Three Levels of a Product Explained
Introduction to the Three Levels of a Product
In this lesson, we will explore the three levels of a product according to Philip Kotler's model. These levels help us understand the different needs and values that customers attach to a product.
The Three Levels of a Product
- The three product levels model by Philip Kotler provides a way to understand the different levels of need that a customer has for a product.
- Customers have three ways of attaching value to a product: need, want, and demand.
- According to Kotler, the definition of a product goes beyond just the physical item or service itself.
- To better understand a product, we can examine it as three separate products known as the three product levels.
The Core Benefit
- The core benefit is the fundamental need that the customer satisfies when they buy the product.
- It is important to think from the customer's perspective and ask why they are buying the product.
- For example, the core benefit of a mobile phone is to provide a mechanism for making telephone calls while away from home or office.
The Actual Product
- The actual product consists of features and design.
- Products often have many features but few actual benefits for customers.
- For instance, the actual product of a mobile phone includes its dimensions, color, screen size, and Bluetooth compatibility.
The Augmented Product
- The augmented product includes non-physical parts such as warranties and customer service.
- It can be an important way to tailor the product to meet specific customer needs.
- For example, the augmented product for a cell phone could include a 12-month warranty for all customers and additional services for business customers.
Example: Selling a Television Set
- When selling a TV, the core product is the need to watch television programs.
- The actual product includes features like screen size, weight, pre-installed apps, and brand perception.
- The augmented product may include warranties tailored to different customer segments.
By understanding these three levels of a product, businesses can better meet customer needs and differentiate themselves in the marketplace.
The Three Product Levels New Section
This section discusses the concept of the three product levels and how marketers can use them to better understand and design products.
Understanding the Three Product Levels
- The company's reputation for post-sales support is an example of an augmented product, which goes beyond the core benefit and actual features.
- Companies can help offset their environmental impact by including initiatives like donating a percentage of revenue to plant trees.
- The three product levels are involved in every purchase: core product, actual product, and augmented product.
- A product is more than what can be seen and touched; it includes intangible aspects that fulfill customer needs.
- Marketers must identify the core benefit by understanding customer needs and problems that can be solved.
- Designing the features of the actual product is the next step after identifying the core benefit.
- Augmenting the product involves adding value to create customer satisfaction and success in the marketplace.
Using the Three Product Levels
- A template for implementing the three product levels is available for download (link provided below).
- The template helps businesses apply this framework to their own products or services.
Summary of Kotler's Concept
- Kotler suggests examining every product as if it were three separate products: core benefit, actual product, and augmented product.
- The core benefit fulfills basic customer needs, while the actual features represent tangible aspects. The augmented product adds intangible value through marketing efforts.
- Together, these three separate products form what is known as the three product levels.
The transcript is already in English, so no language adjustments are needed.