consumption in the market. It encompasses a wide range of offerings, including physical objects like electronics, clothing, and furniture, as well as digital goods like software, e-books, and online services. Products can be designed to meet the needs and wants of individual consumers or businesses, and they come in various forms, catering to diverse preferences and requirements. Ultimately, products play a crucial role in commerce and are essential components of the economic system by providing value and satisfaction to those who use or purchase them.

Definition of Product

A product is a versatile term encompassing tangible objects, intangible services, or even innovative ideas that are created, developed, and offered for sale, use, or consumption in the market. It encompasses a wide range of items, from physical consumer goods to intangible digital content like software and music. The essence of products lies in meeting the needs, wants, and aspirations of individuals and businesses, contributing significantly to commerce and the economy by generating revenue and creating value for both producers and consumers.

Five Product Levels

Product levels, also known as the product hierarchy, offer a comprehensive perspective on the various aspects of a product that customers interact with. These levels were originally introduced by marketing expert Philip Kotler and include five essential components:

1. Core Benefit: 

At the core benefit level, a business finds the fundamental value or primary purpose that a customer seeks while purchasing a product. This aspect addresses the underlying need or problem the product is designed to fulfil. 

For example, when someone buys a smartphone, they are seeking the core benefit of communication and access to information.

2. Generic Product: 

Moving on to the generic product level includes the basic version of the product that fulfils the core benefit. This level includes all the essential features and attributes necessary for the product to function as intended. Essentially, it is a bundle of tangible and intangible attributes that make up the product. 

For example, in the case of smartphones, these would encompass components like display, processor, battery, and basic communication capabilities.

3. Expected Product: 

The expected product level represents the set of attributes and features that customers anticipate to have in a product of a specific category. These are the minimum requirements that customers expect when making a purchase. Failing to meet these expected features may lead to customer dissatisfaction. 

For example, in the case of smartphones, customers would expect features like a good-quality camera, app compatibility, and internet connectivity.

4. Augmented Product: 

As we ascend to the augmented product level, we encounter additional features and benefits that surpass customers’ expectations and distinguish the product from its competitors. These extras add value and elevate the overall customer experience. Augmented product offerings may include warranties, customer support, packaging, after-sales services, or loyalty programs. 

For example, In the case of smartphones, augmented features could be extended warranty, fast charging technology, or exclusive access to certain apps.

5. Potential Product: 

Lastly, the potential product level entails envisioning future possibilities and innovations that could be incorporated into the product. These are ideas and improvements that may not be currently available but hold the potential to be introduced in the future. Anticipating and adapting to changing customer needs and technological advancements are crucial aspects of the potential product level.

For example, for smartphones, the potential product could be a gaming kit on one occasion and earbuds on some other occasion. Through potential products, a business can surprise its customers.