FIVE PRODUCT LEVELS MARKETING

FIVE PRODUCT LEVELS  

1. FIVE PRODUCT LEVELS  
2. CORE BENEFIT 
3. GENERIC PRODUCT 
4. EXPECTED PRODUCT 
5. AUGMENTED PRODUCT 
6. POTENTIAL PRODUCT 

The Five Product Levels model was developed by Philip Kotler in the 1960s.
 The renowned economist presented that a product can be more than just a tangible entity and can be identified in five levels. 

For Kotler, the definition of a product goes way beyond being a physical object or a service. 

He defines a product as anything that can meet a need or a want. 

This means that even a retail store or a customer service representative is considered a product.

The Five Product Levels model provides a way to show the different levels of need customers have for a product. 

These needs range from core needs to psychological needs.

At each product level, more customer value is added. 

Product Levels Considerations 

 The model considers that products are a means to an end to meet the various needs of customers. 

Customers will choose a product based on their perceived value of it (Actual value has to meet or exceed expectations). 


5. Product Levels Model Basis V A L U E 01 CUSTOMER NEED V A L U E 02 CUSTOMER WANT V A L U E 03 CUSTOMER DEMAND The Lack of a basic requirement 


The model is based on there being three ways in which customers attach value to a product: 

A set of wants plus the desire and ability to pay to have them satisfied 

A specific requirement for a product or service to meet a need I create demand for flavoured water I want clean, safe to drink water I need water to survive 


CORE BENEFIT 
The core benefit is the fundamental need or wants that the customer satisfies when they buy the product. 
For example, the core benefit of a bank account could be for saving purposes or loans to businesses or individuals. 
For example, the core benefit of a hotel is to provide somewhere to rest or sleep when away from home. The core benefit of Coca-Cola is to quench a thirst.
GENERIC PRODUCT
 The generic product is a basic version of the product made up of only those features necessary for it to function.
 In   bank example, this could be a Unique Account Number with a Check Book or an ATM. 
In   hotel example, this could mean a bed, towels, a bathroom, a mirror, and a wardrobe.

The generic product is a burnt vanilla smelling, black, carbonated, and sweetened fizzy drink.

EXPECTED PRODUCT 

The expected product is the set of features that the customers expect when they buy the product.
 In bank example, this could be access to a network of branches countrywide. 

In   hotel example, this would include clean sheets, some clean towels, Wi-fi, and a clean bathroom.
The expected product is that the customer’s Coca-Cola is cold.

 AUGMENTED PRODUCT 

The augmented product refers to any product variations, extra features, or services that help differentiate the product from its competitors.

 In  bank example this could be a versatile mobile banking application. 

In   hotel example, this could be the inclusion of a concierge service or a free map of the town in every room.

Coca-Cola’s augmented product is that it offers Diet-Coke. 
 Coca-Cola exceed customers expectations with this product
By offering all the great taste of Coca-Cola, but with zero calories.

 POTENTIAL PRODUCT 

The potential product includes all augmentations and transformations the product might undergo in the future. 

In simple language, this means that to continue to surprise and delight customers, the product must be augmented. 
In our hotel, this could mean a different gift placed in the room each time a customer stays. 
For example, it could be some chocolates on one occasion, and some luxury water on another. 
By continuing to augment its product in this way the hotel will continue to delight and surprise the customer.
One way in which Coca-Cola delights customers is by running competitions. 
The prizes in these competitions are often things that, “money can’t buy”, such as celebrity experiences. 
To continue to delight customers over time the competition prizes change frequently.

 Summary 

 The Five Product Levels model provides a way to show the different levels of need that customers have for a product.
 It can be useful in helping organizations understand their customers. 
From there, they can structure themselves to best serve those needs and wants. 
In this way, they can differentiate themselves from their competitors. 

Five Product Levels Advantages
The real advantage of the model is that it enables an organization to identify the needs and wants of customers. 
The organization can then:
match the features they create to what the customer wants.
match operational processes to what customers want. In our hotel example, 
this would mean strict processes around cleaning each room.
match marketing efforts to appeal to customers wants.

The model ultimately helps organizations differentiate themselves from their competitors in a way that aligns with the wants and needs of their customers.