Marketing : Three Levels of Product

Philip Kotler in Principles of Marketing devised a very interesting concept of benefit building with a product.

Kotler suggested that a product should be viewed in three levels.

Level 1: Core Product. What is the core benefit your product offers? Customers who purchase a camera are buying more than just a camera they are purchasing memories.

Level 2 Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors.

Level 3: Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on. John Lewis a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the additional benefit of ‘piece of mind’ over the five years should their purchase develop a fault.