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

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

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

Capital Items

Buildings, Heavy equipment Equipment Factory Equipment, Office Equipment

Supplies and Business Services


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


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


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