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5 Levels of Product (The Customer-Value Hierarchy) – Want to Learn with Examples?

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  • Post category:Marketing
  • Post last modified:October 9, 2020
  • Reading time:4 mins read

I guess you all remember the scene of the movie – 3 Idiots.
Rancho tried to teach “How to Teach” in a new dimension in the classroom.
Unlike the mainstream classroom strategy, we are mostly taught just the definitions, leaving the true depth of a particular topic.

Let’s start a new era – LEARN WITH EXAMPLES.

Levels of Product or Service, also known as the Customer-Value Hierarchy which mean that with the increase of the level, the value increases related to the product of our interest. Philip Kotler proposed five product levels:

  1. Core Benefit, the very basics for which a product is purchased. It is the main functionality of a product without which the product has no value. For example, if it doesn’t show the time properly, the watch has no value. If we cannot call, the phone has no value. Without proper functioning of this level, anything you add beyond this level doesn’t give you any more value.
  2. Basic Product, the very first look of the product. It is mainly the physical appearance of the product. For example, a wristwatch has the dial and leather; the phone has the bar shape, folding shape, or slider shape body, etc.
  3. Expected Product, the very good features that are expected in a product. Adjectives modify the features of a Noun or Pronoun. Expected Product modifies the Basic Product. For example, the customer expects that the watch should show the right time and will last longer; the phone should work properly and has a good built-in quality. The greater a company meets the expected product level, the sustainable brand a company can create.
  4. Augmented Product, the very amazing features that exceed the customer expectation, totally. Only the leading brands in an industry can do this. For example, Apple or Samsung brings smartwatches or completely new features on the phone that any brand couldn’t bring earlier. These augmented products are Flagships most of the time. The company invests huge bucks in R&D for maintaining the augmented product level.
  5. Potential Product, the very futuristic concept of an existing product. We better don’t give any examples here. Examples might seem weird here but these features can come to reality someday.

Let’s re-shape the understanding of “Levels of Product” in a whole new level with 3 examples.

ONE. Carbonated Beverage Product Levels (Coca-Cola)
Typical Product Levels of Coca-Cola
  1. Core Benefit – quenching a thirst
  2. Basic Product – a burnt smelling, black, bubbly, and sweetened foamy drink
  3. Expected Product – cold cola from the refrigerator
  4. Augmented Product – diet coke that is free of calories
  5. Potential Product – running campaigns with different Bangla words of the usual practice – “Bangla Ekhon, Bangla Tokhon

TWO. Hotel Rooms Product Levels (Radisson Blu)
Typical Product Levels of Hotel Rooms
  1. Core Benefit – rest and sleep
  2. Basic Product – a bed, bathroom, towels, desk, dresser, and closet
  3. Expected Product – a clean bed, fresh towels, working lamps, and a relative degree of quiet
  4. Augmented Product – child’s playthings, small garden, bookshelf, etc. in the room
  5. Potential Product – mobile app lock-unlock, ordering, or room service system, etc.

THREE. Bluetooth Headset Product Levels (Redmi AirDots)
Typical Product Levels of Bluetooth Headset
  1. Core Benefit – the sound and music play
  2. Basic Product – the air dots, case, charger, spare parts
  3. Expected Product – good built-in quality, good sound, long battery life, beautiful case
  4. Augmented Product – control the air dots through hand gesture in the air
  5. Potential Product – comment us your futuristic concept on the Bluetooth headset

The Product Levels or Customer-Value Hierarchy are fixed to five levels but not limited any dimension it can explore. The product levels concept gives the marketer a food for thought in a great structured manner.
Also, see Marketing – A Definition of Adjustment

Sanjidul Anwar

A soul that wants to dedicate his LIFE to inspire other souls.

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