Five product levels in Marketing

In one of the previous articles, we discussed different types of products and broke the products in 3 parts. However, many experienced marketers define the product as having 5 product levels and not 3 product levels.

One of the reasons that you need to determine the types of product is to analyse where your product is weaker, or where it has more potential. A maruti car which does not provide service, has a problem not only in its expected product, but its augmented product as well. A car manufacturer who does not give service, is not only missing the basic expectations of their customer, but also missing a lot of revenue that can be generated through the sale of service and spare parts.

What are the five product levels?

1) Core product or core benefit

At the base level the utility that you are providing with the product, forms the core product or the core service. The core product of a book is information. It is not the book itself. The book is selling the information in it. The core product of a restaurant is offering food. It is not the building of the restaurant or the service in itself. The core product is the food.

The more important the utility or the benefit you provide, the more likelihood that the customer needs your product. Unfortunately, it is also likely that your sector will have a lot of competition when the core product is a common product. The more unique the core product (engineering), the lesser the players in the market and lesser the competition. This is where, understanding the other five product types can help you as a marketer, as the other product levels can help you differentiate your product.

2) Basic product

If we talk about restaurants, there are various types of restaurants. Some are 3 star, some 4 star, some 5 star and even 7 stars are found in this world. However, the basic level of a restaurant is the one found in your locality, offering basic food.

If a hotel, wanted to turn its core product (rest and food) into a basic product, then the building of the hotel, the type of bed, the type of food, all together form the basic product.

3) Expected product

Continuing the above example, if i were to say that you are going to a 5 star hotel, will you only expect a bed, and normal food? No. You will expect a lot more. Your expectation is built on the fact that the hotel is a 5 star hotel.

As the brand grows in reputation, you have to take care of the expectations of the consumer. Daikin, which is a world renowned air conditioning brand, is expected to have world class service for its air conditioners. If it does not deliver on this expected product, then it will affect the basic product (air conditioner) as well.

4) Augmented product

A BMW or a Mercedes is an augmented product. When people were bored of normal cars and passenger cars offered by the likes of Volkswagen, General electric or others, there entered a new range of premium sports and luxury cars like the BMW, the Mercedes or Audi.

These products saw beyond the expectations of the customers and went on to provide “Exceeds customer satisfaction”. This basically means that where you expected normal seats, these seats had warmers installed. The interiors were fantastic and were designed by high end fashion designers. The pick up and handling were excellent.

Although the price was more, the product designers of BMW, Audi or Mercedes gave the consumers what they wished for. They gave them something which was far beyond an expected product. They gave them luxury on four wheels. The augmented product is the desire of the customer, which you convert to reality. A 5 star restaurant, giving a fantastic four course meal, with the relaxation and the ambiance of your life, is serving as an augmented product.

5) Potential product

Each and every company explores the potential of the products they already have in the market. A best example of Potential product is the rivalry between Facebook and Google for virtual reality. Where Facebook has Occulus rift for gaming, Google has google glass for day to day usage. Each of them is progressing forward to dominate in the potential product – Virtual reality.

Mark Zuckerberg strongly believes that there will come a time when we won’t need to buy a television. We will buy a virtual reality glasses, and we can watch all the channels for a month for some determined costs. We wont need the television to deliver the movies or the programs to us. Many such products have become obsolete because of potential products which were the future.

Each product in the market has a future. The telephone which was launched, was defeated by the pager and then mobiles and finally smartphones. The polaroid and film using cameras lost their market to digital cameras, who are in turn losing their markets to smartphones again. Laptops have beaten desktop computers. Amongst the five product levels, it is the potential product you have to keep an eye out for. It can bring you down to the street, or it can make you a millionaire.

Here is a video by Marketing91 on Product Levels.

Above were the five product levels. Besides understanding the product levels, it is important to ask yourself, what are the different levels of products you have in your organization, and which product level are you weak on?

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