Levels of Product
Levels of Product: A product, according to Philip Kotler, an economist and marketing genius, is more than a physical ‘thing.’ A product satisfies a consumer’s wants and, in addition to its real worth, has an abstract value. As a result, according to Philip Kotler, there are five product tiers that may be recognised and developed. Philip Kotler employs five product levels in which a product is positioned or observed from the consumer’s perspective to form its abstract value.
These five Product Levels represent the perceived value that customers place on a product. Only when the given value is equal to or greater than the anticipated value will the client be pleased.
- A essential need is missing.
- Want: A precise product demand to meet a need.
- Demand is defined as a collection of desires along with the desire and capacity to pay for the goods.
Customers will pick a product depending on how valuable they believe it is. The degree to which the actual usage of a product matches the perceived value at the time of purchase is known as satisfaction. Only if the real value equals or surpasses the perceived value can a consumer be pleased. Products have five stages, according to Kotler:
5 Levels of Product
- The Main Advantage
The underlying need or desire that the product or service satisfies for the customer. Consider the need to process digital photographs.
- Product that is generic or basic
A version of the product that only has the traits or characteristics that are strictly required for it to work. A basic, low-end personal computer with free image processing software, for example, or a processing laboratory might meet the demand to process digital photographs.
- Expected Output
When purchasing a product, customers often anticipate and agree to a set of traits or characteristics. The computer, for example, is designed to analyse images quickly and features a high-resolution, color-accurate display.
- Product Enhancement
Additional features, perks, qualities, or associated services are included to set the product apart from its rivals. For example, the PC comes pre-loaded with high-end image processing software at no additional expense or at a significant discount.
- Product Possibility
This encompasses all future enhancements and changes that a product could go through. To maintain client loyalty in the future, a company must strive to surprise and please consumers by adding new items. The user, for example, gets regular image processing software updates that include new and beneficial functionality.
The Five Levels of Product Added Value
Each of the five product tiers provides more value to the client. The more work production businesses put in at all levels, the better chance they have of standing apart. The rivalry is watched at the Augmented Product level in order to duplicate particular tactics, gimmicks, and the look of each other’s goods.
As a result, a consumer’s ability to identify a product’s individuality is becoming more challenging. To stand out from the crowd, manufacturers concentrate on characteristics that customers value more, such as extravagant packaging, startling marketing, customer-oriented service, and flexible payment arrangements. It’s not only about pleasing and surpassing consumers’ expectations; it’s also about surprise them.
What are the advantages of the model?
Kotler’s Five Product Level Model is a tried-and-true strategy for arranging a company’s product line to target different client categories. This allows them to conduct a methodical analysis of product and customer profitability (sales and expenses).
A business’ sales processes can be aligned to its customers’ needs by organising products according to this model, which can also help focus other operational processes around customers, such as design and engineering, procurement, production planning, costing and pricing, logistics, and sales and marketing. Modeling and planning sales, as well as manufacturing and new product planning, are all aided by grouping items into product families that correlate with client categories.