Table of Contents
History of product levels
The Five Product Levels model was developed by Philip Kotler in the 1960s in one of his marketing books.
Kotler definies product beyond being a physical object or a service. Kotler defines a product as anything that can meet a need. This definition encompases so many things as a product.
3 different values
He also defines a model that clarifies that to meet the various needs of customers we need to provide different values using 3 ways:
- Customer Need
- Customer Want
- Customer Demand
At the first glimps it might be looking the same but here we have explained about each of them:
Costumer Want: This is the product value that helps customers meet a desire. for instance, a customer may want entertainment. theme park is a product which could fulfill the desire.
Customer Need: This is the product value which helps customers satisfy a requirement. For instance, a restaurant products can fill people’s need to eat food.
Customer Demand: a set of wants plus the desire and ability to pay to have them satisfied is called customer demand. in another word, this is the product value that our customers both want and can pursue. For instance, a customer has both the desire and fund to purchase a driller, the driller can fill that demand.
It is important to understand that customers will choose products based on their perceived value. The customer is satisfied by your products only if the product’s actual values meets or exceeds their expectations from it. On the other hand, if the product’s actual value be lower that their expectations, they won’t be satisfied.
The five product levels
Kotler categorize these values of products to 5 different levels. Each level in this model represents the different categories of products, how each fills different wants, needs and demands for each costumer:
- Core benefit
- Generic product
- Expected product
- Augmented product
- Potential product
Let’s have a short explanation for each of them:
1- Core benefits
The core benefits are the primary needs that customers can satisfy from purchasing a product. This is the level of a product, therefore we just satisfy the basic want or need of customers. For instance, a car’s core benefit is to take you from A to B.
2- Generic product
The second level is generic product. This is a version of product that provides only features that allow it to satisfy customer’s fundamental needs. This means the product functions are dependant on these fundamental benefits. For example, steering wheel could be a great example for cars.
3- Expected product
The third level is expected product benefits. This is the collection of traits that customers expect a product to have when they pay it. For example, in car we expect car having windshield cleaner.
4- Augmented product
The forth level is augmented product benefits. This refers to the benefits of product which are provided to add extra benefit from the basic functions or improved features that allow the product to exceed its basic functions. Companies may do this to make a product more competitive among similar products in the market. For example, a warming system for seats in car.
5- Potential product
The fifth layer is potential product benefit. This includes all the changes, improvements and extra benefits that a company might add to its product in the future. In this way they increase customer satisfaction and keep customers engaged by continuously improvements of the product which leads to customer loyalty. For example, the software updates for better car management.