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

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.

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