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A product is anything that can be offered to a market to satisfy a need or want.

Or
A product is anything which has the capability to satisfy the needs and wants of the customers or end users.

Customer Value Hierarchy

Product Levels

Level I: Core benefit


Fundamental level, Little or no competition, The benefit that customer is really buying.

Level II: Basic Product


Includes basic necessities, emergence of differentials and low level of competition.

Level III: Expected Product


Includes a set of attributes that marketers normally expect, high competitive differentials.

Level IV: Augmented Product


Delivering more than what customer expects, very high level of competition, possessing a edge in the market

Level V: Potential Product


Ascertaining future needs and including all possible augmentations for satisfying and retaining customers.

Product Classifications

Durability and Tangibility


Non-durable goods: Tangible, bought frequently, shorter shelf life. Availability, low margins, heavy advertisement, induce trial. Durable Goods: Tangible, bought occasionally, longer shelf life. Personal selling, service, higher margin, guarantees. Services: Intangible, Inseparable, variable, perishable. Quality control, supplier credibility.

Product Classifications

Consumer Goods
Convenience Goods (frequently, immediately, minimum effort): Staples, Impulse, Emergency goods Shopping Goods (Effects comparison, lengthy decision making process): Homogeneous, Heterogeneous Specialty Goods: Brand identities, usually high-priced / need-based goods. Unsought Goods (no awareness): Need advertising to spread awareness.

Product Classifications

Industrial Goods
Materials and Parts
Raw

Material Farm products, Natural Products Manufactured Material: Component materials, Component parts.

Capital Items
Installation

Buildings, Heavy equipment Equipment Factory Equipment, Office Equipment

Supplies and Business Services


Maintenance

and Repair Operating Supplies Intelligence and Consulting Services

Product Differentiation

Form: Size, shape or physical structure Features: Supplementing the basic function. Considering the value propositions Performance Quality: Level at which the products primary characteristics operate. Conformance Quality: In order to conform with the Standard specifications Durability: Expected operating life / shelf life Reliability: Non-probability of functional risks Repairability: Re-Fixability during malfunction Style: Look N Feel of the product.

Product Mix / Assortment


Product Width: The many different product lines the company carries, or the total number of lines Product mixes) Product Length: Total number of items in the mix (The sum of lengths of all lines). Product Depth: The many variants offered in each product line. Product Consistency: The relationship between the products in terms of production and channel lines and end users.

Line-Length Strategies
Line

Stretching

Down-market Stretching Up-Market Stretching Two-way Stretching


Line

Filling: New segment, new product (just noticeable difference) Line Modernization, featuring and pruning